Germany: A Guide to Prevent Collapse During Coronavirus

Emily Kuhnert March 19, 2020

We have gathered information on what measures you can take as an employer  in Germany to help preserve your employees while keeping your business intact. As more information comes in, we will update this post.

If you have any questions on the impact of Coronavirus on labor laws, visit our Linkedin AMA post and leave us your questions in the comment section and we will reply.

[AMA] Impact of Coronavirus on Labor Laws

Updated: March 19, 2020

Protective Shield

The government is creating a protective shield for employees and companies who are effected by the impact of the coronavirus. It consists of four pillars:

  1. Making reduced hours compensation benefit (Kurzarbeitergeld) more flexible
  2. Tax-related liquidity assistance for businesses
  3. A protective shield worth billions for businesses
  4. Strengthening European cohesion

Closure of an entire company – it is yet to be decided if state compensation payments will be granted.

Overtime regulations – if a large number of employees fall ill, employers can request the remaining employees to work overtime to the extent permitted by law even if it is not stipulated in the employment contract.

Unpaid vacation

Employees are expected to continue showing up for work. In case they cannot due to personal limitations excluding falling ill due to the coronavirus, they can be released from work without pay.

Employees that needs to attend to a sick child or a relative and their personal contract includes Sec. 616 German Civil Code (GCC) are allowed to stay away from work with pay for up to 5 days in case of a close relative and between 10 to 20 days per child up to the age of 12.

Employees band from work or quarantined – the employee is not entitled to pay from the employer. Employers continue paying the employees’ salaries and can claim reimbursements by applying to the German authorities. The application for reimbursement must be submitted to the relevant authority within three months after the termination of the prohibited activity.

Any request for work from home should be discussed and agreed in writing by both the employee and employer.

Short-time work

In an effort to overcome economic crises and avoid dismissals working hours can be reduced proportionally or completely and can affect all employees or only some. In addition to the reduced monthly payment paid by the employers, employees will be entitled to short-term working allowance during the period of short-time work, is a benefit from unemployment insurance. The short-time allowance is intended to compensate at least partially for the loss of earnings.

For employers to receive short-time working they must notify the relevant employment agency in writing or electronically of the workload and provide credible evidence that a considerable amount of work is lost. Moreover, the employer should provide a proof that the operational requirements for the short-time work allowance are fulfilled.

Short time working allowance amounts to 67% of the net difference in remuneration (parents) or 60% of the net difference in remuneration. Short time work compensation is currently granted for a maximum of 12 months. There are current discussions to increase the amount of the compensation due to the coronavirus.

Employer and Employee Rights & Obligations Q&A

Source: Baker McKenzie

1. Are employees obliged to disclose themselves as a “risk-factor” to the employer?

  • Employees with a confirmed infection need to disclose the same to their contractual employer.
  • Employees with flu symptoms who: i. visited or ii. had contact with individuals from areas with presumed community transmission of COVID-19 (e.g., China, Italy, North or South Korea, Japan, Singapore, Hong Kong and Iran) within the past 3 weeks need to disclose this circumstance.
  • Even without flu symptoms (i.e., fever, cough, difficulty breathing, pain in the muscles, tiredness), employees who: i. have an individual with a confirmed infection in their household or ii. visited an event, which later became known to be a venue from which the disease spread, need to disclose this circumstance to their employer.

2. Can the employer demand employees to disclose themselves as being a “risk-factor”?

  • The employer’s right to ask certain questions has as counterpart the employees’ obligation to disclose the corresponding information (i.e., the employer has the right to ask for the circumstances specified as per question no. 1 and the employee has to provide the corresponding and truthful answer).

3. Can the employer issue an instruction (or a policy) requiring employees to report co-workers with flu symptoms (i.e., fever, cough, difficulty breathing, pain in the muscles, tiredness) to the employer?

