Federal cabinet extends easier access to short-time allowance

From Andrea Thomas

BERLIN (Dow Jones) – On Wednesday, the Federal Cabinet extended the period of drawdown and simplified access for companies to short-time work by three months until the end of March. Employers will continue to be fully reimbursed for their social security contributions. This is intended to mitigate ongoing corona-related damage for employees and companies in view of the increasing number of infections. The aim is to stabilize employment relationships in the first quarter of 2022 and avoid unemployment and bankruptcies.

The cabinet decided that the option of using the maximum period of withdrawal of short-time allowance of up to 24 months should apply for a further three months until March 31, 2022. In addition, the relief and special regulations for drawing short-time allowance will be extended until March 31, 2022.

“Short-time work is proving to be an effective instrument for securing millions of jobs during the COVID-19 pandemic,” said Federal Labor Minister Hubertus Heil (SPD) after the cabinet decision. The number of infections in Germany is currently rising faster than ever before in this pandemic. Individual federal states have already introduced so-called 2G regulations to contain the infection process.

“It cannot be ruled out that further tightened measures will have to be taken, with significant effects on the local retail trade, the hospitality industry and the entire service sector,” said Heil. In addition, delivery problems caused by the pandemic weighed on production in the manufacturing sector. For many companies it is therefore not foreseeable when they will be able to reach the pre-crisis level again.

“With the short-time work allowance extension ordinance, we are building a bridge to secure jobs for the companies concerned and their employees until the end of the first quarter of 2022, thereby giving them planning security,” said Heil.

In addition, employers are reimbursed a further 50 percent of the social security contributions if their employees take part in further vocational training that is subsidized under certain conditions during short-time work. The course costs for these training courses can also be reimbursed in full or in part, depending on the size of the company

The federal government and studies by the OECD and the Institute for Macroeconomics and Business Cycle Research (IMK) assume that short-time work has saved millions of jobs. The instrument is very expensive, but cheaper than mass unemployment.

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DJG / aat / hab

(END) Dow Jones Newswires

November 24, 2021 04:32 ET (09:32 GMT)

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