Definition
Germany's short-time work scheme that allows employers to temporarily reduce employees' working hours during economic downturns while the Federal Employment Agency (Bundesagentur für Arbeit) pays a short-time work allowance to compensate workers for lost earnings.
UK Context
Best Practices
- Assess whether the conditions for Kurzarbeit are met — temporary, unavoidable work loss affecting the required proportion of the workforce
- Obtain Betriebsrat consent before implementing Kurzarbeit and agree on the specific reduction arrangements
- File the Anzeige (notification) with the local Agentur für Arbeit promptly and apply for Kurzarbeitergeld for each payroll period
- Use the period of reduced hours to invest in employee training and development, taking advantage of BA training subsidies
- Maintain accurate records of actual hours worked and reduced hours for each affected employee
Frequently Asked Questions
How much does an employee receive during Kurzarbeit?
The standard Kurzarbeitergeld is 60 per cent of the net pay difference between the employee's normal salary and the salary for the reduced hours actually worked (67 per cent for employees with at least one child). During crises, the government may temporarily increase these rates. The employer continues to pay for the hours actually worked at the normal rate.
Can an employee refuse Kurzarbeit?
If a Betriebsrat exists and has agreed to Kurzarbeit, it applies to all affected employees. Without a works council, each employee must individually consent unless the employment contract or an applicable collective agreement contains a Kurzarbeit clause. An employee's unreasonable refusal could in theory justify dismissal, but this is legally complex.
Does the employer pay social security contributions during Kurzarbeit?
The employer continues to pay social security contributions on the reduced hours actually worked. For the lost hours compensated by Kurzarbeitergeld, the employer pays social security contributions on 80 per cent of the notional gross salary for those hours. During the pandemic, the government temporarily reimbursed these contributions to reduce employer costs.