Short-time work allowance will be extended until December 2021

Short-time work saved many jobs in the Corona crisis. Sectors such as trade, gastronomy, tourism or trade fairs are still affected. Now the coalition wants to help workers and companies further.

Companies in Germany can further secure jobs in the Corona crisis through simplified short-time work. The leaders of the Union and the SPD agreed to extend the simplified short-time work from regular 12 to up to 24 months.
The extended period is to apply to companies that have introduced short-time work by December 31, 2020. At the longest, the short-time allowance should be extended until December 31, 2021. So that the Federal Employment Agency (BA) can shoulder the billions in costs for short-time work, the coalition wants to loosen tax money – as a grant and not as a loan.
The currently applicable rules for easier access to short-time work allowance should apply until December 31, 2021 – for all companies that started short-time work by March 31, 2021. The point here is that only 10 percent of the workforce in a company has to be affected by a loss of pay and that negative working time balances do not need to be built up.
The social security contributions should be fully reimbursed by June 30, 2021. From July 1, 2021 to December 31, 2021 at the latest, half of the social security contributions are to be reimbursed for all companies that have introduced short-time work by June 30, 2021. This half reimbursement can be increased to 100 percent – but only if qualification takes place during short-time work.
The short-time work allowance will be increased further to 70 or 77 percent from the fourth month and to 80 or 87 percent from the seventh month. These rules are to be extended to December 31, 2021 for everyone who is entitled to short-time work benefits by March 31, 2021. The regular short-time allowance amounts to 60 percent of the lost net wage, 67 percent for working people with children.
The rule that mini-jobs up to 450 euros are generally free of credit will be extended from existing additional earning opportunities. The possibility that temporary workers can receive short-time work allowance is extended. Applicable tax relief for employer subsidies on short-time work allowance is granted until December 31, 2021. And depending on the development of the pandemic, a further possible extension should be decided later.
The Union recently opposed what it considered to be an overly generous extension of the instrument. For example, the CDU labor market expert Weiß criticized the fact that, according to Heil’s original plans, companies should receive full reimbursement of social security contributions from employees on short-time work by March 2022.
IG Metall boss Jörg Hofmann had demanded as a condition for the reimbursement of social security contributions for employers that companies refrain from redundancies for operational reasons. Further qualification should also be necessary for a complete reimbursement. The Institute for Employment Research (IAB) had also advocated that an extension of short-time work should usually be linked to using the time for professional qualification.
Critics had warned that short-time work should not be mixed with short-time work in structural change due to the Corona lull. Businesses shouldn’t be artificially preserved.

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