Current legal developments to protect employers and employees in the coronavirus pandemic

In the past few weeks, further prerequisites for the protection and safeguarding of employers and employees in the coronavirus pandemic were created at federal level. In the following we summarize the current developments for you:

1.Regulation on Facilitation of Short-time Work (KugV)

With the Regulation on Facilitation of Short-time Work (Kurarbeitergeldverordnung – KugV) of 25 March 2020, the Federal Government has created a legal basis in summary proceedings to support the economy and labour market in times of the coronavirus pandemic.

With retroactive effect from March 1, 2020, access to short-time work allowance was facilitated as expected (see our FAQ on short-time working; On the basis of this, the Federal Employment Agency published a new directive (202003015) on 30 March, 2020.

Accordingly, short-time work allowance is now to be granted temporarily for the period until 31 December, 2020 under the following facilitated conditions:

1.1     Reduction of the threshold value

According to the new legal situation, only at least 10% of the employees employed in the company must be affected by a loss of earnings of more than 10% of their monthly gross salary in the respective calendar month (entitlement period).

Previously, at least one third of the workers employed in the company had to be affected by the loss of earnings.

1.2     Working time credits

In order to avoid short-time work, it is no longer necessary to primarily build up negative working time balances on a working time account.

In addition, the Federal Employment Agency will refrain until 31 December, 2020 from demanding to take vacation from the current vacation year to avoid short-time work. However, unplanned vacation entitlements from previous years must still be taken primarily. However, the employee’s vacation wishes may not conflict with this.

1.3     Broadening the circle of eligible persons

The group of persons entitled to benefits now also includes temporary workers.

1.4     Social security contributions

The social security contributions for loss of working hours to be borne by the employer under the former legal situation will now be fully reimbursed by the Federal Employment Agency for the period 01 March, 2020 to 31 December, 2020.

2. Social protection package

Furthermore, the Bundestag, with the approval of the Bundesrat, passed the law on 27 March, 2020 to facilitate access to social security and the deployment and protection of social service providers on the basis of the coronavirus SARS-CoV-2 (social protection package). The social protection package provides, among other things, for extensive facilitation of access to social security.

The new regulations essentially concern the following points:

2.1     Facilitating access to basic social security systems

In particular, small businesses and the so-called solo self-employed are to be given easier access to the basic security systems. Accordingly, the following facilitations apply in the period from 01 March, 2020 to 30 June, 2020:

  • temporary suspension of the recognition of assets
  • temporary recognition of the actual expenses for accommodation and heating as reasonable and
  • facilitation in the consideration of income in cases of a provisional decision

2.2     Authorisation in the Working Time Act

The Federal Ministry of Labour and Social Affairs may, in agreement with the Federal Ministry of Health, temporarily permit exceptions to the public-law provisions on working time in exceptional emergencies with nationwide implications – particularly in the event of an epidemic situation of national importance – provided that the activity in question is of systemic importance.

This is intended to ensure the maintenance of public safety and order as well as the supply of the population in the health sector and with existential goods even in times of crisis.

2.3     Right to compensation for childcare

Employed custodians of children under 12 years of age are entitled to compensation in the event of the closure of schools and other childcare facilities by the authorities. This is subject in particular to the condition that there is no other possibility of care and that the employed person with custody suffers a loss of earnings as a result (see our article on this subject entitled “Law for the protection of the population in the event of an epidemic situation of national importance”; (

We will of course keep you informed about further changes in the legal situation!

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