Short-time allowance

Many start-ups applied for short-time work benefits in spring shortly after the outbreak of the Corona pandemic. A lot has happened since then. For some companies, the easing measures have led to economic recovery, while others are still struggling to survive. Politicians have not remained inactive either and have repeatedly approved changes to the short-time work allowance. As it is difficult to keep up to date with all the new developments in day-to-day business during the crisis, especially for small companies, we provide a brief “corona update” on the subject of short-time work benefits here.

Easier Access:

Three statutory measures are designed to make it easier for companies to access short-time work benefits. Companies can now already register for short-time work if ten percent of employees are affected by a loss of working hours of more than ten percent. Previously, at least one third of employees had to be affected by the reduction in working hours. This regulation was extended until 31.12.2021.

Until now, companies with agreements on fluctuations in working hours had to use negative working time balances to prevent short-time work. This regulation is now temporarily suspended. Even without accumulating negative working time balances, a company can now apply for short-time work. Temporary workers can also receive short-time work compensation under the new regulations. This was previously not possible.

Extension of the period of entitlement:

The period for which short-time work benefits are paid is also extended from 12 to up to 24 months. This applies to all companies that have introduced short-time working by December 30, 2020.

Increase in short-time work compensation:

Employees themselves will also receive assistance. As a rule, employees will receive 60 percent of their lost net pay for periods of short-time work. However, this can lead to considerable financial difficulties, especially for employees who work short-time for a longer period of time. It has therefore now been decided that the short-time working allowance for employees who are on short-time work for at least 50 percent will increase to 70 percent of the lost net salary from the fourth reference month and to 80 percent of the lost net salary from the seventh month. Employees who have at least one child will each receive 7 percent more.

Reimbursement of social security contributions:

The full reimbursement of social security contributions during short-time work is also to be extended. From July 1, 2021 to December 31, 2021, social security contributions will be reimbursed up to 50 percent.

Additional earnings possible

In principle, additional earnings for secondary employment taken up during short-time working are fully offset against the short-time working allowance. This regulation has been suspended until December 31, 2020, thus enabling additional earnings for sideline jobs during short-time working. Now, the possibility of earning additional earnings during short-time working has been extended until December 31, 2012.

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