March 25, 2020 SPECIAL COVID-19 ISSUE

GERMANY - Report

By: André Zimmermann and Louisa Kallhoff, Orrick, Herrington & Sutcliffe LLP, Düsseldorf

While particular workplace laws have not been altered yet in Germany, the German Federal Ministry of Labour and Social Affairs made an urgent appeal to employers, asking them to find “pragmatic, unbureaucratic, and consensual solutions” together with their employees that will not lead to a loss of salary. Employers are encouraged to make use of home office solutions or flexible working time arrangements to cope with the current situation. To financially support freelancers and micro-companies in the corona crisis with direct grants and loans, the German government is planning quickly to put into effect an aid package of up to 50 billion euros.

Furthermore, the German parliament has amended and facilitated the requirements for receiving short-time work allowance, giving companies easier access to state-funded short-time work allowance (Kurzarbeitergeld) amid the crisis caused by the coronavirus outbreak. Short-time work is the temporary reduction in working time in order to reduce the wage costs for an employer, i.e. employees will work less – even up to zero – for a temporary period and receive less remuneration during that time. As compensation for this loss, employees may receive a short-time work allowance by the Federal Employment Agency (Bundesagentur für Arbeit). To access short-time work allowances, more than 10% of the employees employed in the operation or department must be affected by the loss of working hours of more than 10% of their salary in the respective calendar month – before the change in the law, the quorum was one third of employees. In addition, the Federal Employment Agency will now reimburse the employer for all social security contributions and allow short-time work for temporary agency workers (Leiharbeitnehmer).

André Zimmermann

Orrick, Herrington & Sutcliffe LLP, Düsseldorf

Louisa Kallhoff

Orrick, Herrington & Sutcliffe LLP, Düsseldorf