Government measures in key jurisdictions 5th edition - Flipbook - Page 54
Germany
Employment
What
financial support
is the government
providing to
businesses and to
individuals on
employment
issues?
Insolvency
•
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 short-time working allowance to
70% or 77% starting from the fourth month and to 80% or 87% starting from the
seventh 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 short-time
working allowance. Also, the additional income opportunities during short-time work
have been extended.
•
Coronavirus: FAQ Employment Law Part 3.
•
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.
•
Has the
government made
any changes
to insolvency
•
legislation?
54
The statutory obligation to file for insolvency within three weeks, after a state of
insolvency has been reached, has been suspended for certain companies until
30 April 2021. The legislature’s goal is to ensure that disadvantages are avoided
for creditors who generously granted deferrals during the Covid-19 pandemic.
The temporary suspension shall assist companies that have applied for
financial aid but have not received it yet. An application for financial aid must
have been filed between 1 November 2020 to 28 February 2021. In certain
cases, the suspension also applies to companies if the application for financial
aid has not been possible in the aforementioned period for legal or factual
reasons. In addition, the application must have some prospect for success and
the financial aid must be suitable for eliminating insolvency. Also, insolvency
proceedings may not have been initiated up to 31 January 2021.
•
Payments made by the debtor under the above conditions shall be deemed not
to be detrimental to creditors.
•
Suspension of the obligation to file for insolvency until the end of April 2021 if
government aid is requested until the end of February 2021; protection against
contestation in the event of deferrals.
Government measures in key jurisdictions