Yes, but this is a significant intrusion on privacy in a sensitive area. For reasons of proportionality at least the following precautions should be taken:

  • Limit geographic scope: The reporting possibility should only be offered for employees of: a) sites located in areas with presumed community transmission of COVID-19, or b) sites in which an employee was diagnosed positively with a Coronavirus infection, or c) sites in which an employee had allegedly come in contact with an individual with a confirmed infection.
  • Offer, don’t oblige to report: The reporting possibility should be phrased as an invitation to report, rather than as an obligation to report (under German law it is very questionable whether a reporting obligation can be created unilaterally by means of an instruction);
  • Keep reports within the employer: The reporting channel should be limited to the employer (i.e., the contractual employer and not to anyone else in the group of companies and not to third parties) and within such employer to a narrowly defined group of recipients (e.g., the Coronavirus crisis team);
  • Limit reportable content: It should be made clear that: a) the reporting channel must only be used with regard to the fact that symptoms exist and not for reporting an individual’s specific symptoms and b) The reportable symptoms are limited to the publicly known and acknowledged list of symptoms (i.e., fever, cough, difficulty breathing, pain in the muscles, tiredness)
  • Separate reports from other employee data: The information reported through the reporting channel should be recorded separately, not be included in the employee’s personnel file and should be deleted 6 weeks after recording.
  • Create transparency: A transparent notice, containing information according to Art. 13 GDPR, needs to be issued to all employees (including contingency workers) before the reporting line is opened, especially as regards the points mentioned herein, but also as regards the steps envisaged by the employer upon having received a report).
  • Inform data subjects: The employee concerned by a report has to be notified as soon as possible.
  • Decide how to treat the reporters: There is an ongoing discussion in Germany whether the data subject (i.e., the reported subject) has the right to learn who reported him or her – we deem it possibly (even though not entirely risk free) to assure reporters to treat their reports in confidence when such reports were made in good faith. Even though not a privacy compliance issue, please note that the works council has a co-determination right with regard to the technical system used to implement the reporting line and the reporting requirements.

4. Can employees refuse to come to work?

  • Employees can only refuse to come to work if: i. there is a confirmed Coronavirus infection in the work place and ii. the employee’s place of work is in close proximity to where the infected employee was located (i.e., same open space office) and iii. the employer cannot reassign the employee to a no-risk environment at the workplace.

5. Can employees refuse to attend meetings or to travel? 

  • Only if the meeting takes place in a region officially recognized by authorities as being a crisis-region or if attendees visiting from crisis-regions would attend (for information see https://www.auswaertiges-amt.de)
  • Same rule applies for business travel.

6. Can the employer send employees on suspension from work? 

  • If an employee qualifies as a “risk factor” based on the criteria set out in the response to question no. 1, the employer is obliged to lock out the employee.
  • The employee would need to continue to work if possible (e.g., from the home office) unless sick.

7. When is the employer forced to shut down its operations? 

  • In case of a corresponding administrative order. Such administrative order can determine that certain industries have to shut down in certain regions. This has happened recently in some regions for places that provide leisure activities such as bars, restaurants, cinemas, etc.
  • Absent an administrative order, only if there is evidence that the place of work is an “out of control crisis venue”. This decision should only be made in consultation with local health authorities (Gesundheitsamt).

8. Does the employer have the obligation to report infections occurring in the business to the health authorities?

9. Can the employer require an employee to see a doctor?

  • No, the employer can only recommend the employees to see a doctor. If the employee refuses, the employer can send the employee on paid garden leave under the preconditions stipulated in item no. 6.

10. If employees are sent on suspension from work, or refuse to come to work or if an operation is being shut down, do the employees still need to be paid? 

  • In case of suspensions caused by administrative orders, there are certain rules under which the employer can receive a reimbursement of salaries for up to 6 weeks. The employer needs to make a filing for reimbursement and initially is required to process the payments to the employee (i.e., it is a reimbursement regulation).
  • In case of a legitimate lock out, suspension from work or shut down (based on the requirements stipulated in these FAQ), the employee would need to be paid. But the employee would also be required to take all reasonable steps to work from home. Further, the employee would need to accept being temporarily reassigned physically within the workplace to a no-risk environment (i.e., other office) or to be assigned with different duties even if these are inferior to the standard duties (unless entirely unacceptable).

11. If kindergartens and schools are being closed and employees need to stay home and cannot work, does the employer need to pay them and – if so – for how long?

  • If kindergartens and schools are being closed and alternative care options (such as grandparents or other facilities) do not exist, the employee can refuse performing work for such time. Unless stipulated otherwise in the employment contract, the employer would need to continue paying the employee for the duration of a “temporary unavailability”. While subject to the specifics of the case, case law suggests that a temporary unavailability in case of urgent childcare needs may last no longer than 5 work days.

 

For more details see our complete payroll & benefits guide to Germany