What companies have to look out for when receiving short-time work benefits and corona aid

June 30th, companies shouldn’t just not look at the examination and possible repayment of the Corona bridging aid mark in red on the calendar. Because this key date also plays a role in the topic short-time allowance a major role. Despite the lack of economic recovery, the relief on short-time work benefits will expire on June 30th. Joachim Zobel and Alexander von Saengerder law firm Schultze & Braun explain why, after the relief for many companies on the subject of short-time work benefits, the toughest test is still ahead.

Especially since the beginning of the corona pandemic, many companies have benefited from the simplification of short-time work benefits and some companies would be without the possibility of short-time work definitely not on the market anymore.

Administrative effort and submission of numerous documents

In view of the multi-permanent crisis, the fundamentally necessary reviews of short-time work benefits for the companies affected come at the worst possible time. “The tests are associated with an enormous administrative effort and the submission of numerous documents,” says Alexander von Saenger, also a specialist lawyer for labor law.

order for one Examination by the Employment Agency In order to be prepared, companies should therefore pay particular attention to the following five points and ensure that the relevant evidence and documents are available:

• New and/or replacement hires: Documentation and proof of the need for new and/or replacement hires of employees during the short-time allowance period.
• Special times of absence: Documentation of special times of absence of employees – for example in the event of illness, corona quarantine, maternity leave, parental leave, vacation or leave of absence and changes to these times of absence during the short-time allowance period.
• Planned working and absence times and working time model: Documentation and transparent evidence of the specific planning of working and absence times (“target working time”) and the working time model used.
• Actual working hours and short-time work: Documentation and transparent evidence of actual working hours and short-time work (“actual working hours”).
• Avoidance of short-time work: Presentation of the review and implementation process to avoid short-time work, in particular prior granting of vacation, use of working time accounts and reasonable “alternative activities” within the company.

Short-time work, the sword of Damocles: Financial risk and a challenge for companies of all sizes

The possible Reclaiming short-time work benefits poses a not inconsiderable financial risk for the companies affected,” says von Saenger. “Because the likelihood that a company will have to repay at least part of the short-time work benefits it has received is very high.”

One reason for this is that the short-time work allowance during the corona pandemic was usually provisionally approved without the usual prior consultation with the Employment Agency. “The companies paid the money they received directly to the employees on short-time work, which of course means that this money can no longer be made available for repayment,” says Zobel. “A short-time work sword of Damocles, sometimes worth millions of euros, hangs over many a company.”

“Our practical experience shows: above all small and medium-sized companies were often unable to foresee the intensity of the audit and the associated financial risk,” says von Saenger. “But even large companies with their own legal department often do not have the resources and depth of documentation that is expected to organize the necessary preparations before conducting short-time work reviews.”

Short-time work benefits in the billions – don’t take exams lightly

At the peak of April 2020, almost six million people were on short-time work in Germany. The Federal Employment Agency paid out a total of 45.5 billion euros for short-time work benefits in the years 2020 to 2022. “This sum alone shows the financial challenge of checking short-time work benefits,” says Zobel. In addition, most of the companies that sent their employees on short-time work during the pandemic are still struggling with the economic effects of the pandemic – from the upheavals of other crises such as the energy crisis and not to mention the inflation-related reluctance to spend on the part of many consumers. The topic of short-time work is likely to remain in the German economy for quite some time – and companies would do well not to take the examination and possible repayment of funds received lightly.

Avoid repayments or reduce the amount of the repayment

“With the information in the final statement, companies can either avoid a repayment obligation entirely or at least reduce the amount of the repayment if they have received help but were not entitled to it,” says attorney Elske Fehl-Weileder from Schultze & Braun. “It is all the more urgent for managers to deal with the final accounts as soon as possible – especially because of the great operational and administrative effort involved in submitting the final accounts.”

This serves to check the information originally provided in the application for financial aid. Since the time for the application was sometimes short and it had to be done quickly, this information is based on estimates in most cases. The amount of any repayment is calculated based on the difference between the figures in the final statement and the information in the application. It is therefore important to check exactly what the figures for the final bill look like. In addition, the funding conditions for the bridging aid have changed continuously, which must also be taken into account in the final settlement.