06-04-2020  | Update Employment Law June 2020

Social Package II (changes to short-time working benefit)




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In the context of the corona crisis the German Federal Government has demonstrated that it is capable of acting quickly and pragmatically. The conditions for payment of short-time working benefit had already been adapted to the corona situation through past measures, and on May 14, 2020 the German parliament approved further changes through the Social Package II. The changes of relevance to employment law are set out briefly below.

The Social Package II introduces a progressive increase in short-time working benefit, provided that working hours have been reduced by at least 50%. With effect from the 4th month of payment, the short-time working benefit will be increased to 70% of the consolidated lump-sum net remuneration, rising to 80% as from the 7th month. An additional 7% will be paid to households with children (i.e. 77% as from the 4th month, 87% as from the 7th month). However, this measure will apply up until December 31, 2020 at the latest.

Employees receiving short-time working benefit have also been given extended possibilities in terms of additional earnings. On the one hand, the possibility of taking up a secondary occupation after the start of the short-time working benefit has been extended until December 31, 2020. The upper limit for additional earnings remains unchanged at the previous monthly income. Unlike before, the new secondary occupation must no longer be in an essential sector, but rather can be in any profession.

Finally, the entitlement period for unemployment benefits has been extended by three months as a once-off measure. A precondition is that the entitlement to unemployment benefits would end between May 1 and December 31. The reasoning is that, due to the current economic situation, unemployed persons have only very low prospects of finding new employment.

Summary

This move is designed to take account of the exceptional situation on the employment market and the ongoing restrictions in connection with the corona pandemic. Nevertheless, it is not yet clear to what extent these measures will achieve the desired effect. Above all the success of extending the possibilities for additional earnings must be viewed with skepticism. It remains to be seen whether there will be sufficient employment opportunities for all persons on short-time working, and whether they are in a position to make use of these opportunities, given the lack of childcare facilities.

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