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Reducing personnel costs in the Corona crisis: how Germany supports employers

Germany supports employers by facilitating the payment of short-time work benefits (“KUG”). KUG is a service provided by the Federal Employment Agency to safeguard jobs and avoid redundancies when employees are temporarily unable to be employed. The previous regulations in this regard have been considerably improved. The new regulation is limited in time and is to expire at the end of 2021. What is KUG? KUG is paid by the Federal Employment Agency to compensate for the fact that a temporary reduction in working hours (and hence pay) is agreed between employees and the employer in a company or part of a company. If there is a works council, its co-determination rights must be observed. Considerable loss of working hours At the present time, there are two situations, in which employers can apply for KUG: temporary closure of the company by the authorities means a complete loss of work for at least a large part of the workforce; or an interruption in supply chains or a decline ...