Germany: New Short-time working allowance
The short-time working allowance can be paid on short notice. Applications can be submitted now. Key aspects:- The new rules for the short-time working allowance introduced to help with the corona crisis apply retroactively as of 1 March 2020
- Social insurance contributions that are due even when short-time work is in place will be refunded in full
- At least 10% of the company’s total working hours must be suspended
- Significant loss of work with loss of earnings 2. Operational requirements 3. Personal requirements 4. Notification to the Federal Employment Agency
- a) Economic reasons
- Loss of work due to lack of follow-up orders or postponement of the start of orders or lack of deliveries
- Assistance is not provided for things like planned reorganisation in production or loss of work that falls within the scope of customary operational risks.
- b) Unavoidable event
- Example: fire at plant
- Storm damage
- Measures ordered by the authorities
- Currently: consequences of coronavirus
- c) Unavoidable
- If the employer has taken every step that is reasonable in economic terms
- Employees cannot be given other duties within the business (cleaning up warehouses, etc.)
- d) Temporary
- It is foreseeable that a transition back to full work will be possible
- Support for permanent job cuts not possible
- e) Minimum requirements
- Based on the new rules, the economic situation must require that at least 10% of the company’s total working hours be suspended (previously 1/3 of working hours)
- The reductions may vary between departments and employees as long as they are in line with operational needs and work out to at least 10% of the company’s total working hours in all
- All businesses that have at least one employee who is subject to payment of social insurance contributions
- In certain cases, the short-time working allowance may be approved for only certain departments within a business, for example for production, while other departments continue to do business as usual
- The short-time working allowance is paid only if no notice of termination of the employee’s employment has been given and the employee’s employment has not been terminated by a termination agreement
- At the same time, employees must not be excluded from receiving the short-time working allowance due to factors such as illness
- Notify the Federal Employment Agency of the short-time work => short-time working allowance (KUG) business number assigned (download form KUG 101)
- Obtain agreement/consent from employees (download sample)
- Create/prepare the accounting list (target values) through payroll accounting at ADKL (download form KUG 108– annex to payment application) to show the loss of work
- Employer is responsible for processing and supplementing form KUG 108 with regard to the actual values for each employee
- Employer submits payment application (download form KUG 107)
- Fully completed notice of short-time working allowance (KUG)
- List of affected employees
- Statement of reasons for applying for KUG (more than simply stating “corona”)
- List of working hours accounts (any overtime accounts that may exist, are there credit balances, etc.); negative report required