Interesting facts about short-time work allowance: Experience, number of applications and additional earnings
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Interesting facts about short-time work allowance: Experience, number of applications and additional earnings

The German government loosened up the requirements for applying for short-time work allowance a few weeks ago. Now there are the first practical experiences, numbers of applications and possible additional earnings of employees. Here are the first practical experiences and interesting facts about short-time work allowance and additional income.

A few weeks have passed since we presented the short-time working allowance as an instrument in the crisis. The Federal Government has already decided to increase the short-time working allowance in some cases.

Now we have gained experience regarding the time required to process applications, there are initial figures on the applications submitted and new regulations on secondary employment, through which employees earn extra money during short-time work.

We would like to share the insights we have gained with you.

How long does it take to process an application for short-time working allowance?

Due to our daily work with our clients, we have already advised and assisted several companies in the application process. It is not possible to make a general statement about the processing time.

This depends on the respective employment agency. In some cases the unbureaucratic application was followed by a fast processing within a few days. In other cases the processing took several weeks.

Significant increase in applications for short-time working allowance

By Easter Monday, 725,000 companies in Germany had registered for short-time working. There was an increase of 12 percent during the Easter week compared to the previous week, when 650,000 had been registered.

Out of approximately 2.2 million companies entitled to short-time work, about one third are thus in short-time work. It cannot be determined exactly how many employees are affected by short-time work in absolute figures.

However, the Federal Employment Agency assumes that the figure is significantly higher than the figure for the financial and economic crisis in 2009. At that time, companies sent 1.4 million employees into short-time working. The Federal Government currently estimates that around 2.1 million people are on short-time working.

Allocation of additional income to short-time work compensation

If you decide to introduce short-time working in your company, you must consider whether your employees‘ additional income will affect their entitlement to short-time work benefits.

The date of commencement of employment and the sector in which you work are decisive in this respect.

Start of employment before short-time working

If the employee in question was already in secondary employment before the start of short-time work, the activity has no influence on your entitlement to short-time allowance.

The calculation basis for the short-time work allowance remains unaffected. This also applies if the respective employee extends the secondary employment.

Start of employment while receiving short-time work allowance

A different situation arises if the employee only takes up a secondary employment while receiving the allowance. In this case, the calculation basis for the short-time work allowance is reduced by the remuneration from the secondary employment.

Exceptions to this rule are so-called system-relevant occupations. These include agriculture, health care and food trade. These sectors are excluded.

The calculation basis does not change here, regardless of the date on which the secondary employment commences.

This requires that the combined wage from the main job as well as from the secondary employment does not exceed the employee’s planned remuneration.

Our assessment

The application process is uncomplicated. This shows that short-time work allowance is accepted as an instrument during the crisis and ensures the existence of many companies.

Therefore, a timely approval can be essential for companies. The employment agencies should thus process the applications as uniformly and quickly as possible. Given that 2.1 million workers are expected to be on short-time work, we hope that the Employment Agencies are prepared accordingly in order to ensure that the process is handled quickly and unbureaucratically.

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