This paper will explain what short-time work is, whom it applies to and what requirements a company must meet. The focus of this paper will be on the use of short-time work as a way of saving companies against the background of the current corona pandemic. In this context, it is particularly important to find out what additional measures have been taken to help companies during this period and, in particular, how short-time work can be used to build a bridge for companies to survive this pandemic in the sea of economic consequences.
In April, as a result of the corona pandemic, unemployment figures increased by 308,000 in Germany alone to a total of 2.65 million. Unemployment is expected to climb to more than 3 million. The economy is virtually at a standstill, orders are stagnant, the population is at home and money is no longer flowing. Cancellations of trade fairs and large-scale events, and the decline in travel, are affecting the service sector, especially in the areas of logistics, trade, gastronomy, and tourism. At the same time, foreign demand is dropping, and international supply chains are being disrupted, which impacts production in Germany.
The corona pandemic is hitting companies hard and help is undoubtedly needed if jobs are to be maintained. One form of such help is short-time working. More than half of all German companies have announced short-time work. Introducing short-time work is known to safe companies and maintain jobs through difficult times like these. According to Anke Hassel, a professor of public policy at the Hertie School in Berlin, the policy is one of the reasons why Germany recovered so quickly after the 2008-9 financial crisis.
Table of Contents
1. Introduction
2. Fundamentals of the pandemic and of short-time work
2.1. Coronavirus spread and impact on the economy
2.2. Short-time work
3. How international firms survive the corona pandemic through short time work and short-time work compensation
3.1. Reasons for introducing short-time work during the corona crisis
3.2 Why new legal regulations are needed to increase short-time work compensation
3.3 New legal regulations
4. Conclusion
Research Objectives and Topics
This paper examines how the German instrument of "short-time work" serves as a strategic bridge for companies to maintain employment and mitigate economic collapse during the COVID-19 pandemic. It investigates the legal frameworks, the necessity of state intervention to support low-wage workers, and the effectiveness of adapted regulations in preserving corporate liquidity and staff retention.
- Mechanisms of short-time work and compensation systems
- Economic impact of the pandemic on industrial and service sectors
- Evaluation of recent legislative improvements to existing labor laws
- Retention of qualified personnel during periods of restricted production
- Comparative analysis of short-time work efficiency during financial crises
Excerpt from the Book
3.1. Reasons for introducing short-time work during the corona crisis
If a company had to cut some jobs due to the crisis, it would face the long-term challenge of having to recruit new staff once the crisis phase is over. The instrument of short-time work gives companies the advantage of being able to resume their regular operations and economic activities with a qualified and fully trained workforce.
The advantage of short-time working is that an immediate increase in working hours or resumption of normal working hours is possible if the order situation improves. The personnel is immediately available again. Short-time work thus immediately reduces the companies' costs.
Introducing short-time work in this time is not only beneficial in many ways for the employers but for the employees as well. It is a better way than resorting to layoffs because jobs will be preserved and the resumption of work is possible in a flexible way. Like mentioned above, there are no long application-, hiring and training processes required and the trained specialists remain in the company. Employers should bear in mind that dismissals are bound to observe notice periods, while the person concerned is entitled to full pay, whether or not they are still employed. If a later dismissal is unavoidable after all, the short-time work does not affect the amount and duration of the unemployment- money.
Chapter Summary
1. Introduction: This chapter highlights the economic standstill caused by the pandemic and introduces the research focus on short-time work as a crucial survival instrument.
2. Fundamentals of the pandemic and of short-time work: This section provides context on the viral spread and defines the legal and operational principles of short-time work within the German labor system.
3. How international firms survive the corona pandemic through short time work and short-time work compensation: This main section analyzes the benefits of the instrument for companies, addresses the vulnerabilities of low-wage workers, and details the specific legal changes enacted by the government.
4. Conclusion: The summary affirms that while not a universal cure, the adaptability of short-time work remains a proven mechanism to foster economic stability and prevent mass insolvency.
Keywords
Short-time work, COVID-19, Germany, economic crisis, job security, compensation, labor law, Federal Employment Agency, liquidity, insolvency, collective bargaining, pandemic, unemployment, workforce, social protection
Frequently Asked Questions
What is the core focus of this research paper?
The paper explores how German companies utilize short-time work (Kurzarbeit) to survive the economic fallout of the COVID-19 pandemic while retaining their qualified workforce.
What are the central themes discussed in the work?
Key themes include the economic impact of the pandemic, the mechanics of short-time work compensation, the necessity of legal amendments for low-wage earners, and the role of the state in providing a "protective shield" for businesses.
What is the primary objective of the study?
The goal is to explain how short-time work functions as a bridge to help companies maintain operations and avoid insolvency during the crisis.
Which scientific methods were employed?
The work utilizes a literature and policy analysis approach, examining official government documents, economic reports, and institutional studies from 2020 to assess the effectiveness of labor policy adjustments.
What content is covered in the main section of the paper?
The main section covers the strategic reasons for implementing short-time work, the identification of gaps in the existing support systems for service sector employees, and a detailed breakdown of the new legal regulations introduced in response to the pandemic.
Which keywords characterize the work?
Primary descriptors include short-time work, COVID-19, insolvency prevention, labor market policy, and corporate liquidity.
How does the pandemic affect the usage of short-time work compared to the 2008/2009 crisis?
Unlike the financial crisis of 2008/2009, the pandemic impact is broader, forcing a wider range of industries and low-wage service occupations to rely on state support due to unprecedented drops in demand.
What specifically was changed in the legal regulations mentioned in the text?
The government lowered the threshold of affected employees required to qualify for benefits, fully reimbursed social security contributions for employers, and allowed for higher compensation percentages for employees depending on the duration of the short-time period.
- Arbeit zitieren
- Ivana Tadic (Autor:in), 2020, Short-time Work and Short-time Work Compensation. How International Firms Survive the Corona Pandemic, München, GRIN Verlag, https://www.grin.com/document/958689
