The new short-time working allowance regulation (KugV)

On the basis of § 109 Para. 5 SGB III (new version), the “Regulation on Facilitating Short-time Work” (Kurzarbeitergeldverordnung, KugV) was issued on 25 March 2020. In summary, the ordinance contains three facilitations for access to short-time work compensation: The requirements for the granting of short-time working allowance are reduced, social security contributions on the short-time working allowance are fully reimbursed to the employer by the Federal Employment Agency and short-time working is also made possible for temporary employment agencies that employ temporary workers.

Which requirements are lowered for the granting of short-time work compensation by the short-time work compensation regulation?

As a result of the short-time working allowance ordinance, the materiality threshold for employees affected by the loss of working hours in a company has been lowered from one third of the workforce to 10% of the workforce. Contrary to the previous legal regulation in § 96, Subsection 1, Sentence 1, No. 4, SGB III, employees are entitled to short-time working allowance if at least 10% of the employees employed in the company are affected by a loss of earnings amounting to 10% of their monthly gross salary.

A company within the meaning of the provision on short-time work compensation is also a company department. A plant department is a part of a company that is physically, personnel and organizationally separate from the company as a whole and which fulfills its own purpose with its own technical equipment.

Until the end of the year, no recreational leave from the current calendar year is claimed to avoid short-time work. If short-time working is introduced towards the end of the holiday year or if there are still transferred holiday entitlements, i.e. remaining holiday entitlements from the previous holiday year, the time at which the remaining holiday is to begin must be determined in order to reduce the loss of working hours.

There will be no accrual of negative working time balances (“minus hours”) for payment of short-time working compensation. Only the reduction of positive working time balances – with a few legal exceptions – continues to be a prerequisite for receiving short-time work compensation.

How are social security contributions reimbursed by the Federal Employment Agency?

Until 31 December 2020, the employer will be reimbursed by the Federal Employment Agency for the social security contributions (employer and employee contributions) which he alone has to bear while receiving short-time working compensation. The lump-sum reimbursement is based on the social insurance lump sum of 20 percent of the assessment salary, less the amount for employment promotion. The application must be submitted to the Federal Employment Agency in whose district the payroll accounting office is located.

What changes does the short-time working allowance regulation for temporary workers entail?

The right of temporary workers to remuneration regulated in § 11, Subsection 4, Sentence 2, of the German Law on Temporary Employment (Arbeitnehmerüberlassungsgesetz) will be revoked if short-time work is agreed for the loss of work and for the period for which the temporary worker receives short-time work compensation under the Third Book of the Social Security Code. The short-time working allowance ordinance now also gives temporary employment agencies the opportunity to agree short-time working with their temporary workers and to apply to the Federal Employment Agency for short-time working allowances for temporary workers.