#ShortTimeWork

Short-time working allowance has been improved: Higher
reimbursement contributions in the event of lower entry conditions

Short-time working allowance has been improved: Higher
reimbursement contributions in the event of lower entry conditions

The German government has paved the way for the simplified approval of short-time work benefits. Under the COVID-19 crisis, companies will receive support to avoid redundancies and return to normal business operations when employment levels improve. Below we have summarized the topic for you.

Requirements

  • A claim to STA* exists if at least 10% of the employees (usually 30%) have a loss of earnings of more than 10%
  • Legal basis for the introduction of short-time work must be available (collective agreement applicable in the company entitling to short-time work, works agreement with works council, individual agreement for companies without a works council)
  • In view of the current crisis situation, the Federal Employment Agency has decided to refrain from using recreational leave to avoid absences from work until December 31, 2020. However, this only applies to holiday entitlements for the current calendar year. If there are still transferable holiday entitlements from the previous year, these must generally be used to avoid the payment of short-time working compensation.
  • The other conditions for the entitlement to STA remain valid:
    • unavoidable event
    • economic cause
    • evaluation of the temporary redeployment of workers
    • economically reasonable countermeasures must have been taken beforehand (e.g. work in storage, clean-up or repair work)

Main effects for companies

  • Under the COVID-19 crisis, companies receive support to avoid dismissals and return to normal business operations when workloads improve
  • For 12 months, retroactively as of March 1, 2020; the statutory period for which short-time work compensation is paid is 12 months; it can be extended to up to 24 months by statutory order of the Federal Ministry of Labor and Social Affairs
  • Short-time working allowance is also available for employees in temporary employment
  • In connection with the COVID-19 crisis, non-profit enterprises such as associations, day-care centers and cultural workers can also receive short-time work benefits
  • Waiving the creation of negative working time accounts
  • Full reimbursement of social security contributions from the Federal Employment Agency, also retroactively as of March 1, 2020, to the end of 2020
  • Please note:
    • Reimbursements are only made in arrears, so the employer makes advance payments for the short-time work allowance. According to the Federal Employment Agency, applications during the Corona crisis will be processed more quickly.
    • Despite the rapid granting of short-time work due to simplified examination, it is granted subject to examination and with the possibility of subsequent, detailed regular external audits. This means that if the application is incorrect or incomplete, the grant can be revoked retroactively and any incorrectly paid social security contributions or reimbursements can be processed retroactively - with all liability risks of the management

We will be pleased to support you in all your questions regarding short-time work allowances or other labor law issues. Our specialists will also be pleased to assist you in drawing up company agreements or in negotiations with the works council.

PLUTA provides support for:

  1. Pre-financing of salaries and social security contributions necessary, reimbursement by the Federal Employment Agency will be affected retrospectively
    (Note: at present we do not yet have any reliable empirical data on payment dates; delays may occur due to the current high workload of the Federal Employment Agency)
  2. Extensive documentation required
  3. Targeted control of short-time work via division-specific capacity planning

Contact us now

*) STA: Short Time Work Allowance

further measures to mitigate COVID-19-related economic damages

#TaxDeferral

  • Application for interest-free deferral of mature and maturing taxes until end of 2020
  • Applications for adjustment of advance payments (income tax / corporate tax / VAT)
  • Refund of advance payments is possible
  • Suspension of late payment penalties / enforcement measures until the end of 2020

#COVInsAG*

  • Conditional suspension of the obligation to file for insolvency until September 30, 2020, if the insolvency maturity is based on the consequences of the COVID 19 pandemic and there are prospects of eliminating the insolvency
    • Insolvency maturity is due to the spread of the COVID-19 virus and
    • prospect of eliminating an existing insolvency if no insolvency had occurred by December 31, 2019
  • Extensive suspension of liability and rescission rules as well as criminal law treatment

#KfWLoans

  • Risk assumption by KfW of up to 90% of the loan volume
  • Application for and granting of loans via intermediary financing partners ("house banks")
  • Up to 800 TEUR with 100% assumption of the credit default risk

#LiquidityAid

  • Liquidity assistance from the Bundesländer for companies and the self-employed (including emergency aid, guarantees, bridging loans, mezzanine)

#CovCivilLaw

  • Temporary right to refuse performance in the context of continuing obligations (for consumers and micro-entrepreneurs**)
  • Temporary deferral within the framework of consumer loan agreements
  • Restriction of the possibility of termination of a rental and lease agreement by the landlord
  • Holding of general meetings and shareholders' meetings by means of electronic communication
  • Measures for holding staff council elections in order to ensure that staff councils as well as works councils have the basic capacity to act and make decisions (implementation planned)

*) Act on the mitigation of the consequences of the COVID-19 pandemic in civil, insolvency and criminal proceedings of March 27, 2020, Federal Law Gazette Part 1 No. 14, 569 ff.

To mitigate COVID-19-related economic damage, further extensive measures by companies are necessary.

PLUTA supports