Lockdown measures were implemented in Germany over two months ago to help contain the spread of Coronavirus, and although Germany is starting to slowly ease restrictions, many Germans will still find themselves out of work for months to come. However, Germany is hoping that a scheme used in the 2008 financial crisis, known as Kurzarbeit, will keep labour markets intact.
What is Kurzarbeit?
Companies that find their workload reduced because of Covid-19, can apply for the government to subsidise workers salaries, while working hours are reduced or put on hold. It typically covers 60% of loss net wages, rising to 67% for those with children. Previously the proportions of workers affected from one company was one third, however this has been reduced to 10 percent during the coronavirus crisis. Many household-name companies have announced that tens of thousands of employees will be affected. Car giant Volkswagen has applied to cover 80,000, while BMW reported 20,000 and components maker Continental 30,000.
Companies are still responsible for paying workers and must apply to get reimbursed by the state. The German government has expanded the program to include contract workers and cover social insurance contributions. The government is also allowing people who are receiving the wage support to take up additional work in “systemically relevant” occupations without any financial disadvantage.
Is the program popular?
Although not everyone thinks it is perfect, Germany’s program has received frequent praise. It kept about half a million people employed during the global financial crisis in 2009. Germany’s labour minister said it will save millions of jobs this time around.
A record 470,000 companies applied for Kurzarbeit in March, suggesting that around 9 million employees, or 20% of the German workforce, are affected by the program so far. Compare that to 2019, when an average of 1,300 companies applied for support each month.
How can you apply for Kurzarbeit?
In order to apply for Kurzarbeit you need to fill out The Anzeige über Arbeitsausfall (Display of Lost Work) form. The official form is available here and you can also find the form itself translated line by line into English here.
After filling out the form, your employer must sign at the end under the agreement that everything written is correct and complete. A signature from the company’s works’ council is also requested, or you can alternatively attach a separate statement.