Study: Few companies cut vacation because of short-time work

According to a study, the majority of companies in Germany have refrained from reducing the annual leave of employees on short-time work.

The Institute for Employment Research (IAB) in Nuremberg found in its study that only every ninth company cut vacation days for its short-time employees – especially companies with a high workload.

At the moment it has not yet been conclusively clarified whether short-time work can lead to lower vacation entitlements if work is done on fewer days or if no work is done at all. The European Court of Justice declared this point of view compatible with European law. According to German law, there have recently been different judgments. The Federal Labor Court has to decide in November.

In an IAB survey, which was evaluated for the study, among other things, 34 percent of German companies stated that they had at least temporarily registered short-time work in the past year. In March 2021 it was still around 22 percent. Most of them stated that they worked fewer days or no days at all. In every sixth company the employees did not work at all. Still, only 11 percent of companies cut vacation time. The research institute of the Federal Employment Agency has been surveying 1,500 to 2,000 private-sector companies on the consequences of the corona pandemic since August 2020.

The institute also found that larger industrial companies were more likely to reduce the vacation days for short-time work. “These are the companies that have the most routine with short-time work,” explained study author Enzo Weber. Therefore, they would have more experience with it. Companies that use short-time work for the first time, on the other hand, may not even know that they can cut their vacation time.

Even if the Federal Labor Court should confirm this practice in November, Weber does not expect a wave of vacation cuts. At the moment, many industries are desperately looking for workers, emphasized the economic researcher.