Short-time work allowance (“Kurzarbeitergeld”)

Deadline for March: 31.03.2020!

As more and more startups are planning to apply for short-time work compensation (“Kurzarbeitergeld”) for all or part of their employees, we would like to help you with a handout describing the necessary step-by-step procedure that must be followed.

Step 1: Agreement on short-time work with employees

In case short-time work is not already allowed by your employment contracts, an applicable collective agreement (“Tarifvertrag”) or a general agreement between the works committee and the management (“Betriebsvereinbarung”), additional agreements on the permissibility of short-time work must be reached with all affected employees. Please reach out to us if you need a free sample for such an additional agreement with your employees.

Step 2: Informing employees about the introduction of short-term work

The affected employees must be informed of the extent to which they will have to reduce their individual working hours.

Step 3: Notification of short-time work at the employment agency (“BAFA”)

Short-time work allowance can be applied for retroactively as of 01.03.2020. Important: In order to apply for short-time working allowance as early as 01.03.2020, the notification of short-time work must be received by the responsible department of the Employment Agency (“Bundesagentur für Arbeit” = “BAFA”) by 31.03.2020 at the latest. The notification should be made by e-mail. The Employment Agency will send you a confirmation of receipt in response to your e-mail.

According to the new legal situation, proofs of reduction of overtime and the agreement on short-time work with the individual employees no longer have to be attached to the notification.

Step 4: Time sheet for all affected employees

The employment agency requires all affected employees to provide time sheets as proof of their hours actually worked. We will be happy to send you a sample of a sufficient timesheet. Alternatively, evaluation from certain time recording systems should be sufficient.

Step 5: Calculation of the short-time working allowance and payment of the reduced salary to the employees concerned

Calculate the reduced salary of the affected employees and pay it out to them.

Step 6: Applying for reimbursement of short-time work allowance

From the first day of the following month, you apply to the employment agency for reimbursement of the short-time working allowance. The reimbursement application must be submitted within three months. You must enclose time sheets for each employee concerned showing the work actually performed during the application period.

Step 7: BAFA-review at the end of short-work

After the end of short-time work, the employment agency checks whether all the conditions for short-time work have actually been met. If there are justified complaints, benefits that have been granted have to be paid back.

We are happy to answer your questions regarding short-time work allowance at any time.

Please reach out to thomas@startup-lawyers.de.

Take care!