- Phase
- Social code book III
- Native name
- Sozialgesetzbuch (SGB) III
- Type
- Working time flexibility
- Added to database
- 08 May 2015
Article
Section 6 - Remaining in employment
Subsection 1 - Short-time working allowance
Articles 95-111, 134
Description
The Social code book III provides for three forms of short-time working arrangements ('Kurzarbeit').
- The first, structural short-time working ('Konjunkturelle Kurzarbeit', KUG), is applicable in case of a temporary and unavoidable shortfall of orders due to economic downturns/crises or due to unavoidable disasters.
- The second form is short-time working in the event of restructuring ('Transferkurzarbeit', Transfer-KUG). In this case, the duration of short-time working is used for training or job transfer measures.
- The third arrangement, seasonal short-time working ('Saisonkurzarbeit', Saison-KUG) is a sector-related instrument to weather typical seasonal downturns (such as in the construction sector, for example).
In all of these cases, if employers want to introduce short-time work, they must first consult the works council and then apply to the Federal Employment Agency ('Bundesagentur für Arbeit') for approval.
The company has to have exhausted other options that might help to avoid using short-time work, such as granting leave days, use of holiday entitlements of previous years or of 10% of the working time account of the running year.
Short-time work may be set in place if one third of the workforce is affected by a wage drop of over 10% due to a temporary decrease in workload. The workforce in this case is defined as including standard and non-standard workers (excluding temporary agency workers and home workers). In the calendar month for which short-time work support is applied, at least one third of a company's employees (or one of several specific units) must be concerned.
If short-time work is approved by the Federal Employment Agency, the employer pays for the actual working time and the Federal Employment Agency contributes a short-time working allowance of 60% of the missing net wage. This share increases to 67% if the worker is a parent. Short-time working allowances are granted to standard and non-standard workers liable to social security contributions for monthly wages that do not exceed €7,300 in Western Germany and €7,100 in Eastern Germany (2023). Workers with ‘mini-jobs’ are not liable to social security contributions (earning up to €520 per month). An exemption related to the COVID-19 crisis allowing also to include temporary agency workers (holding a work contract with another employer) expired in June 2023. Also trainees are excluded.
The maximum duration of state-funded short-time working allowances is 12 months. An exception allowing to extend this period for up to 28 month expired in June 2022.
While a company is receiving public short-time working support, new employees can only be recruited to sections of the company that are not subject to short-time work. Moreover, it has to be proven that the vacancy cannot be filled by one of the company's current short-time workers. Dismissals during short-time working are possible, but the worker has to return to full-time employment during the notice period, and the employer is then no longer entitled to the public short-time working allowance for that worker.
Sources
- Sozialgesetzbuch III (Social Code Book III)
-
Brenke, K., Rinne, U. and Zimmermann K.F. (2011), Short-time work: The German answer to the Great Recession, IZA Discussion paper No. 5780
-
Glassner, V. and Galgóczi, B. (2009), Plant-level responses to the crisis: Can jobs be saved by working less?, ETUI Policy Brief, Issue 1, European Trade Union Institute
-
Aricò, Fabio R. and Stein, U. (2012), Was Short-Time Work a miracle cure during the Great Recession? The case of Germany and Italy, Comparative Economic Studies, Vol. 54, No. 2, pp. 275-297
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Social Code Book III
-
Realisierte Kurzarbeit (Monatszahlen)
-
Kurzarbeit (Jahres- und Monatszahlen ab 1992)
Citation
Eurofound (2015), Germany: Working time flexibility, Restructuring legislation database, Dublin,
https://apps.eurofound.europa.eu/legislationdb/working-time-flexibility/germany