COVID-19 Updates - Germany

Information is continuing to emerge on COVID-19 and the resulting legislative changes being instituted in Germany. We have compiled a list of important updates for German employers to be aware of. Our teams are closely monitoring the situation and will continue to provide the latest updates to keep you informed.

ger4

Last Updated – March 23, 2020

 

Financial Support

To combat the challenges caused by COVID-19, the German government have sanctioned a comprehensive package of measures to support the country’s businesses and employees. This package includes a € 400 billion state fund that will be used to provide aid to employers and to stabilize businesses hit particularly hard by the crisis. The public loan program has been expanded. Permissible fund requests have been increased and conditions to apply have become less stringent, allowing employers to access liquidity-enhancing loans.

Employers of small businesses have access to short-term liquidity support in the form of one-time, non-refundable financial aids. The amount the employer receives is dependent on their employee count. The maximum amount an employer ca receive is € 15,000.

Employers can expect further measures to be implemented in addition to what has already been established. The German government has indicated intent to provide the following:

  • Short-time work compensation for employees
  • Tax support measures, including deferral of tax payments and social security contributions
  • Deferral of consumer loan obligations and contractual relationships for small businesses until June 30th, 2020
  • Protection for tenants

 

Paid/Unpaid Leave

Employers have the option to place an employee on unpaid vacation if that employee cites personal limitations for attending work, excluding illness resulting from COVID-19.

Employees tending to family members affected by COVID-19 are entitled to five days of paid leave in the case of a close relative and between 10 and 20 days per child younger than 12.

Employers are not required to pay employees who are in self-quarantine. All employee requests to work from home must be discussed and agreed upon by both the employer and the employee.

Employers are obligated to continue to pay employee salaries, but can claim reimbursements from the German government. Reimbursement applications must be submitted within three months of the employee sick leave.

 

Short-Time Work

Employers can reduce employee working hours to avoid dismissals. Prior to reducing employee time-worked, the employer must notify the employment agency in writing or electronically. Employer must provide details on the change in hours and offer a credible explanations for the change. Employees that have had their hours cut are entitled to a short-time working allowance during the period of short-time work.

Employees can expect to receive 60-67% of the net difference in remuneration from the short-time working allowance. Short-time work compensation is currently granted for a maximum of 12 months. There are current discussions to increase the amount of the compensation due to the COVID-19.