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COVID 19 short-time work compensation rules shall be extended

- Draft Employment Protection Act adopted by Federal Cabinet -

On 16 September 2020, the Federal Cabinet adopted the draft law on employment protection as a result of the COVID 19 pandemic (Employment Protection Act) together with the draft of a First Ordinance amending the Short-time Workers' Compensation Ordinance and the draft of a Second Ordinance on the duration of short-time work compensation.

Many regulations on short-time work compensation are temporary and expire at the end of the year. In order to continue the successful measures, the Federal Cabinet has adopted the draft Employment Protection Act and two ordinances.

The package of measures comprises the following components:

I. Act on employment protection as a result of the COVID 19 pandemic
- The regulation to increase the short-time working allowance (to 70/77% from the fourth month and 80/87% from the seventh month) is extended until 31 December 2021 for all employees whose entitlement to short-time working allowance has arisen by 31 March 2021.
- The existing fixed-term additional income regulations will be extended until 31 December 2021 to the extent that remuneration from marginal employment taken up during short-time working remains uncredited.
- In addition, the incentive to use periods of absence from work for further vocational training is further strengthened by the fact that half of the reimbursement of social security contributions regulated for these cases is no longer linked to the fact that the qualification must be at least 50% of the period of absence from work.

II. First regulation amending the short-time working allowance regulation
- The access facilities (minimum requirements, negative working time balances) will be extended until 31 December 2021 for companies that have started short-time working until 31 March 2021.
- The opening of the short-time working allowance for temporary workers is extended until 31 December 2021 for temporary employment agencies that have started short-time working until 31 March 2021.
- The full reimbursement of social security contributions during short-time working is extended to 30.6.2021. From July 1, 2021 to December 31, 2021, 50% of social security contributions will be reimbursed if short-time work has begun by June 30, 2021.

III. Second regulation on the period of entitlement to short-time working compensation
- The period for which short-time working compensation is paid will be extended to up to 24 months for companies that have started short-time working by 31 December 2020, but no longer than 31 December 2021.

The Employment Guarantee Act is now being dealt with in the parliamentary procedure. It is to enter into force together with the two ordinances on 1 January 2021.

Please do not hesitate to contact us for any questions

 

Björn Christian Gerow

Steuerberater/Tax Advisor

Fachberater IStR/Specialist Advisor for International Taxation

b.c.gerow@egsz.de

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