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COVID and Kurzarbeit in Germany – How workers are paid when their work dries up

The state-funded German safety net known as Kurzarbeit, which keeps salaries flowing to workers even when their work has dried up, is getting renewed attention as governments around the world grapple with the economic fallout of the coronavirus pandemic. The European Commission is using the German program as a model for a regional effort to encourage that workers are furloughed, not sacked. Even some in the U.S. are curious.

1. How does Kurzarbeit work?

Businesses facing a temporary and unavoidable shortfall of orders due to a crisis — as is the case for many due to the coronavirus — can apply for the government to subsidize workers’ salaries while activity is reduced or put on hold. Kurzarbeit — pronounced KUHRTS-ahr-bite, and loosely translated as “short-time working” — typically covers 60% of lost net wages, which rises to 67% for people with children. That’s far more generous than what’s on offer to furloughed workers in the U.S. and elsewhere. Companies are still responsible for paying workers and must apply to get reimbursed by the state. The German government has expanded the program to include contract workers and cover social insurance contributions. Through October, the government also is allowing people who are receiving the wage support to take up additional work in “systemically relevant” occupations without any financial disadvantage.

Chosen excerpts by Job Market Monitor. Read the whole story @ How Germany Pays Workers When Their Work Dries Up  – The Washington Post


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