The coalition committee consisting of the executives of the CDU, CSU and SPD has agreed to continue its support for companies and employees in view of the continuing effects of the coronavirus pandemic. One of the key decisions adopted by the Federal Cabinet is the extension of the short-time working allowance (Kurzarbeitergeld, in short KUG).

• The period for which the short-time working allowance can be claimed will be extended to up to 24 months, at the latest until 31 December 2021, for companies that have introduced short-time work by or before 31 December 2020.
• The current special regulations on easier access to the short-time working allowance, which stipulate that no negative working time balances need to be built up and that only 10 % of a company’s workforce need be affected by a loss of earnings, will continue to apply until 31 December 2021 for all companies that have introduced short-time working by 31 March 2021.
• For temporary work agencies that have introduced short-time working by or before 31 March 2021, the possibility for temporary workers to receive the short-time working allowance will be extended until 31 December 2021.
• The social security contributions will be fully reimbursed until 30 June 2021. From 1 July 2021 to 31 December 2021 at the latest, half of the social security contributions will be reimbursed for all companies that have introduced short-time work by 30 June 2021. This reimbursement of half of the costs can be increased to 100 % if a qualification measure takes place during short-time work. The requirement in this case is that there must be a need for further training, the measure comprises more than 120 hours and both the institution responsible for the qualification measure and the measure are approved.
• The temporary increase in the short-time working allowance to 70 % or 77 % from the fourth month the allowance is paid and to 80 % or 87 % from the seventh month the allowance is paid is also extended until the end of 2021, provided that entitlement to the short-time working allowance began by 31 March 2021.
• Of the existing temporary additional income options, the regulation stipulating that marginal employment (what are known as ‘mini jobs’ with a salary of up to EUR 450) are generally not offset against the short-time working allowance will be extended until 31 December 2021.

As at: 31 October 2020

Author: Birgit Ennemoser, Managing Director Human Resources, Auren

Source: Federal Ministry of Labour and Social Affairs

Image: Adobe Stock, Korn V.

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