Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 43
Germany
2
3
Employment
•
What financial
support is the
government
providing to
businesses and
to individuals
on employment
issues?
Employers may choose to temporarily reduce the working time of their employees
if the company is affected by the corona crisis (e.g. if a company is closed down
or if there are difficulties in the company due to missing orders or supplies). The
remuneration of the employees will be reduced correspondingly. This measure shall
avoid layoffs and enable companies to keep qualified workers during the crisis.
•
Affected employees can receive so-called “short-time working allowance”. This
benefit must be applied for by the employer. If granted, the government will
generally refund 60% (employees without children) or 67% (employees with
children) of the difference between the regular net income and the reduced net
income. The German government has introduced legislation to increase the shorttime working allowance to 70% or 77% starting from the fourth month and to 80% or
87% starting from the eight month. Due to new legislation, it is sufficient if at least
10% of the workforce are affected by short-time work.
•
FAQ short-time work by Corona
•
The German government has passed legislation to facilitate access to the shorttime working allowance. Also, the additional income opportunities during shorttime work have been extended.
•
Coronavirus: FAQ employment law part 3
•
The base period of unemployment pay will be extended by three months for those
whose entitlement ends between 1 May and 31 December 2020.
•
In case the government orders a (regional) quarantine, the employer pays the
regular salary and the regional government will refund the money. After six weeks,
the employees will receive sick pay by the government.
•
Coronavirus: FAQ employment law
•
The statutory obligation to file for insolvency within three weeks after a state of
insolvency has been reached has been suspended until 30 September 2020.
Insolvency
Has the
government made •
any changes
to insolvency
legislation?
However, this does not apply if the insolvency is not a consequence of the COVID-19
pandemic or if there are no prospects of remedying an existing inability to pay.
If companies were not insolvent on 31 December 2019, it is legally assumed that
insolvency is based on the consequences of the COVID-19 pandemic and that there
are prospects of eliminating an existing insolvency.
•
Companies’ own applications for the opening of insolvency proceedings and
applications by creditors (third-party applications) nevertheless remain possible. In
the case of third-party applications, however, the opening of insolvency proceedings
requires that the reason for insolvency already existed on 1 March 2020.
•
If the obligation to file for insolvency is suspended, companies may continue to make
payments in the ordinary course of business although a state of insolvency is reached.
•
Restructuring in times of Corona – legislator assists with suspending the obligation to
file for insolvency
Government measures in key jurisdictions
43