The federal government is extending the current special provisions on short-time work through the end of 2021. The Bundestag passed the corresponding law this Friday.
The extension is a key component in overcoming the COVID-19 crisis and securing employment. The new law also extends the increase in short-time work benefits to up to 87 percent.
The law also incorporates ideas from IG Metall regarding continuing education. Background: Alongside the COVID-19 crisis, German industry is undergoing a massive transformation. This is most evident in the automotive industry. For workers, this means that new skills are in demand.
“With this law, the federal government is tackling two crucial tasks: securing jobs and providing training,” says Jörg Hofmann, President of IG Metall. “Employees can complete continuing education courses while on short-time work. There’s no better way to use this time.” IG Metall has been advocating for years to create new training opportunities and expand existing ones.
Here’s what the new law offers:
If companies combine short-time work with continuing education, they receive financial support. Specifically: The Employment Agency covers half of the social security contributions for the affected employees if they:
- complete a certified training program of at least 120 hours conducted by a certified provider
- participate in a training program eligible for funding under the“Aufstiegs-BAföG”(formerly: “Meister-BAföG”). These include, for example, training programs to become a technician, a master craftsman, or a business administrator.
The Employment Agency also supports certain training programs with grants toward course fees.
Better protection against unemployment:
In addition to continuing education, the new law also improves unemployment protection in cases where a collective employment security agreement is in place.
Background: Unemployment benefits are generally based on earnings from the last twelve months prior to becoming unemployed. However, due to the crisis, many companies currently have employment security agreements in place. Under these agreements, employees work reduced hours, which often results in lower earnings. If a job is lost, unemployment benefits would consequently be lower.
The federal government is addressing this issue: Where employment protection agreements are in place, the calculation of unemployment benefits will be based on the earnings the employees would have received without such an agreement. This applies to periods of employment protection between March 1, 2020, and December 31, 2022.
No reduction in parental benefits:
Finally, there is some good news for parents: Those who go on parental leave after short-time work will continue to receive parental benefits at the same rate they would have received without short-time work. The federal government is extending this existing provision through the end of 2021.
Like unemployment benefits, parental benefits are based on previous earnings. After short-time work, they would therefore be correspondingly lower. IG Metall is calling for the provision that is more favorable to parents to be made permanent—regardless of the COVID-19 crisis.
