Businesses’ around Germany are slowly beginning to open their doors after months of closure, but the fallout of the Coronavirus crisis continues to bite with many workers remaining Kurzarbeitergeld. In our series of articles about Kurzarbeitergeld in the times of Corona, we have attempted to answer the basics of what you are entitled to and to answer frequently asked questions we have received from our clients. A common question posed to us, especially from those working here within the expat community, has been from workers on a variable wage. As has been mentioned in our Kurzarbeitergeld entitlement article, the applicant is entitled to 60% or 67% of their net salary but how does this apply to workers whose income can vary from month?
As above, the worker placed on short time entitlement is assured 60% or 67% of their set monthly income but many employees work with a reduced ‘standard’ pay, with the rest of their wage being made up with additional payments based on incentives such as commission, hours worked or the reaching of targets. Whilst not 100% guaranteed to be paid, the worker will likely have come to rely on such wages, as the basic in these cases tends to be very small. Should the worker then be placed on Kurzarbeitergeld and only be paid 60 or 67% of the basic, they very well may only receive a tiny percentage of their usual wage.
So, what are the rules?
The posed question is not as easy to answer as would first seem and will depend on the type and frequency of the additions to the wage. As ever, the devil is in the details and will vary from case to case but, generally, if you are receiving the bonus(es) regularly and as part of your payment structure, then this bonus will be included in your Kurzarbeitergeld remuneration. Should the bonus(es) received be a one-off payment, these will not be taken into consideration. So, for example, should you be a person who receives a small monthly basic and is paid additionally for hours worked, these additions will be added to the Kurzarbeitergeld claim. Should the bonus be a one-off sales commission, again for example, this will not be taken into the overall calculation. Additionally, once per year pay-outs such as extra money paid out before or during holidays (Urlaubsgeld) or money paid yearly as a Christmas bonus (Weihnachtsgeld) will not be taken into consideration.
Basically, if the additional payment you receive makes up a significant portion of your monthly wage and there is an acceptance from all the parties involved that you were likely to receive this payment as part of your duties, these additional monies should be included your Kurzarbeitergeld claim.
Room for confusion
As you can imagine, the demarcation lines between such distinctions may not be immediately apparent and has led to confusion for many variable wage workers when opening their payslip, especially when they have been far less than expected. You are well within your rights to contact your employer and request a breakdown of the monies paid to you and, should you feel you have been underpaid, to lodge a formal complaint. In very rare circumstances, employers have taken advantage of the system to underpay employees yet claim full amounts from the state. Read more about possible Kurzarbeitergeld fraud here.
It is important to note that, should the employer be unable to accurately calculate the correct remuneration for the employee, they are obliged to take the average of the last 3 months net payments paid. This is pursuant to § 106 (4) SGB III, which can be read (in the German language) here. It is understood, however, that the Federal Employment Agency is currently only taking the last months pay into consideration, when calculating the relevant amount to be paid. This can also be an issue, as one month in isolation may not accurately reflect the average wage one receives in their work.
It is important to note that the Kurzarbeitergeld system was extended in a very short time to deal with a massive impending crisis and, for the most part, has proven very effective in mitigating the devastating effects of the current pandemic. The intricacies of its finer points are therefore not always immediately obvious, and this can lead to large scale confusion for employees and employers alike. Should you be an employee with variable monthly income who feels they are being underpaid or an employer requiring assistance in the managing of Kurzarbeitergeld claims, we at ZELLER & SEYFERT would like to help. Our Employment and Labor Law specialist Atty. Dr. Christian Zeller has multiple years of experience in this realm and would gladly offer a free initial consultation. He can be reached by telephone on (+49 (0) 30 40 36 785 80) or by email at firstname.lastname@example.org. Our contact form can be found here.