COVID-19 in Germany: The Employment Law Response – So Far

May 05, 2020

The coronavirus (COVID-19) pandemic challenges people, economies, and governments across the globe. This LawFlash highlights the actions affecting employers and employees that the German federal government has taken, or is about to take, to respond to these challenges. The situation is dynamic and should be monitored closely.

The German government’s actions to address the unique challenges of the COVID-19 pandemic are multifaceted. They affect areas as diverse as safety and health, working hours, benefits, and works councils. Though some of the legislative processes involved, from submission of draft legislation to parliament through promulgation in the federal gazette (Bundesgesetzblatt) have been as short as rarely before (just three days in one case), the processes for making some of the changes discussed below have not been completed yet. It is a specific characteristic of governmental action during these times that legislation, sometimes with retroactive effect, often follows government announcements and not vice versa, as could normally be expected.

Common Coronavirus Safety and Health Standards

On April 16, 2020, the federal ministry of labor and social affairs announced common standards for occupational safety and health to protect employees against coronavirus infections. The purpose of these standards is, inter alia, to create sufficient certainty for employees to return to work and to allow for the economy to return to normal, while keeping infections at a level that does not overwhelm the healthcare system. The standards require employers to adopt a comprehensive concept with temporary additional protections against infections, including specific organizational, technical, and individual-related measures. Key elements include:

  • Minimum distance of 1.5 m between individuals. Where this is not possible, alternative protections such as facemasks and transparent dividers shall be used.
  • Office work shall be performed from home where possible. Otherwise, workspaces shall be used, and work shall be organized, in a way that avoids multiple occupancy of spaces by different groups of employees or that ensures the required minimum distance.
  • Business trips and face-to-face meetings should be reduced to the minimum or replaced with telephone or video conferences.
  • Skin-friendly liquid soap and towel dispensers for hand-cleaning must be made available to employees, in particular in restrooms and communal spaces.
  • Regular disinfection of door handles and handrails.
  • Regular ventilation of work spaces where no air conditioning is available.
  • Working hours and breaks should be staggered to reduce personal contact between employees.
  • Visitor access should be reduced to a minimum.
  • Employers should establish processes to quickly investigate suspected infections and should provide for – ideally contactless – temperature measurement of employees and visitors.

The statutory accident insurance providers have adopted numerous additional industry-specific standards that include further guidance in detail on the protections that employers in the specific industry are required to provide to their employees.

Extended Working Hours in Certain Key Sectors

Based on a statute of March 27, 2020, a government regulation of April 7, 2020 permits employers in certain key sectors of the economy to have their employees work longer hours than otherwise set out in the Working Time Statute (Arbeitszeitgesetz) during the period from April 10 through June 30, 2020. The maximum daily working hours may be increased from 10 to 12 hours and, in exceptional cases, the weekly working hours may exceed the normal maximum of 60 hours, always provided that the increase cannot be avoided by proper personnel management and that it is necessary due the COVID-19 pandemic to maintain public safety and order, public health, nursing care, public services, and supply with necessities.

The requirement that 48 hours per week on average must not be exceeded within a period of six months or 24 weeks remains unaffected. Subject to the same conditions, the mandatory rest period between working days of normally 11 hours may be reduced to nine hours. The regulation applies to the manufacturing and delivery of necessities, pharmaceuticals, medical products, products to fight COVID-19, as well as any raw materials and pre-products; medical treatment and nursing care; emergency services and firefighting; police, courts, and government agencies; energy and water supply; waste and sewage disposal; farming; transport of cash and valuables; and pharmacies. Work in these sectors may also be performed on Sundays and public holidays if it cannot be performed on a workday.

Employers may make use of this additional flexibility on the basis of overtime clauses in employment agreements or otherwise by agreement with the employees, subject to agreement with the works council (if any). The regulation does not address overtime pay which continues to be governed by applicable collective bargaining agreements, works agreements, or employment agreements. Unless agreed otherwise, pay for any additional hour is the same as for any normal hour.

States have adopted additional exemptions from normal working hours restrictions, using existing powers under the Working Time Statute, which vary significantly in scope.

Extended Short-Time Work Benefits

Short-time work (Kurzarbeit) is an established instrument to address a temporary downturn in the economy. It enables employers to reduce personnel costs while keeping employees on the payroll. Short-time work has proven very useful during the 2008/2009 financial crisis and is currently the instrument of choice for employers to limit the economic impact of the COVID-19 pandemic. Between March 1 and April 26, 2020 the federal employment agency received about 751,000 short-time work notifications from employers, covering 10.1 million employees. This number of employees is more than three times as high as during the whole of 2009.

Where employers, in response to a lack of work that is temporary, unavoidable and due to economic reasons or force majeure, agree with their works council or, in its absence, their employees to reduce working hours and accordingly pay to less than 90% of normal hours and pay for – normally – at least one third of the employees in the business or a business department, the federal employment agency provides short-time work pay to affected employees. Short-time work pay amounts to normally 60% or, if the employee lives with a child, 67% of the loss in net pay resulting from the reduction in working hours, subject to a cap on underlying gross pay of €6,900 per month. This benefit, as all benefits provided by the federal employment agency, is primarily funded by employers and employees through monthly payroll deductions. The contribution in 2020 is 2.4% of pay, borne by employers and employees in equal shares, subject to a maximum monthly contribution of €165.60.

