Short-time work during the coronavirus crisis – Applicants obliged to provide accurate information

Michael RainerManaging Partner, MTR Rechtsanwälte

Germany’s federal government has put together a comprehensive aid package to compensate for the economic impact of the coronavirus crisis. This includes making it easier to apply for short-time allowance – referred to as “Kurzarbeitergeld” (or “KUG” for short).

Short-time allowance can provide rapid relief to businesses, enabling them to weather the economic storm whipped up by the COVID-19 coronavirus. Germany’s federal government has therefore made it easier to access short-time allowance with retroactive effect from March 1, 2020. This should allow businesses to better cope with the crisis and maintain jobs.

The provision of short-time allowance is conditional on the loss of work affecting 10 percent of the workers at a given workplace. Prior to the current crisis, the figure was one-third. Employers will be fully reimbursed by the Bundesagentur für Arbeit – the German Federal Employment Agency – for the social security contributions they have to pay for their employees as well as for short-time work. It is also possible to apply for short-time allowance for temporary workers. Moreover, it is not necessary to establish negative working-time balances in order to make use of short-time work.

The barriers to short-time work being approved have thus been significantly lowered. The application for reduced working hours must be submitted by the companies. The information provided by managing directors, board members, or other company decision-makers in connection with the application must be accurate to the best of their knowledge and belief. We at the commercial law firm MTR Rechtsanwälte note that there may be serious legal consequences if the information provided is false.

If the managing director, executive board, or other company decision-makers provide false information in order to benefit from the federal government’s aid package, they are committing a criminal offense and claiming benefits to which they are not entitled. This may give rise to a criminal prosecution for (subsidy) fraud or swearing false affidavits.

Providing false information is not a trivial offense. The legal consequences can be serious. Subsidy fraud is not first constituted, for instance, when disbursements are effected. In fact, it is constituted as early as when the applicant provides false information. Of course, funds that have already been released must be paid back. In addition, there is the real prospect of criminal proceedings or losing licenses.

Employers would therefore be well-advised to ensure that all the information they provide is accurate. Should they run into difficulties, lawyers with experience in the fields of labor and employment law can assist them, including if offenses have already been committed.