Labor market: Short-time work should continue to be more easily accessible

The easier access conditions for short-time work are to be extended until December 31, 2022.

Labor market: Short-time work should continue to be more easily accessible

The easier access conditions for short-time work are to be extended until December 31, 2022. This is provided for in a draft regulation by the Federal Ministry of Labor that is available to the German Press Agency in Berlin. Easier access is currently limited until September 30th.

"Further developments in the coming weeks and months are associated with great imponderables," states the draft, referring to the ongoing corona pandemic and the gas supply. "The business expectations of companies for the next few months are already extremely pessimistic." The companies would need further support in using short-time work "in order to be able to avoid layoffs as far as possible".

It should now be ensured that employment can be stabilized in this way beyond September 30, according to the draft. Another draft, which is also available to the dpa, is to extend the power to issue ordinances for reduced short-time work benefits until mid-2024. With further regulations, the Ministry of Labor should be able to further extend the relief.

Minister of Labor sees further risks

With the now planned extension step, it should now go further for companies if at least 10 percent of their employees are affected by the loss of work. Before Corona it was usually at least a third. To avoid short-time work, employees should still not have to build up any negative hours before receiving short-time work benefits. "With the extension, the affected companies will be given planning security until the end of the fourth quarter of 2022 in what remains a difficult environment," says the draft.

In the labor department, 100,000 additional employees are expected to be on short-time work every month from October to December 2022. The additional expenditure for the Federal Employment Agency is estimated at 140 million euros.

Federal Labor Minister Hubertus Heil (SPD) announced the extension last week. The number of employees affected by short-time work has recently fallen sharply from up to around 6 million at the peak of the corona pandemic. But the risks, such as inflation, high energy prices and stagnant supply chains are great. In winter there could be a "recessionary situation" - i.e. a shrinking economic output.

At the moment the energy crisis has hardly any impact on the labor market. The number of notifications of short-time work is one of the first indicators of problems in companies. It was only 36,000 in August. Short-time work was actually being used by 259,000 people in Germany in June.

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