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Subsequent review of short-time working allowance notices by the employment agencies

from | Aug 1, 2023

Since July, the legal status prior to the coronavirus pandemic has once again applied with regard to the requirements for the promotion of short-time work.

𝐑ü𝐜𝐤𝐳𝐚𝐡𝐥𝐮𝐧𝐠 𝐯𝐨𝐧 𝐊𝐮𝐫𝐳𝐚𝐫𝐛𝐞𝐢𝐭𝐞𝐫𝐠𝐞𝐥𝐝 𝐝𝐫𝐨𝐡𝐭

During the coronavirus pandemic, applications for short-time working allowances were approved quickly and often without any substantive queries. This was intended to help companies through the crisis in an unbureaucratic manner. However, approvals were always subject to reservations. Now that short-time work has ended at most companies, the employment agency is conducting a final review of the benefits granted and whether the factual/company requirements were met at the time. This is intended to correct incorrect decisions and reclaim overpaid amounts.

This can have serious consequences for companies if mistakes are made when applying for short-time working allowance. This is conceivable, for example, if the employer has simply "ordered" short-time working without first using up time off credits. Another frequent point of discussion is inadequate documentation of lost working hours and the number of employees affected by short-time working.

Companies are obliged to cooperate in audits. As a rule, the employment agency requests wage and working time documents that did not have to be submitted when applying for short-time working allowance. This is often difficult, especially for smaller companies, due to the long periods of time that have passed.

In the event of an allegedly incorrect payment of short-time working allowance, companies are threatened with repayment of the entire short-time working allowance paid according to the current practice of the employment agencies. Furthermore, in the event of an incorrect payment, the previous pay slip would also have to be corrected. As a result, the previously wage tax-free short-time working allowance could subsequently become a wage subject to wage tax - employees are therefore threatened with an additional tax payment. Even if the circumstances relevant for the calculation subsequently change (e.g. in the event of a company closure), the employment agency can subsequently revoke its recognition notice and reclaim benefits.

PBC Legal takeaways: Whether mistakes were made during the pandemic and whether earlier short-time working allowance brings a rude awakening afterwards depends on the individual case. However, if there are serious concerns that the short-time working allowance was wrongly received, immediate action should be taken to limit the damage.

We are happy to support and advise you in checking repayment claims and correspondence with the employment agency.

Author of this article and


Florian Christ

Florian Christ

Lawyer | specialist for labor law

Luisa Victoria Jeck

Luisa Victoria Jeck

Attorney at Law