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Coronavirus relief

Measures against the economic effects of the Corona crisis

(Information as of 24 March, 2020)

The Coronavirus pandemic is taking a toll on public life and causes grave economic consequences worldwide. Businesses across the globe face a fight for survival and a great number of jobs is in danger. German authorities have in the last few days launched various efforts to relieve businesses of the consequences of the covid-19 crisis.

We have prepared some detailed information regarding the effects of Corona on remunerations and a brief overview regarding German short time work unemployment benefit. Please find the information below.

KBHT will be pleased to support you in the legal preparation of the necessary documents, take over the communication with the appropriate institutions and submit the applications. Please feel free to contact us on this matter.


Melina Mavridou

Tax Consultant

Location Düsseldorf / Neuss
+49 (0) 2131 / 9243 - 61

Bastian Berthold

Tax Consultant

Location Düsseldorf / Neuss
+49 (0) 2131 / 9243 - 36

Michael Kalus

Auditor, Tax Consultant

Location Düsseldorf / Neuss
+49 (0) 2131 / 9243 - 10

Dr. Martin Heyes

Tax Consultant

Location Düsseldorf / Neuss
+49 (0) 2131 / 92 43 - 38

Effects of Coronavirus on Remuneration - Information for Employers (March 2020)

  • The employee suffering from the coronavirus is entitled to continued remuneration in the case of illness for a period of six weeks [Section 3 EFZG (Continued Payment of Remuneration Act)]. After this period, people with statutory health insurance are entitled to sickness benefit.
  • If quarantine is ordered at the same time, the claim for continued remuneration competes with the claim for compensation under Section 56 InfSchG (Infection Protection Act). Here, the employer makes advance payments in the form of continued remuneration and can submit an application for reimbursement of the amounts paid out to the Landschaftsverband (Regional Council) (in NRW Landschaftsverband Rheinland or Westfalen-Lippe). The application must be submitted within 3 months after cessation of work or after the end of quarantine. You will find a sample application form from the Rhineland Regional Council in the appendix.
  • The health authority can ask the affected person to provide a list of contacts (people with whom they have had contact). The health authority may order that these contacts remain in quarantine. The health authority will also decide whether contacts should be tested.
  • Contacts in quarantine are entitled to claim compensation equal to the loss of earnings. For employees this is provided by the employer for a maximum of 6 weeks. The employer can have this compensation payment reimbursed by the Landschaftsverband (Regional Council) under Section 56 IfSG (Infection Protection Act). The application must be submitted within 3 months after cessation of work or after the end of quarantine.
  • From week 7 onwards, the employee applies for compensation to the Landschaftsverband himself and receives it directly from this office. The compensation from the 7th week corresponds to the amount of statutory sickness benefit under Section 47 (1) SGB V (German Social Code V).
  • The employer can demand an advance payment for remuneration from the Landschaftsverband (Section 56 (12) IfSG).
  • The employee should be sent home.
  • Employers outside the healthcare and food sectors cannot order employees to undergo medical treatment, including a test.
  • In this case, regular remuneration is initially to be continued. If quarantine is ordered and/or the suspicion is confirmed, the employer can submit an application for reimbursement to the Landschaftsverband.
  • Healthy employees continue to work as usual. If employers release healthy employees, they are obliged to pay these employees a default salary because they will not accept the offered performance of work by the employees.
  • It can be mutually agreed that working from home is appropriate. In this case, only the location of the provision of services changes and all other obligations remain unchanged.
  • The employee must arrange for the care of his child himself. He is still obliged to perform his work.
  • Employers must only release their employees if they or their young children are ill or quarantined.
  • For parents who work in indispensable functional areas - especially in the health sector - daycare centres and schools should offer childcare (up to grade 6).
  • No, because in this case the employees are absent without authorisation if there is no agreement with the employer to work from home, for example.
  • The unauthorised absence can be subject to a warning. In the case of recurrence, termination is also possible.
  • If, at the employee's request, the employer and employee mutually agree that the employee will be absent and will not work from home, the absence will be subject to the reduction of holiday entitlements or, if applicable, alternative time credits.
  • Employees are not entitled to work from home. If employees stay at home without agreement, this is a breach of their obligation to work. There is no entitlement to continued remuneration.
  • Conversely, employers may not unilaterally order work from home either.
  • Employers and employees should mutually agree on working from home.

In this case, short-time working must first be agreed with the employees (if necessary, enforced with change notices) and registered with the Employment Agency.

