Coronavirus and Short Time Work

The coronavirus epidemic is spreading faster every day and is therefore having an ever greater impact on our daily lives and especially on the economy. Many employers are ordering work from home, some are ordering the reduction of overtime and vacation entitlements, and some businesses no longer have any work for their employees at all due to the nature of their industry. Where there is no work, short time working allowance comes into play in order to safeguard the employees wages and save the company from impending insolvency.Short time working allowance in overviewMany businesses no longer have work for their employees due to their structure and the specific features of their industry. Hotels, for example, have no need for cleaners if rooms remain empty due to official orders. In situations where employees have no work, the employer can notify short time work to the Federal Employment Agency and apply for short time working allowance under particularly favourable conditions.Conditions for short time working allowance and new rulesCompanies can apply for short time working allowance for up to twelve months if, through no fault of their own, they temporarily run into financial difficulties due to economic causes such as the spread of the coronavirus, are unable to employ their workforce fully and at least 10 percent of the employees are affected by a loss of pay.The granting of short time working allowance has been made easier in particular by new rules introduced by the federal government because of the coronavirus. Temporary agency workers can now also receive short time working allowance. Short time work can also be arranged without prior use of working time accounts. The Federal Employment Agency will reimburse the employer for social security contributions.Application for short time working allowance by the employerCompanies should make use of this support in times of crisis, because maintaining business operations without state support is often impossible. Short time work is notified by the employer to the competent Federal Employment Agency and an application for short time working allowance is submitted.Many employers therefore seek legal assistance because the application procedure is confusing and complicated for many self employed persons and small and medium sized enterprises. Attorney at law Hans Jörg Briest and his team in Berlin support you professionally and quickly in notifying short time work and applying for short time working allowance.Effects on employeesShort time working allowance due to the coronavirus has a twofold advantage for employees, because they continue to receive wages despite short time work and redundancies can also be avoided. The only disadvantage for employees is that short time working allowance is lower than full pay. For employees with children it amounts to 67 percent of the difference in net pay, and for employees without children 60 percent of the difference in net pay.However, the security of remaining in employment during and after the crisis and not being dismissed is such a major advantage for most employees that the temporarily lower pay is accepted. In addition, in companies where there is a works council, the works council can negotiate an additional payment by the employer. Many employers also make such top up payments voluntarily.Participation of employees and works councils in short time workIn order to apply for short time working allowance, the consent of all employees is required. The employer must obtain this in advance either by individual or collective agreement. If there is a works council in the company, it must be involved in the procedure pursuant to section 87 of the Works Constitution Act and the consent of the works council is required for short time work.This consent then replaces the consent of the individual employees. Employers have to negotiate with the works council in this context. Attorney at law Hans Jörg Briest and his labour law team in Berlin will support you in this process.Attorney at law Hans Jörg Briest and his team in Berlin will also inform you about further changes and will advise and assist you in times of crisis.