Germany: COVID-19 Update on Latest Government Measures

Increase of short-time work compensation

The German government has recently passed a new law on social measures to combat the negative impact of the COVID-19 pandemic on the German economy and the German employment market. The so-called “Social Protection Package II” includes, amongst other things, a limited increase of the short-time work compensation until the end of 2020. Short-time work allows the employer to temporarily reduce the employees’ working time and remuneration by up to 100%. Short-time work is currently permissible for a duration of up to 12 months, however, this may still be extended to 24 months through a government order. The option of short-time work is presently being widely used by companies in Germany. It is estimated that around 7 million employees are currently on short-time work, which is the highest number ever measured.

Employees affected by short-time work receive a state compensation, which usually amounts to 60% of the lost income for employees without children, and TO 67% for employees with children. For employees whose working time is reduced by at least 50%, the state compensation has now temporarily been increased by the government to 70% of the lost income from the fourth month of short-time work and to 80% of the lost income from the seventh month of short-time work. For employees with children living in the household, higher percentages of 77% and 87% apply. Furthermore, the options for employees on short-time work to obtain additional income have been expanded. Until the end of the year 2020, employees receiving short-time work compensation will be allowed to have an additional income through a secondary employment up to the amount of their previous monthly salary. Additionally, the period for which unemployment benefits are paid will be extended by three months for unemployed persons, whose entitlements would have expired between May and December 2020.

Tax reliefs

In response to the economic effects of the COVID-19 pandemic, the German government has recently decided on various tax reliefs. In particular, the general value added tax will be reduced from 19% to 16% until the end of 2020.

Compensation claim for working parents extended

As a result of the COVID-19 crisis, schools and kindergartens were closed in Germany as from the middle of March 2020. While they are now mostly open again, not all children are yet allowed to attend, and the hours of care are often limited in order to adhere to safe hygiene concepts. In light of this, the existing compensation claim towards the state for working parents who are unable to work due to necessary child care obligations, has been extended from 6 weeks to up to 20 weeks. The compensation amounts to 67% of the lost net income, and a maximum of EUR 2,016 per month.

Virtual works council meetings

Bans on meetings and heighted hygiene guidelines have caused considerable problems for works councils, and has greatly hindered efforts to carry out their work during the COVID-19 epidemic, as the law generally requires the members of a works council to meet in person. This has now been changed temporarily, until the end of 2020, allowing works councils to make legally valid decisions via telephone or video conference. The same applies to staff meetings, which can now, temporarily, be held via video conference.

Virtual court hearings

Many labour courts suspended most of their respective hearings during the COVID-19 crisis, which has led to an accumulation of a large number of court proceedings. Furthermore, both employers and employees were faced with long delays in their current proceedings. In order for the labour courts to return to a “new” normal routine, the temporary possibility to conduct hearings by telephone and video conference has now been implemented. In addition, the Federal Labour Court now has the option of rendering a verdict through an entirely written proceeding.
 

Pusch Wahlig Workplace Law attorneys are available to assist you with these and other workplace issues. For more information, visit https://pwwl.de/

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.