Germany: regulations concerning access to short-time working are extended until end Sept 2021

On 09 June, Germany’s Federal Council of Ministers (Bundeskabinett) adopted a new decree that extends the rules facilitating access to short-time working, including that which addresses social contributions cover for people on short-time work (c.f. article No.12127). The State currently covers 100% of the social security contributions for these short-time workers. This measure, which was scheduled to expire at the end of June 2021, will now be extended by three months to 30 September 2021, at an estimated cost of €2.6 billion. Minister of Social Affairs and Labour, Hubertus Heil (SPD), justified this decision in a press conference by explaining that the economic crisis caused by the Covid-19 pandemic was not yet over, that economic uncertainties persist in many of the industries that have been hard hit by the pandemic (entertainment, catering, retail), and that it is important to protect jobs. While the Social Democrat minister acknowledged short-time work is “very expensive”, the alternative would be higher unemployment, which would cost even more. According to the minister, 2.61 million people are currently on short-time work. In April 2020, that number was 6 million.