Working Life > Modes of Working > Short-Time Work

Working Short-Time: Rules and Judgements

Definition, Explanation

Working short time is an instrument for companies to avoid dismissals difficult economic situations. In times of temporary low demands, employees' working hours number
can be decreased or put to 0. During the tie of reduced working hours, the employees receive short workers money which is something like a partial unemployment benefit. The employer saves personnel expenses this way, without having to dismiss employees. The employees, in turn, temporarily lose some income, since the short workers money compensates less than completely for the decreased remuneration, but they do not lose their job.

During short time work the employees work less or not at all for a maximum of 6 months. The loss of earnings incurring is in part compensated by so-called short time working benefits paid by the Federal Employment Agency. The short time working benefits are paid to the employee via the employer.

Depending on the family status, an employee receives 60 to 70% of the last net salary for the period of non-employment and pro rata for the periods of employment. Health, nursing care, annuity and accident insurance are paid further. For the periods, where the employee actually works, he has to pay the national insurance contributions pro rata. The period of 6 months can be extended to 24 months under certain circumstances. If it is granted for more than 6 months, then the Federal Employment Agency can place the employees affected at other companies.

The maximum period of receiving short workers money, under those circumstances, is equal for all employees. When there is a break of 1 or 2 months, during which the employee does not receive short workers money, the maximum period is extended accordingly. In case of breaks of 3 or more months, the period will start anew.

To apply for working short time, the following conditions must be given:

• The possibility of working short time has been regulated in the labour agreement, in a company agreement or in the contract of employment
• The employee organisation must agree to work short time
• Working short time is reasonable for the employees: it is a temporary and unavoidable stoppage, in which more than 10% of the working hours for at least a third of the employees are cut over a period of at least 4 weeks
• The working short time is caused by economic necessities or inevitable events
• The reducing of working hours is temporary as well as necessary
• The reducing of working hours is reported in written to the labour agency. Along with the application for short workers money, there has to be sent a statement by the works council

Temporary changes in short work conditions through economically motivated complementary acts of “Konjunkturpaket I and II”:

• The requirement that at least 1/3 of the staff works in short working hours, is dropped for the period from Feb 1 2009 to Nov 31 2010
• Short workers money is only paid if more than 10 % of the pre-tax wage is lost through short working hours
• The maximum duration of being paid short workers money is now 24 months, not 6 months, given that the entitlement has been created until Dec 31 2009
• Performed over-hours do not have to be compensated for in advance of the start of the short working hours
• If there are agreements on employment security, those will not affect the granting of short workers money
• 50 % of the social insurance contributions are refunded. For employees who participate in educational programmes during the time they work in short working hours, the costs of those are refunded 100 %
• Short workers money is also granted for leased labourers and fixed-term employees

Another way of intercepting fluctuations in workload consists in the flexibilisation of working hours and setting up working hour accounts. In order to prevent seasonal unemployment like in the building industry in the winter, the seasonal short working time benefit was created.

Tips, Checklist

• Since the short workers money regulation has been extended to apply through 2010, you should apply for short workers money before the end of 2009; then the maximum period will be 24 months. If you apply in 2010 the maximum period will only be 18 months
• As an employee, you do not have to do anything for the application for short workers money. You are paid your remuneration as usual by the employer. Just during short work, the remuneration will be lower accordingly
• If you are ordered to report unempoyed to the labour ageny, you do not have to do that
• If you get placed into a temporary reasonably imposable employment, during the time of short work, you should accept this. Otherwise, you risk that your short workers money is suspended for 3 weeks (suspension period). The income from your second employment is subtracted from your short workers money
• Mind that the short workers money is taxed. So, save some money in order to be able to pay tax-deductions in retrospect

Last update: 04/19/2010