Germany: Berlin plans to increase short-time working allowance

Hubertus Heil, Germany’s employment and social affairs minister, has announced that he will open discussions with social partners on the level of compensation paid to people placed on short-time working in the coming weeks. The German state currently pays 60% of net wages (67% for employees with children) to employees on short-time work and pays 100% of the employer’s share of social security contributions. These sums are paid via the Federal Employment Agency. According to the Hans Böckler trade union foundation, which has just published a comparative study on short-time working across Europe, though the German idea of protecting jobs in times of crisis through massive recourse to short-time working has clearly been emulated, Germany is conversely at the bottom of the league table when it comes to the size of the short-time working allowance. Admittedly, under pressure from the major trade unions, many company agreements have been signed to raise this level of compensation (to between 75% and 100% of pay). However, as Thorsten Schulten, one of the authors of the study, points out, the fact that more and more companies have “abandoned social dialogue” creates a situation where millions of workers are not benefitting from these increases, especially in sectors such as care work, retail and education, which are very much in demand in times of crisis. The initiative announced by Heil is not an isolated one. It is supported by the parliamentary groups of the governing parties. The Conservatives (CDU/CSU) are considering a variable increase that would bring the allowance paid to those on short-time work at least to the level of a full-time minimum wage. Meanwhile the Social Democrats (SPD) are talking about an increase in the legal level from 60% of net income to 80% (67% to 87% for employees with children) for all employees that ordinarily earn less than €3,000 gross per month.