Based on a statute of March 13, 2020, a government regulation of March 25, 2020 made some initial changes to this scheme for the period from March 1 through December 31, 2020. The regulation extended short-time work benefits in four respects:

  • The one-third employee threshold was reduced to 10% of the employees.
  • Employers will not be required to have their employees accrue negative hours to avoid short-time work.
  • While employers normally have to pay all social security contributions, including the employee share, on 80% of the loss in gross pay without recourse, the federal employment agency will now reimburse employers for these contributions.
  • Short-time work was also made available to recruitment agencies and their employees.

The regulation leaves unaffected the requirements that employees take vacation days already scheduled and, within certain limits, use accrued paid time-off to avoid short-time work.

Another government regulation of April 16, 2020, applicable from January 31 through December 31, 2020, extended the maximum period for drawing short-time work pay for employees whose entitlements arose prior to December 31, 2019 from the usual 12 months to 21 months, but no longer than December 31, 2020. This extension aims to avoid that employers who have already been using short-time work in 2019 are required to terminate this scheme in the midst of the COVID-19 pandemic and, as a likely result, have to dismiss employees.

On April 29, 2020, the federal government adopted additional draft legislation to increase short-time work pay for employees whose working hours and accordingly pay are reduced by at least 50%. Instead of 60%, a percentage of 70% shall apply from the fourth month and a percentage of 80% from the seventh month of drawing short-time work pay. For employees who live with a child, the percentages shall increase to 77% and 87%, respectively. Months prior to March 2020 shall be disregarded in this context. The higher percentages shall apply until December 31, 2020. They indirectly benefit employers who have agreed, or may agree going forward, to make top-up payments to their employees that, after taking into account pay for the remaining work and short-time work pay, compensate the remaining loss in whole or in part. The costs of such top-up payments for employers will be reduced accordingly. Offering such top-up payments can be helpful to obtain employee and/or works council consent. The federal employment agency has confirmed that employers may agree to top-up payments that, together with pay for the remaining work and short-time work pay, amount to 100% of employees’ net pay, without the employees losing their entitlement to short-time work pay.

Additional information on short-time work is included in Q&As published by the federal ministry of labor and social affairs on its website.

New Benefit for Employees with Childcare Responsibilities

Effective March 30, 2020, a new government benefit was introduced for employees with schoolchildren or kindergartners affected by temporary school or kindergarten closings ordered by local government authorities to prevent the COVID-19 infection from spreading. Such school or kindergarten closings have occurred across all of Germany. The new benefit is available to employees with a child younger than 12 years or with a disabled child requiring care who, in the absence of any reasonable alternative childcare option, take care of their child on their own, cannot work as a result, and thus suffer a loss in pay.

Reasonable alternative childcare options include childcare by the other parent, relatives, or friends, home office work where reasonably possible, and the use of accrued paid time-off. The benefit is not available for school or kindergarten closing periods that are due to school holidays. It is paid for a maximum period of six weeks and amounts to 67% of the loss in net pay, subject to a cap of €2,016 per month. Employers are required to pay this benefit to eligible employees and to apply to the competent government agency for reimbursement. The benefit is available until December 31, 2020. It indirectly benefits employers as well, as they might otherwise have been required to continue paying affected employees, at least for an initial period of up to five days.

Tax Benefit for Additional Bonuses

According to a circular letter of the federal ministry of finance dated April 9, 2020, bonuses of up to €1,500 that employers pay to their employees in addition to regular pay between March 1 and December 31, 2020 shall be free of tax. This benefit is intended to acknowledge employees’ special efforts during the COVID-19 pandemic.

Video and Audio Conferences for Works Councils

On April 23, 2020, the Bundestag, the first chamber of the federal parliament, approved temporary changes to the Works Constitution Statute (Betriebsverfassungsgesetz) and other employee representation statutes to allow for the use of video and audio conferences by works councils and other employee representatives during the period from March 1 through December 31, 2020. Currently, these statutes require works councils and other employee representatives to meet face to face to adopt resolutions which is obviously not ideal during the COVID-19 pandemic. Resolutions that are not adopted in face-to-face meetings are subject to legal challenges in court, for example by individual works council members. This affects employers as well since all measures that are subject to works council consent, for example an agreement on short-time work (see above), require a valid works council resolution to be enforceable.

The minister of labor and social affairs addressed this issue already in a letter of March 20, 2020 in which he appealed to employers and works councils to make reasonable use of video and audio conferences. However, since the interpretation of statutory law is the prerogative of the courts, additional steps were necessary to establish legal certainty. The draft legislation requires that video and audio conferences, for example WebEx or Skype meetings, may only be used if confidentiality is ensured and that recordings are not permitted. Subject to the same requirements, video and audio conferences may also be used for all employee meetings or, in their place, departmental meetings that are required under the Works Constitution Statute. The draft legislation is now with the Bundesrat, the second chamber of the federal parliament, which is expected to approve it in its next session scheduled for May 15, 2020. While the use of video and audio conferences by works councils is generally welcome, the fact that the proposed legislation is scheduled to expire at the end of 2020 will make it more difficult than before to argue that existing law already allows for using such technologies. It is regrettable that the proposed legislation does not leave it to the works councils to decide on their own whether or not, and in which circumstances, to use video and audio conferences, without any limitation in time.

Coronavirus COVID-19 Task Force

For our clients, we have formed a multidisciplinary Coronavirus COVID-19 Task Force to help guide you through the broad scope of legal issues brought on by this public health challenge. We also have launched a resource page to help keep you on top of developments as they unfold. If you would like to receive a daily digest of all new updates to the page, please subscribe now to receive our COVID-19 alerts.


If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Dr. Walter Ahrens