Germany: short-time working allowance extended until June 2022

Germany’s labour and social affairs minister Hubertus Heil announced on Wednesday 9 February that short-time working is to be paid until the end of June 2022, meaning the measure will have been in place for 28 months instead of months as planned. When announcing the extension of measure, introduced due to the pandemic, the minister said it would be a “real shame to lose healthy companies in the home stretch.” Companies are eligible for short-time working as soon as at least 10% of staff are without work or in reduced activity. For the employee, the allowance increases to 70% of the net salary (up from 60% previously) from the fourth month and to 80% from the seventh month. Employees with children receive 77% of their net salary (up from 67%) from the fourth month and 87% subsequently. When it comes to employers’ social security contributions, the employer only has to pay 50% of the amounts usually deducted. In return, employees on short-time work must be offered opportunities to gain qualifications. According to the Federal Employment Agency (BA), more than 88,300 companies are currently applying short-time working measures, affecting 574,000 employees throughout Germany (figures from January 2021). These figures mark a sharp decline from the peak of 609,000 companies and almost six million employees in April 2021.