Update on Corona short-time work as of 27.03.2020
Short-time work is the temporary reduction of normal working hours and pay, due to economic difficulties. The purpose of short-time work is to temporarily reduce labor costs while retaining employees. Corona short-time work is planned and possible for the period 01.03.2020 to 30.09.2020.
2. Application procedure
The following steps must be observed when applying for short-time work:
Step 1: Obtain information from AMS, WKO, or trade unions. Initially, it is recommended to contact them by telephone, electronically via eAMS account, or by e-mail.
Step 2: Conversations with works council, if available.
Step 3: The following documents must be completed by the employer, or the relevant agreements must be executed:
- “Social partner agreement – company agreement” or “social partner agreement – individual agreement” signed by the employer and works council (in the absence of a works council: by all employees concerned), but without the signature of the social partners.
- AMS application form (Corona). The application for corona short-time work can be submitted to the local regional office of the AMS retroactively until 1.3.2020. The application must also be accompanied by a brief justification of economic difficulties (reference to corona and follow-up measures).
Step 4: Transmission of these documents by the employer to the AMS (via eAMS account, by e-mail, or by post) The original documents should also be sent to the AMS by registered mail.
Step 5: Feedback from AMS to companies about approval / need for improvement / rejection.
3. Relief for short-time work with social partner agreement: Corona short-time work
The social partners have agreed to a simplified model. The new model is at the same time a social partner agreement, company agreement, and individual agreement. The necessary signatures of the works council / individual employees can also be obtained via e-mail, SMS, WhatsApp, or by telephone (based on verbal information provided by AMS and the WKO). The declarations of consent that have been issued must be documented accordingly, and the handwritten signature should be obtained after the end of the current measures. The key points are as follows:
- Corona short-time work can be agreed for (i) several companies of one employer, (ii) one company, (iii) individual parts of a company, (iv) certain groups of employees or (v) individual employees. In this case, the reference is to the registered office of the company.
- In principle, all employees subject to unemployment insurance are Excluded from this are marginal part-time employees, freelancers (provided they are not insured against unemployment), civil servants, managing directors, and members of the executive board, provided they are insured under the GSVG. Apprentices can be included in short-time work if they are covered by the social partner agreement.
- Existing, different support does not prevent short-time work. However, the subsidy must be notified to the AMS and will be deducted from the short-time work subsidy. Part-time employees are entitled to the regular amount of short-time work allowance.
- Before or during short-time work, the employee must “as far as possible” reduce the holiday credit balance of previous holiday years (i.e. does not affect the entitlement of the current holiday year), and time credits. If the short-time work agreement is extended beyond 3 months, the employee should consume a further 3 weeks of the current vacation. When submitting an application, the employer only has to prove a “serious effort” to reduce old vacation and other time credits. A unilateral order to reduce old holidays / vacation and other time credits in the context of Corona short-time work is only possible if a works agreement is concluded. When concluding individual agreements, the consent of the respective employee is required.
- Net remuneration guarantee: Employees with gross wages above 2,685 euros receive 80% of their net remuneration received before short-time work, employees with gross wages between 1,700 and 2,685 euros receive 85%, employees with gross wages below 1,700 euros receive 90%. Apprentices receive 100% of the net remuneration received before short-time work, when included in the social partner agreement. The AMS bears the additional costs (up to the maximum contribution basis), not the company. A voluntary increase to 100% of the salary is also possible after verbal information from the AMS. However, there is no binding regulation on this as yet, and the practice is still unclear.
- The net remuneration to be paid by the employer to the employees also includes the remuneration that exceeds the maximum contribution basis (EUR 5,370), even if this does not require any assistance from the AMS. If the employer wishes to reduce the remuneration exceeding the maximum contribution base, a mutual agreement on change or deterioration must be concluded with the employee (attention: the works council must be informed).
- The AMS reimburses the employer for the cost of lost hours (including pro rata special payments, pro rata social security contributions, pro rata benefits in kind, and other wage-related employer’s contributions) in accordance with the fixed flat rates. There is no allowance for income shares above Euro 5,370
- The remuneration (subject to social insurance contributions), including allowances and supplements, but excluding overtime pay, is to be used. Non-revocable overtime lump sums and portions of all-inclusive wages are to be taken into account. Remuneration in kind to which the employee is entitled under the employment contract (e.g. company car, etc.) must also continue to be granted. Variable remuneration components (such as commission, etc.) are to be based on an average of the last 13 weeks.
- Overtime during short-time work is The operating areas in which overtime should be permitted must be explicitly specified in the social partner agreement.
- During the short-time work period, the entire workforce in the company/part of the company must be maintained. If an employment relationship is terminated during the short-time work period, the employer is generally obliged to replenish the workforce (“obligation to replenish”). This is particularly the case for terminations for personal reasons, amicable terminations, and justified resignations by the employee.
