Sharp growth in number of reported short-time working arrangements

Plans to reduce working hours reported by more and more companies

09 Apr 2020 | Press Release No. 22

Special evaluation published by Federal Employment Agency (BA)

Around 650,000 companies have reported their plans to reduce working hours to Agentur für Arbeit branches as of 6 April 2020. The number of companies with short-time working arrangements has risen again by almost 40% over the past week. Around 470,000 companies had reported short-time working arrangements as a result of the corona crisis by 27 March 2020.

The BA cannot yet determine how many employees have been affected by short-time working arrangements based on the available data. However, we expect the number of employees to be much higher than in the economic crash, when 1.4 million people had reduced working hours at the peak of the crisis.

The reports are being sent from almost all industries, but retailers, hotels and catering companies are some of the most heavily affected.

This data is based on special evaluations conducted by the BA and does not represent the official statistics.

“We’ll only be able to say how many companies have actually reduced their employees’ working hours – and by how much – when the BA settles the short-time working allowance paid out by employers. Most of the payroll lists will only be submitted by employers over the coming weeks. At the moment, almost all our efforts are going into advising companies with reduced working hours, efficiently processing reports and settling short-time working allowance as quickly as possible. We’re continuing to reinforce our teams”, explains Detlef Scheele, Chairman of the BA.

Almost 8,000 BA employees are now processing reported reductions in working hours and paying out short-time working allowance – ten times as many as usual

“There is currently a political debate as to whether short-time working allowance should be increased or extended. It’s really important to note that the BA will only be able to cope with the rise in reports if the process remains as unbureaucratic as it is now. We can’t afford to overcomplicate things”, stresses Scheele.

 

Short-time work prevents unemployment – but it is not quick liquidity support

Scheele pointed out once again that short-time working allowance is currently the best way to prevent unemployment. “If you also need quick liquidity support, you should take advantage of the wide range of measures contained in the government’s welfare package, such as grants and loans”.

Companies must always report short-time working arrangements – even if working hours are ultimately not reduced

Companies are only entitled to short-time working allowance if they have reported their short-time working arrangements. This is how they signal their intention to reduce their employees’ working hours.

Companies do not always end up reducing their working hours. For example, if they start to get more orders or official restrictions are lifted, they might be able to resume their normal operations. In such cases, short-time working arrangements will have been reported without a final reduction in working hours.

Whenever a company reduces its employees’ working hours for a month, it pays them for their work and supplements their reduced wage with a short-time working allowance. It then provides the Agentur für Arbeit with a payroll list with the names of all employees on reduced working hours and the specific reduction for each employee. It has three months to do this by law. Once the documents have been received, they are checked and the short-time working allowance is paid out to the company.

The BA is now asking employers to make greater use of its online services. Employers can report short-time working arrangements and apply for short-time working allowance online – it’s quick, safe and flexible.

Employers and employees can also find more information on short-time working arrangements and the relaxed regulations on the BA website (www.arbeitsagentur.de).