German gov’t to extend short-time work program until end of 2021

– The German government’s short-time work program, already receiving additional funding because of COVID-19, would be extended until the end of 2021, the Ministry of Labor and Social Affairs (BMAS) announced on Wednesday.

“Short-time work is our model for success, which we use to secure the livelihoods of millions of employees and their families. We will continue to follow this path,” said Labor and Social Affairs Minister Hubertus Heil.

Short-time work in Germany is a social insurance program that was heavily used as crisis management tool during the COVID-19 crisis. It allows employers to reduce working hours instead of cutting staff, and employees received most of the payment for lost hours from the government.

The extended package includes simplified access conditions to short-time work compensation, the increase of the short-time work allowance as well as the opening up of short-time work benefits for temporary workers until the end of next year, according to BMAS.

Heil said that with further training and qualification, German companies could better face the challenges of structural change.

“We therefore create incentives to use the time of short-time work and invest in further training. In this way, short-time work not only becomes a bridge over a deep economic valley, but also a way into the future,” he added.

The number of short-time workers in Germany fell from 5.6 million in July to 4.6 million in August after hitting an all-time high of 7.3 million in May, according to a company survey by the ifo Institute.