On March 16, 2020, the German federal government eased the conditions for receiving the short-time working allowance:

  • It is sufficient if 10 percent of a company's employees are affected by loss of working hours for a company to apply for short-time work. Otherwise, at least one third of the employees must be affected.
  • Social security contributions are fully reimbursed by the Federal Employment Agency in the event of short-time work.
  • The short-time working allowance is also possible for employees in temporary employment.
  • In companies where agreements on fluctuations in working hours are used, no negative working time accounts are created.

In addition, self-employed persons and entrepreneurs who are affected by a measure under the Infection Protection Act are entitled to compensation for ongoing uncovered business expenses under Section 56 (4) of the Infection Protection Act if their livelihood is threatened. Here too, the time limit of 3 months after completion of the measure applies.

A substantiation of the coordination and interlinking of measures to support entrepreneurs in the current situation can still be expected. We will keep you informed.

Further information can be found on the following pages, among others:

Federal Ministry of Labour and Social Affairs:

Robert Koch Institute:

Local health authorities:

Short Time Work Unemployment Benefit


Temporary reduction of normal working hours with a corresponding reduction in remuneration


  • The imposition of short-time working by the employer is only possible on a corresponding legal basis,
  • by law, a collective agreement, works agreement, employment contract or separate agreement with the employee,
  • the order of precedence of legal provisions must be considered: Reference is made to the applicable collective agreement. Otherwise, the order of precedence according to works agreements and separate agreements applies. If none of the contractual agreements exist, an individual agreement must be concluded with the employee. We will be pleased to provide you with the corresponding template.


  • Right of initiative: The works council can apply for the introduction of short-time working from the employer and, if necessary, force it through the conciliation committee.
  • Right of co-determination in the case of the early termination of short-time working by the employer.
  • No right of co-determination on remuneration issues: the works council is not entitled to make its approval of the introduction of shorttime working dependent on the granting of short time work unemployment benefit by the Employment Office.


  • Introduction of short-time working regardless of the right of co-determination.
  • However, the employer then has to conclude a corresponding individual employment agreement with each employee; if employees do not agree to this, dismissal with the option of altered conditions of employment must be issued – at least in theory. Please contact us in this case, as the legal implications have to be examined for each employee on an individual contract basis.


Employee's entitlement to compensation for loss of the claim to remuneration


Short time work unemployment benefit is granted if the conditions specified in Sections 95 to 99 of Book III of the German Social Code are satisfied.

economic causes

  • economic causes are all influences that arise directly or indirectly from the economic process and result in a change to the operational structure

unavoidable occurrences

  • unavoidable occurrences are exceptional circumstances in the working environment which are officially imposed on the one hand, and result from force majeure on the other

temporary nature

  • this is of a temporary nature when the transition from the actual state to the target state can be expected with a certain level of probability.
  • Such an occurrence includes, for example, delivery failures or plant closures due to protective measures imposed by the state.

operational preconditions (Section 97, Book III of the German Social Code)

  • Short time work unemployment benefit is only permitted in companies where there is at least one employee. Such failures can also affect only one department of a company, for example

personal requirements (Section 98, Book III of the German Social Code)

  • The employment is continued as employment which is subject to social insurance contributions after work stoppages
  • The employment relationship is not terminated or subject to a cancellation agreement

