The German Parliament passes an act for a limited improvement of the regulations for short-time work in a crisis

On March 13, 2020, the German Bundestag passed the Act on a Limited Improvement of the Regulations for Short-Time Work in a Crisis. The act enables the German Federal Government to quickly adjust the conditions for receiving short-time work compensation in view of the corona crisis.

The objective of the Act on the Promotion of Further Education in Structural Change and the Further Development of Educational Support (also termed Work of Tomorrow Act or, in German: "Arbeit-von-Morgen-Gesetz") introduced to the German Parliament (Bundestag) on 13 March 2020 is to improve the promotion of further (vocational) education for employees and the regulations governing the educational support. Because of the dynamic developments around the COVID-19 Pandemic, however, the legislative initiatives were expanded with a further Act on a Limited Improvement of the Regulations for Short-Time Work in a Crisis which includes regulations aiming at a simplification and facilitation of access to short-time work compensation.

The Act concerning the simplification and facilitation of access to short-time work has been passed by the German Parliament on 13 March 2020. The Act concerning (vocational) education and educational support has been referred back to the competend committee.

In the following, you find an overview of the planned and passed measures.

Promotion of further training for employees

In view of the extent and speed of structural change in the working environment, there is a need to increasingly qualify employees through further (vocational) training measures.

Simplification of application and approval procedures

Application and approval procedures for the promotion of continuing professional training for employers and employees are to be simplified. If a group of employees with a comparable degree, comparable education goals or comparable need for promotion is to be qualified, collective applications and approvals will become possible.

Higher subsidies

In future, there shall be a possibility of paying higher subsidies if a larger proportion of the employees of a company require further training. The existing subsidy possibilities created by the Qualification Opportunities Act will be increased by ten percentage points if at least one fifth of a company's workforce requires adjustment to their qualification. The increase in subsidies is applied to both training course costs and wage subsidies.

Qualification in transfer companies

Qualification measures in transfer companies will be expanded. In particular, it will now be possible to promote the qualification of all employees regardless of age and previous qualifications. The limitation of support to older and low-skilled workers is to be abolished. In addition, the possibility for the Federal Employment Agency to contribute to the costs of training in transfer companies set up by SMEs is to be increased to up to 75 percent. Furthermore, it will become possible to continue funding qualification measures beyond the end of the period of entitlement to transfer short-time work allowances.

Legal entitlement to further education for low-skilled workers

Low-skilled workers are to be given a basic legal entitlement to the promotion of further education by employment agencies and job agencies. This is intended in order to improve their career and promotion opportunities. In addition, it is the intention to make a contribution to reducing the high unemployment rate in this group of people and to obtain potential skilled workers.

Further development of educational support

It is the legislator’s intention to also further strengthen educational support: assisted training is to be consolidated and further developed. In this context, assistance during training and assisted training are to be merged. The possibility of providing assistance to employees who are still completing their vocational training with the further developed assisted training shall be opened up and also made available to non-Germans who complete their vocational training in Germany. A travel cost subsidy will be created for participants in introductory training. 

Extension of the scheme for the training premium

The scheme for the payment of further education bonuses for successful intermediate and final examinations is to be extended until the end of 2023 for admissions to professional training courses. This regulation has so far been valid for admissions to professional qualification-related measures that begin until 31 December 2020.

Change in job search and unemployment registration

In addition, early job search registration and unemployment registration are to be developed further in line with the times. In the future, it will also be possible to deal with both registrations electronically on the portal of the Federal Employment Agency. At the same time, the placement process for rapid reintegration will be strengthened.

New conditions for the receipt of short-time work compensation

In order to be prepared for times of crisis - such as the COVID-19-Pandemic - the Act on a Limited Improvement of the Regulations for Short-Time Work in a CrisisAct , which was passed on 13 March 2020, contains temporary authorizations for the Federal Government to facilitate access to short-time work compensation.

In that context, the Act foresees the following measures:

  • The minimum ratio of employees in a company affected by reduced working hours/work time will be brought down to 10%. So far, the figure is one third of the workforce.
  • The need for building up negative working time balances before payment of short-time allowance will be completely or partially abolished. Under current law, prior to making use of the grants, working time accounts must be used to avoid short-time work and working time balances must be run into a negative position.
  • There will be a possibility for a complete reimbursement for employers for all or part of the social security contributions that they normally have to pay for their employees.
  • Also agency workers will be granted the possibility to profit from the reduced hours/short time work compensation benefits.

Authors: Dr. Charlotte Sander, Daniela Wasseram 

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