- There is no obligation to replenish this amount in the case of employment relationships which have already been terminated, where the notice periods extend into the period of short-time work (note: obligation to notify when submitting an application), in the case of terminations by the employee, dismissals, and temporary employment relationships that end within the short-time work period.
- New entrants during the short-time work period are possible, but these employees cannot be included in short-time work.
- In the company, or part of the company, those employees who have been included in the short-time work may not be dismissed until the end of the retention period (1 month). In special circumstances this may also be waived. During this retention period, additional temporary workers may also be employed.
- In the case of holidays, and the use of other time credits during short-time work, the employee is entitled to their regular, full remuneration. The loss of earnings principle applies. No AMS allowance is due for this, which is why periods of holiday must be deducted 100% from the normal working hours as stipulated in the collective agreement. In the case of sick leave, the AMS is also entitled to a subsidy for the planned lost working hours. Therefore, in the course of calculating the average over the period of short-time work, sick leave must be included in the “normal” calculation (i.e. as if work were being done). If, for example, it was agreed with an employee that they should work 24 hours in week X, with an average reduction in working hours of 70%, the AMS will replace 16 hours for the employer in the event of sick leave. The employer therefore bears the costs for the agreed 24 hours.
- The special payments are always to be paid on the basis of remuneration (or gross wage, depending on the collective agreement) before short-time work.
- Furthermore, there are no effects of short-time work for old and new severance payments. In this case, the working time or remuneration before the introduction of short-time work is to be assumed.
- The normal working hours must be at least 10%, and at most 90%, throughout the entire short-time work period. It can also be zero at times. For example: 6 weeks of reduced working hours; 5 weeks 0%, 1 week 60%. In addition, a different level of employment can be agreed for several persons / groups of persons.
- Fluctuations within the 10% and 90% are possible; overruns of the registered short-time work (i.e. falling short of the registered lost working hours) are permissible and even welcome. They merely cause a correction in the monthly AMS accounts (the allowance is reduced). However, exceeding the 90% limit is no longer eligible and even leads to recovery. The period under consideration is always the full period of short-time work. Attention counts with full “value” as before short-time work, i.e. 100% for full-time work, and quickly increases the average calculation!
- Furthermore, the situation of normal working hours must be agreed. The classification of “Monday to Thursday” and Friday as “free day of reduced working hours” in the social partner agreement is only given as an example. Of course, restaurants or hairdressers, for example, can, as before, keep Monday closed and set Tuesday as a day of short-time work! Attention: Existing flextime agreements (flextime company agreements) must be adjusted if flextime is also to be worked during short-time work!
- The normal working hours can be changed during short-time work in agreement with the works council, in companies without a works council with the employee. The union’s approval requirement does not apply. The social partners must only be informed of the change – at least 5 working days in advance (this only applies in companies without a works council).
- The lost time resulting from short-time work is considered as free time. The employee is therefore free to decide how (e.g. taking up additional employment) and where (e.g. abroad) he or she has this free time at his or her disposal, unless otherwise agreed between employer and employee or works council.
- Please note: Social security contributions are to be paid on the basis of remuneration as before short-time work. The AMS reimburses the employer for the additional costs from the start of short-time work. However, depending on the situation in the company, relief (deferment, postponement of the due date) may be claimed (the greatest relief applies to companies that are subject to the ban on entering the company).
- For employees on short-time work, a payroll list must be submitted to the AMS for each calendar month by the 28th of the following month. The allowance is paid retrospectively for each calendar month after submission and checking of the partial or final statement of account, generally within 90 days (!) of receipt of the complete settlement documents in accordance with the AMS Directive. Corona short-time work can be contracted for a maximum of 3 months. If necessary, it can be extended by a further 3 months after social partner discussions.
- The short-time work allowance is settled via the company’s eAMS account. This account is more difficult to obtain for entrepreneurs than for the unemployed. For this reason, it is essential to apply for an eAMS account in good time (using the form on the AMS homepage or e-mail)!
Applications already submitted will be processed by the AMS. In case of incompleteness / necessary need for changes, the AMS will issue corresponding improvement orders. Please do not make any changes to the applications already submitted without an explicit request from the AMS.
Pursuant to Section 37b(2) AMSG, the conclusion of a social partner agreement may be waived in the event of natural disasters or comparable events affecting only individual undertakings. An epidemic is a natural disaster. Therefore, if companies are directly affected by the epidemic (e.g. closure of a company/closure under the Epidemic Act), they can contract short-time work without a social partner agreement. However, short-time work without a social partner agreement is not recommended, because then the improved conditions of corona short-time work do not apply.