are fulfilled and

  • notification of the work stoppage is reported (Section 99 of Book III of the German Social Code)
  • in writing to the Employment Agency in whose district the company is located
  • plus a statement of the company representative on the work stoppage (loss of working hours). It remains to be seen to what extent the Employment Office needs information. For plant closures which are officially imposed it should be possible to reduce this to a minimum.
    Search for an administrative office via the Federal Employment Agency:
  • Signed notification sent by email or fax satisfies the legal requirements. Alternatively, it is possible to register on the Internet portal of the Federal Employment Agency and submit the application online.
  • Reference is made to the Federal Employment Agency application:
  • The application must be accompanied accordingly by the documents relating to the works agreement or the individual contractual agreements with the employee.
  • The ongoing application is made in the form of an application for benefit, which is usually prepared by us within the framework of the payroll accounting system. The application must then be forwarded to the Employment Agency responsible after it has been signed. The follow-up period for the current monthly application is 3 months. After that, the claim to short time work unemployment benefit expires without replacement.
  • The employee must use up his or her holiday entitlement (which is also based on overtime) before claiming short-time working. This can only be avoided if there is a complete annual holiday plan for each individual employee.
  • Priority must always be given to using up existing overtime or credit from the working time account. Using up working time credit can be demanded from the employee pursuant to Section 96 IV, Subsection 4, Sentence 2 of Book III of the German Social Code only in the following cases:
    o where it is contractually stipulated to be intended exclusively for the bridging of work stoppages outside bad weather periods (Section 101, Subsection 1) and does not exceed 50 hours,
    o where it is intended exclusively for the purposes specified in Section 7c, Subsection 1 of Book 4 (family care, parental leave, reduction of the working time on the basis of Section 8 or Section 9a of the Part-Time and Fixed-Term Contracts Act),
    o has been saved to avoid the availment of seasonal short-time working unemployment benefit and does not exceed 150 hours,
    o exceeds 10 per cent of the annual working time of an employee without overtime or
    o has existed unchanged for more than one year.
  • The company must show in a credible manner that the loss of working hours is unavoidable and cannot be prevented by working time arrangements that are permitted at the company
  • During the period covered by the short time work unemployment benefit, the company must make a sustained effort to reduce or bring to an end the work stoppage
  • The minimum requirements for determining a work stoppage are stipulated in Section 96, Subsection 1, Part 4 of Book III of the German Social Code. We will certainly have to support the client in verifying the loss of working hours.
  • The employment agency can demand that recipients of short time work unemployment benefit conclude other reasonable employment contracts. In the event that the employee refuses to do so without good reason, the provisions applicable to unemployment benefit shall apply (cf. unemployment benefit blocking period).
  • In the case of absence due to illness, only the reduced remuneration shall be payable.
  • In the case of absence due to a holiday, the full remuneration is to be paid without any reduction due to the short time work unemployment benefit.

Reference is made to the changes introduced by the Federal Government on March 12, 2020:

  • If orders are not received due to difficult economic developments, a company can apply for short-time working if at least 10 per cent of the employees have a loss of earnings of at least 10 per cent. This threshold has been the case up to now for 30 per cent of the workforce.
  • Temporary employees will also be able to draw short time work unemployment benefit in the future, to which they have an entitlement.
  • Social security contributions for lost working hours are reimbursed to the level of 100 per cent.
  • The regulation is currently limited to December 31, 2021.


Short time work unemployment benefit is paid at a company at the earliest from the calendar month in which the notification of the loss of work is received by the Federal Employment Agency (Section 99, Subsection 2 of Book III of the German Social Code).

If an application for short time work unemployment benefit therefore still to be submitted for the month of March, the notification of loss of working hours would have to be submitted to the agency responsible by March 31, 2020 at the latest. We will be pleased to support you in preparing this. Please contact us in good time.


  • Normally 12 months
  • In the case of exceptional circumstances on the overall labour market, the Federal Ministry of Economics and Labour may, by means of a statutory order, extend the period of entitlement to up to 24 months.
  • No such special regulation currently exists.
  • 60% to 87% of the net pay difference during the entitlement period based on length of short time work and family status
  • Net pay difference:
    The difference between the flat-rate net remuneration from target remuneration (what the employee would have earned without the loss of work, reduced by remuneration for overtime in the entitlement period) and the flat-rate net remuneration from the actual remuneration (the gross remuneration actually earned by the  employee in the entitlement period)

Example 1

Gross target remuneration: EUR 2,500.00
Gross actual remuneration: EUR 1,250.00
Income tax class: 3
Benefit class: 1

Calculation according to the flat-rate net remuneration as specified in the table of the Federal Employment Agency

Target - Calculated income EUR 1,295.11
Actual - Calculated income EUR 675.36
Short time work unemployment benefit EUR 619.75

Plus 100% reimbursement of the social security contributions if these are attributable to shorttime working.

Example 2

Gross actual remuneration: EUR 0.00

Target - Calculated income EUR 1,295.11
Actual - Calculated income EUR 0.00
Short time work unemployment benefit EUR 1,295.11

Plus 100% reimbursement of the social security contributions if these are attributable to shorttime


The contents of this website were created with due care. Information, especially in the current situation surrounding covid-19, may change by the hour. Therefore we cannot guarantee that the information provided is at all times current, correct or complete. All contents of this page are created solely for your information and due not pose as consultation. They do not replace individual consultation considering the particular circumstances of the individual case. The representation of information does not constitute any relationship pertaining to mandate and/or liability.