Labor market: longer entitlement to more short-time work benefits – positive response

The extension of the higher short-time work allowance has met with a positive response from employers. Several business associations welcomed the corresponding change in the law on Friday, which the Bundestag had approved in the morning.

The President of the German Hotel and Restaurant Association (Dehoga) Guido Zöllick stated that the decision had prevented the “loss of tens of thousands of employees again”. “The continuation of the increased short-time work allowance is of central importance for our industry,” he said.

The regulation on the higher short-time work allowance, which no longer expires at the end of December as originally planned, provides that employees receive 70 percent of the net wage difference from the fourth month of reference – instead of 60 percent.

The net wage difference is the difference between the lower net wage during short-time work and the net wage that the employee would receive without short-time work.

Extension until March 31, 2022

If a child lives in the household, the rate should rise to 77 percent. From the seventh reference month, 80 percent is provided according to the increased rates, with a child 87 percent. All of this should apply to employees who were entitled to short-time allowance until March 31, 2021 during the pandemic. In addition, employees who have been on short-time work for the first time since April 2021 should be entitled to the higher benefit rates for the period from January to March 2022. It is still unclear which rules will apply after March 31 of next year.

The easier access to short-time working in the Corona crisis had already been extended by regulation. The maximum subscription period of 24 months has been extended for a further three months until March 31, 2022. The extension did not initially refer to the increased short-time work allowance. This has also been adjusted with the current regulation. The higher short-time work allowance rates were passed in May 2020.

Further demands on the Federal Agency

However, Dehoga and the Federal Association of Medium-Sized Enterprises (BVMW) warned that the Federal Employment Agency must continue to bear the social security contributions in full in order to relieve employers. The latest regulation on short-time work allowance stipulates that the previous full reimbursement of contributions should be reduced by half.

“There is still considerable room for improvement in the reimbursement of social security contributions. The current plan to reduce the full reimbursement by half is not financially viable for the industry, which has been plagued by the crisis for the second year in a row, ”said Daniela Gerdes, chairwoman of the tourism commission of the BVMW, on Friday. Dehoga boss Zöllick called for “full support and planning security” for the companies. The one hundred percent reimbursement of social security contributions should by no means expire by the end of the month, he said.

In response to a dpa request, the Federal Ministry of Labor only referred to the ordinance of November 24th. Among other things, it stipulates that employers continue to have the option of having their full social security contributions reimbursed if they enable their employees to undergo subsidized professional development.

The short-time work allowance that employers have to apply to the employment agency for their employees is intended to compensate for loss of wages in times of crisis. In the course of the corona pandemic, access to this instrument was made significantly easier, for example through a newly created entitlement for temporary workers. According to the latest data, 795,000 people in Germany had taken advantage of short-time work by September.