Germany: coalition parties agree on a gradual increase in the short-time working allowance

The editorial team is offering you free access to this article
Start your free 1-month trial to access all our content

Following a meeting of the ruling coalition leaders on 22 April, an increase in the short-time working allowance, which at the start of the week 20 April looked like being an intractable point of contention between on the one hand, the trade unions and the Social Democratic Party (SPD), and on the other, the Conservative Party (CDU) plus the employers (c.f. article No.11860), was finally accepted at the end of day. So far, the short-time working allowance covers 60% (67% for employees with children) of the net income loss of employees placed on short-time working due to the reduction in the volume of hours worked. Employers can negotiate with the works councils to compensate all or part of the loss of earnings, and this has already occurred in many companies and especially in the industrial sector. However, with a current estimate of 4 million employees on short-time working, and rates of decline in activity often reaching as high as 100% in sectors already known to employ many low-wage workers (commerce, tourism, etc.), the trade unions and the SPD party have called for an increase in reimbursement rates from 60% to 80% (67% to 87% for employees with children) in order to keep many from falling below the poverty line. Hostile to a broad-based increase in the allowance, the Conservatives, with the backing of the employers, initially blocked the initiative. However on 22 April, a compromise was secured so that employees on short-time working and undergoing a reduction of a minimum of 50% of their working time will see the level of short-time working allowance rise from 60% to 70% (77% for employees with children) as of the 4th month of short-time working, and again from 70% to 80% (87% for employees with children) from the 7th month of short-time working. Furthermore, the government is immediately increasing the supplementary income ceiling allowed for partially unemployed people who work alongside their main activity in order to increase their incomes. The new ceiling will apply until 31 December 2020. In addition to the short-time working allowance, these workers will now be entitled to earn the level of net salary they had been earning each month prior to starting short-time working.

Do you have information to share with us?
What you absolutely must read this week
The essential content of the week selected by the editorial team.
See all
Spain: a bill to regulate internships
On 3 March, the Council of Ministers approved the bill on the “Status for persons undergoing non-professional practical training in companies”. The text limits the number of interns a company can...
France: Yves Rocher convicted of breach of duty of vigilance for infringement of freedom of association
The specialised chamber of the Paris Judicial Court convicted Yves Rocher on 12 March for breaching its duty of vigilance. The group was sued by Turkish employees dismissed in 2018 by a subsidiary...
12 March 2026
Belgium: bill facilitating voluntary overtime submitted to Parliament
On 10 February, the government submitted a bill to Parliament aimed at increasing the number of voluntary overtime hours from 120 to 360. These may be performed without specific justification or...
United Kingdom: launch of consultation on protection against detriment for industrial action
The British government launched a public consultation on 26 February regarding new protections for workers against "detriment" related to industrial action, scheduled to take effect in October...
12 March 2026
Most viewed articles of the month on mind HR
What readers clicked on the most last month.
What readers clicked on the most last month.
1
2026 TRENDS – CSR: A strategic asset for European companies?
mind HR is looking ahead at the trends set to shape 2026. Sustainability policy remains in flux after a year of CSR rollbacks across Europe. Companies are calling for greater predictability and...
26 February 2026
2
France: Yves Rocher convicted of breach of duty of vigilance for infringement of freedom of association
The specialised chamber of the Paris Judicial Court convicted Yves Rocher on 12 March for breaching its duty of vigilance. The group was sued by Turkish employees dismissed in 2018 by a subsidiary...
12 March 2026
3
EU: Council approves omnibus directive on sustainability
On 24 February, two months after the European Parliament, the Council of the EU adopted the omnibus package amending the Corporate Sustainability Reporting Directive (CSRD) and Corporate...
24 February 2026
4
ILO welcomes momentum in ratifying conventions
Despite the US scaling back its financial support, member states of the International Labour Organization continue to ratify its core conventions. In its latest annual report, published on 13...
17 February 2026
5
Taïwan va mettre en place une politique de lutte contre le travail forcé
L’accord commercial conclu le 12 février entre les États-Unis et Taïwan va amener ce dernier pays à développer une politique de lutte contre le travail...
19 February 2026
6
Germany: a corporate group supports local political engagement via its “Democracy Charter”
Large corporations in the Hesse region, surrounding Frankfurt, are defending local democracy by enabling employees to volunteer in local public life through an initiative dubbed the "Democracy...
11 March 2026