What preconditions must be met for short-time work (Kurzarbeit)?

The German government has considerably lowered the requirements for the introduction of short-time work due to the consequences of the coronavirus. We have compiled a list of requirements companies must meet to apply for short-time work and how to apply for it.

• Significant work loss with loss of earnings
  • based on economic reasons, temporary and inevitable   
• 1/3 of the employees have to be affected by work reduction  
  • as of 03/2020: 10 % of the employees
• In companies with agreements for time fluctuations these have to be realized first in order to avoid short-time working.  
  • as of 03/2020: obligation for a negative work time account shall be partially / fully waived  
• Up to now, there is no entitlement for short-time allowance for temporary workers  
  • as of 03/2020: receipt of short-time allowance also for temporary workers 
• Entitled persons:  employees subject to mandatory social insurance
  • Marginally employed persons are not entitled to receive short-time allowances 
• Reduction of work-time does not have to be equal for all employees  
• The reduction can be limited to certain divisions / plant sections of the company  
• Working overtime is not allowed during short-time working  
• Precondition for the implementation of short-time working  
  • With works council: agreement resp. a regulation in accordance with the collective agreement  
  • Without works council and without regulation according to collective agreement: individual agreements resp. consent of employees required (agreements / consents have to be attached to the application to the employment agency!) 

Application for short-time allowance

• Application has to be sent to the local employment agency (Agentur für Arbeit)
  • The employment agency (Agentur für Arbeit) where the district for payroll office responsible for the employer is located  
• Notification of work loss (first stage)
  • Short-time allowance will be paid at the earliest from that calendar month in which the notification reached the employment agency pursuant to Sec. 99 para. 2 German Social Security Statute Book III (Sozialgesetzbuch/SGB III). I.e. the notification has to  be made at the latest by the end of the calendar month for which benefits shall be reimbursed for the first time 
• Early coordination with the Federal Employment Agency and indication of short-time working at the employment agency (Agentur für Arbeit)  
• Individual assessment by the employment agency  
• Information material and application forms can be found in the internet presence of the Federal Employment Agency (Bundesagentur für Arbeit) 
• Application also “online“ possible

Payments for short-time working allowance

• Amount short-time allowance: like unemployment benefits (67 % of net remuneration difference for employees with at least one child, resp. 60 % for employees without children)
• Payment to employer for transfer to employee through payroll
• Compensation claims pursuant to Sec. 56 German infection protection law (Infektionsschutzgesetz / IfSG) have priority over short-work allowances   
• Social security contributions have to be borne further by the employer  
  • as of 03/2020: reimbursement by Federal Employment Agency  
• Subscription period: twelve months at the highest  
  • prolongation up to 24 months possible by statutory order of the Federal Ministry of Labour and Social Affairs (Bundesministerium für Arbeit und Soziales)