Coronavirus - Am I receiving my full entitlement?
What is the situation?
The rampant spread of Coronavirus and the possible ramifications to one’s employment as a result of this terrible situation remains a hot topic in the current working climate. In our previous articles on this topic, we have sought to detail your rights in regards to possible Coronavirus-based termination and provide a detailed overview as to your rights regarding short-time working allowance (Kurzarbeitergeld), should your working hours have been significantly reduced. As a result of the client contact we have received from these pieces, we would like to focus this article on an issue that has been commonly raised: namely, am I receiving my full short-time working allowance entitlement?
Why is this an issue?
While the vast majority of employers act in good faith when it comes to employee benefits, it is perhaps unsurprising to hear that there are a few who have attempted to abuse the system and retain money meant for the workforce. The reason this becomes even a possibility is due to the way the benefits are paid out by the state. Firstly, the employer must register their intention to reduce hours by filling out the necessary paperwork and provide this to the Employment Agency (Arbeitsagentur). Based on the information provided, the Arbeitsagentur and the employer agree on how much is due to the employees. The employer then pays said amount to the employees and is later reimbursed by the state. The problem is therefore as follows:
As the payments to the employees are disseminated by the employer in the first instance, there have been instances where the employer has paid out less than the employees are due, whilst later claiming the full amount back from the state. Therefore, defrauding both the employee and the social security system.
Thus, it is highly important for the employee to know what they are entitled to and, should such an occurrence occur, to seek legal assistance.
What is my entitlement?
As discussed in our previous article, the employer is entitled to apply for a Short-term working allowance if:
- The working hours of the entire workforce to be cut by more than 10%.
- The employee sees a 10% or more reduction in their gross (pre-tax) wage.
- The employee remains a part of the company.
- The reduction in hours is temporary.
The employee is normally entitled to 60% of their net (after-tax) monthly pay if they have no children or 67% of their net monthly pay if they have a child who currently lives at home. This amount has been temporarily revised as a result of the ongoing Coronavirus, with benefits increasing the longer the employee is on Kurzarbeitergeld. See the revisions to the benefits system here. The Arbeitsagenturhave produced a table which should provide a good overview of exactly how much benefit you should receive.
The span of this benefit should last for a maximum period of 12 months, though there are some murmurings that this time frame may be increased to 24 months in the face of the Corona crisis.
Which issues can arise?
Due to the unprecedented number of Kurzarbeitergeld applications currently being processed in Germany, it is fair to say that there the level of oversight usually employed by the state has been reduced. As mentioned above, we have had several instances of contact, describing situations where employees detail where they feel their employer has taken advantage of the situation.
One of the main difficulties is that the employer registers both the previous number of hours and the adjusted number of working hours on behalf of directly to the Arbeitsagenturas part of the initial registration. This can lead to the employer misrepresenting either the number of hours the employee has worked before the reduction or misrepresenting the working hours that the employee is currently working. Essentially, there is a possibility that the employer can either:
- Claim additional money based on the basis that the employee’s standard hours or rate of pay was greater than it was
- Claim that the employee has had their hours reduced whilst continuing to insist that the employee works more hours (please note that, in this instance, the employee can be also liable)
Should the employer engage in such activities, they may be liable for prosecution under German Subsidy Fraud Laws and can result in very heavy fines and possible custodial sentences.
I believe this is happening to me. What can I do?
Again, it is important to stress that the vast majority of employers will not intentionally engage in such practices but, should you suspect that your benefit payment does not accurately reflect your entitlement, we at ZELLER & SEYFERT would like to help. Our Employment Law expert Dr. Christian Zeller has many years of experience in dealing with such matters and would gladly offer a free initial ‘Corona consultancy’, to discuss the finer points of your case. Feel free to contact us directly via email at firstname.lastname@example.org or by telephone (+49 (0) 30-40 36 785-80).
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