Short-time working arrangements during the Corona crisis

Short-time working arrangements

  • What does the flexibilisation of the short-time working allowance look like?
  • How can short-time work be ordered?

What is short-time work compensation?

Short-time work compensation (Kug) is a benefit from unemployment insurance.

It is granted under certain conditions if the regular weekly working hours in companies or departments are temporarily reduced for economic reasons. This also applies to the current exceptional situation of the Corona crisis.

The short-time working allowance is intended to ensure that the companies retain the employees they have trained, or that the employees retain their jobs, as well as to compensate for part of the loss of wages caused by short-time working. You can find further information on the Kug at the employment agency

When can short-time work be applied for?

Since March 16, 2020, the German government has introduced elementary facilitations for short-time work. These take effect retroactively as of 1 March 2020 and are also paid out retroactively.

Companies can thus apply for the improved short-time working – earlier applications are automatically adjusted accordingly.
This means that only 10 percent of the employees in the company need to be affected by the loss of working hours (instead of 1/3 as before) and employers will be reimbursed in full for the social security contributions they have to pay in the event of short-time working.

Temporary employment agencies can already report a loss of working hours to the Federal Employment Agency.

How do I apply for short-time work?

Form “Notification of short-time work”

Recommendation
When filling out the “Notification of loss of working hours”, you should apply for short-time allowance as a precautionary measure for all employees and the maximum period. In any case, only that which you subsequently state as short-time working times in the “application for benefits” with your tax advisor will be reimbursed.

Video with explanation of the application for short-time work

What deadlines have to be observed when applying for short-time work compensation?

The employer must submit the application for short-time work compensation (benefit application) within a preclusive period of 3 months.

The period begins at the end of the calendar month for which the short-time work allowance is applied for. Only that which you subsequently state as short-time working times in the “benefit application” with your tax advisor will be reimbursed.

What must be taken into account when recording employees’ working hours?

The exact working hours that are actually still being worked must be recorded. If necessary, have your employees sign these.

How does the payment of remuneration or short-time work compensation work?

Transfer the remuneration for work performed and the short-time allowance calculated by you to your employees. This amount will be calculated at your expense by your tax consultant or your income tax department.

Only afterwards can you apply for short-time working allowance in the so-called benefit application at the employment agency.

What applies to mini-jobbers, short-term employees, trainees, working students?

Mini-jobbers, short-term employees (70-day rule), trainees, working students (depends on the type of employment contract) and employees who have been given notice or who have given notice themselves are generally not covered by short-time working.

In contrast, “low-income earners subject to social security contributions” are entitled to short-time work. The short-time working allowance is calculated in the same way as for other employees.

This income is not deducted from employees who already had a mini-job before short-time work. Employees who have a new mini-job from the period of short-time work onwards will have this income deducted from the short-time work.

Questions?

If you need support or have any other questions about these topics, please contact us. We are happy to assist you with advice.

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