On Tuesday 8th June 2021, the German government agreed to a plan from Labour Minister, Hubertus Heil, to extend special rules for short-time work allowances until September 2021 as a “further bridge” to an intensified economic recovery.

What is the short-time work allowance?

Referred to in Germany as ‘Kurzarbeitergeld’, the short-time work allowance is paid for by the employment agency (Agentur für Arbeit) as partial compensation for loss of earnings as a result of a temporary cut in working hours. The allowance reduces the costs faced by the employer in the context of employing workers and allows businesses to continue to employ their workforce, preventing the need to dismiss staff.

Originally, these eased conditions were due to expire on 31st June 2021. The goal of this extension is to secure jobs, get employees out of short-time work earlier or to hire new employees. Businesses that introduce short-time work by 30th September 2021 can continue to make use of the simplified access conditions for short-time work benefits, however if businesses have had short-time working in place before, there must be a three month break in between. A business can register for short-time work if at least 10 percent of their employees are affected by loss of work.

For more information on coronavirus support measures for employers and employees, visit the activpayroll latest news page.

If you are interested in doing business in Germany, find out everything you need to know about payroll, tax, social security, employee benefits, work permits, employment law and more in the activpayroll Guide to Doing Business in Germany. This is available as a free PDF to download.

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