German government extends Covid-19 pay scheme

German government extends short-term allowance scheme

The German government has extended its short-term allowance scheme until the end of 2021 to further support employees during the Covid-19 (Coronavirus) pandemic.

The wage scheme, known as ‘short-time work’ or ‘Kurzarbeit’ in German, set to end at the end of March 2021, however, due to the ongoing spike of Coronavirus cases in Germany, the decision was made to extend it.

As part of the short-term work scheme, employees are able to work shorter periods of time, with the government topping up their wages, meaning that more staff can stay employed on the payroll, working for fewer hours. Under the scheme, these employees will receive 60% of their net wages from the government during the first three months, 70% in their fourth month and 80% in their seventh month. Furthermore, employees with at least one child receive an additional 7% per month.

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Frank Werneke, chairman at the United Service Union (ver.di), said: “This gives companies and employees planning security. For many employees, it is particularly important that the increase to 80 or 87% is maintained. This is existential, especially for those affected from the service sectors, some of which are paid lower wages. The breakthrough in short-time allowance is a complete success for the joint petition by ver.di and NGG.”

“This will be particularly important with a view to areas such as tourism and air traffic,” said Werneke.