Germany extends short-time working benefits

In Germany short-time working has been a key element in the federal government’s response to the recession. It enables employers to avoid redundancies by placing employees on reduced hours for a set period of time.

In such circumstances employees are entitled to receive short-time working benefits from the government to compensate for reduced earnings. The benefits are paid via their employers.

Use of the benefit scheme has risen massively over the past year. According to the Federal Employment Office there are between 1.3 million and 1.5 million employees working reduced hours.

In January 2009 over 10,000 employers applied for public short-time working benefits in respect of 290,600 employees, citing economic reasons. This represented an increase of 274,000 claimants on last year.

In response to these figures the German government has decided to increase the period of entitlement to short-time working benefits from 18 to 24 months.

German unemployment levels went up for the sixth month in April 2009, rising to 8.3% according to Federal statistics.

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