Coronavirus – Kurzarbeitergeld in Germany

Retention as opposed to termination

The Coronavirus outbreak continues to progress rapidly throughout Europe and the wider world, placing a huge strain on businesses large and small. Such is the financial strain caused by the fall in income, many companies are unfortunately resorting to the termination of employees in an attempt to try and mitigate costs (check our article on an expat’s rights concerning a coronavirus-based termination here). To dissuade companies from terminating employees, the German government has moved to relax the application criteria and process for a Short-time working allowance (Kurzarbeitergeld).

What is a Short-time allowance (Kurzarbeitergeld) and am I eligible?

The Short-term allowance is a mechanism whereby the state covers a certain percentage (normally 60% or 67%, depending on family status, but this has recently been temporarily amended due to the impact of the Coronavirus. Please see the new level of benefits here) of the employee’s wage, should the employer temporarily reduce their working hours, even to the point of zero hours per week. This allowance is designed to prevent dismissals. The employee is retained by the company but paid temporarily by the state (technically the government refunds the employer for the remuneration payments to the employee) until such time that the business has recovered to the point where it can take back over the responsibility for the employee’s remuneration. Essentially, the government will assist with the payroll until the storm has been weathered.

The German government is using this already established mechanism as a way to mitigate the devastating financial effects of the Coronavirus pandemic. To this end, eligibility has been temporarily relaxed until the end of 2021, with the current main conditions being as follows:

  • The employee agrees to be sent on Short-term work (Kurzarbeit); this agreement should be either in the employment contract or in a collective agreement (Betriebsvereinbarung); an individual agreement in the light of the current crisis is also possible.
  • The cut in hours applies to 10% of the company employees (previously 33%), with the employees seeing at least a 10% reduction in their overall gross wage.
  • The employee remains part of the company and is not made redundant.
  • The cut in working hours is temporary.
  • The employer (in agreement with their relevant employee representative body, in most cases the local Works Council (Betriebsrat), if applicable) has registered their intent and reasoning for cutting the hours of the employees with the Agentur für Arbeit.

This list is by no means exhaustive and, as ever, a great deal will depend on individual circumstances. Should you require clarification on your rights and options in this regard, please do not hesitate to get in touch using the contact details below.

III. Residence regulations for (employed) skilled workers from third countries

1. Skilled workers (professionals) with completed training (vocational training or studies)

Pursuant to § 18a or § 18b(1) of the Residence Act, a residence permit may be issued to a skilled worker for the purpose of pursuing a qualified occupation for which the qualification they have acquired qualifies them. The requirements for the visa or residence permit are:

  • There is a concrete job offer.
  • Approval for employment has been granted by the Federal Employment Agency (Bundesagentur für Arbeit) in accordance with § 39 (2) of the Residence Act.
  • In the case of an educational qualification from abroad, the equivalence of vocational training or the comparability of the foreign university qualification must have been established. As a rule, this must be proven by a certificate of recognition issued by the competent recognition authority in Germany.
  • If a licence to practise a profession is required (in the case of regulated professions), it must be available or promised at the time of application.
  • For persons over 45 years of age, proof must be provided of an adequate retirement pension or a gross salary of at least 55% of the annual contribution ceiling in the general pension scheme must be paid.

The residence permit for skilled workers in accordance with § 18a or 18b of the Residence Act is issued for a period of four years. If the employment relationship is limited to a shorter period, the residence permit is issued for that period. If the conditions for issuance continue to be met, the residence permit can be extended or a permanent residence permit may be issued.

2. The EU Blue Card for Academic Professionals

The EU Blue Card pursuant to § 18b (2) of the Residence Act applies exclusively to skilled workers with a university degree recognised as equivalent or a German university degree. To obtain an EU Blue Card, the following requirements must be met:

  • There is a concrete job offer for employment that is appropriate to the qualification.
  • If a license to practise a profession is required (in the case of the regulated professions), this must be available or promised at the time of application.
  •  Annual gross salary amounting to at least two-thirds of the annual contribution ceiling in the general pension insurance scheme.
  • For employment in certain occupational groups, the required salary limit is lower in the general pension scheme, at least 52% of the annual contribution ceiling. This applies, for example, to medical professionals, specialists in engineering, natural science and mathematics, and IT. In such cases, unlike in the general case, the approval of the Federal Employment Agency is required

In principle, the EU Blue Card is issued for a maximum of four years. If the conditions for issuance continue to be met, the EU Blue Card can be extended. If the duration of the employment relationship is less than four years, it shall be issued for the duration of the employment contract plus three months.

3. Special case: IT specialists with practical professional knowledge from third countries

There is a special rule for the recruitment of foreign IT specialists, according to which applicants from third countries receive the approval for employment by the Federal Employment Agency in the IT sector, without the need for formal recognition of their qualifications by a competent recognition body in Germany (§ 19 (2) in conjunction with § 6 of the Employment Regulation (BeschV)).

The following requirements must be met:

  •  The applicant can demonstrate at least three years of professional experience in the IT sector within the last seven years, which corresponds to the qualification level of an academic specialist.
  •  The applicant should demonstrate the appropriate qualification by successfully participating in theoretical training or relevant IT examinations.
  •  The gross annual salary must be at least 60% of the annual contribution ceiling in the general pension insurance scheme.
  •  The applicant has at least B1 level of German knowledge based on the CEFR (Common European Framework of Reference for Languages). In individual cases, proof of German language skills may be waived, e.g. if it is not absolutely necessary for the potential job.
4. International students and graduates of German universities as potential for skilled workers

After successfully completing a degree in Germany, university graduates from third countries are allowed to stay in Germany in order to look for qualified employment. They are granted a residence permit for up to 18 months to look for a job in Germany (§ 20 para. 3 No. 1 Residence Act).

In addition, international students from third countries may obtain a residence permit for another purpose during or even before graduation in Germany, in accordance with § 16b (4) of the Residence Act:

  • Taking up employment as a skilled worker (§ 18a; 18b of the Residence Act) or on the basis distinct practical professional knowledge (§ 19c Para. 2 of the Residence Act): Students may be sufficiently qualified to take up a qualified job without completing their domestic studies on the basis of previously acquired degrees or with the knowledge and skills acquired so far. In such cases, the purpose of residence may be changed if there is a concrete job offer. Upon application, the skilled worker will be granted a residence permit to pursue qualified employment.
  • Admission of qualified vocational training (§ 16a of the Residence Act): This enables foreign students to switch to dual vocational training, e.g. if there is an offer of a training place, the corresponding residence permit can be issued upon application.

V. Conclusion

If you are planning on pursuing self-employment in Germany and do not want to go through the application procedure for the residence permit on your own, or simply have any further questions in this regard, we would be happy to help you.

We also support companies in the planning of assignments of foreign skilled workers as well as the  specialists themselves who need legal support.