More than half a million businesses in Germany have implemented short-time work (Kurzarbeit). The temporary reduction of the regular working time allows companies to reduce their personnel costs while at the same time maintaining their workforce and avoiding layoffs. The gap in remuneration that the employees suffer is partially compensated by the Federal Employment Agency (Bundesagentur für Arbeit), which pays 60% (or 67% for employees with children) of the net loss in remuneration (up to certain salary levels) that results from the reduction of working hours. Now that short-time work has been implemented, employers are faced with a number of practical questions relating to the day-to-day management of short-time work and the financial impact certain circumstances might have.

This update provides a brief overview of practicable issues employers have to handle during periods of short-time work. Read the full update on mayerbrown.com.