Federal government draft
Heil wants to double the duration of short-time work benefits
Employees can currently receive short-time work benefits for a maximum of 12 months. Labor Minister Heil wants to increase the duration to 24 months.
In order to curb a further increase in unemployment, Federal Labor Minister Hubertus Heil (SPD) wants to increase the maximum duration of short-time work benefits from 12 to 24 months. This emerges from the federal government’s plans, which the Federal Ministry of Labor confirmed to the German Press Agency. Several media outlets had previously reported on the corresponding draft regulation, which is also available to the dpa. Accordingly, the extension of the payment period to up to two years should apply until December 31, 2025 at the latest. After that, the maximum subscription period of one year should apply again.
“Without extending the duration of the benefit, it can be assumed that there would be a significant reduction in personnel in the companies affected by short-time work,” the draft states.
The red-green minority government can also pass the regulation without consulting the Bundestag or Bundesrat. According to government sources, the cabinet should give its approval before Christmas. That would be next Wednesday. According to plans, the regulation is scheduled to come into force on January 1, 2025.
According to the draft regulation, the number of people on short-time work in Germany rose from August to September 2024 from 175,000 to 268,000 according to preliminary and extrapolated data. Compared to the previous year, there were 116,000 or 76 percent more people who were on short-time work. According to the information, the number of short-time workers has almost tripled compared to September 2022.
Short-time work means that all or only some of the employees in a company work fewer hours than they would normally have to work. Employers can order short-time work if, for economic reasons, there is a temporary, significant loss of work with loss of pay that cannot be avoided. The payment of short-time work benefits by the employment agency is intended to relieve employers of costs and prevent dismissals.
According to the draft, the Federal Employment Agency will incur additional expenditure of 260 million euros due to the longer period of benefit. This would be offset by underspending of an unquantifiable amount for unemployment benefits that would otherwise be due, it is said.
dpa
Source: Stern
