Understanding short-time workingWhat are the implications for companies and employees?

Among these, 45 companies operating in the construction sector are slated to implement short-time working measures next month. But what exactly does this entail for both the companies and their employees?

Conditions for implementing short-time working

Access to partial unemployment, also referred to as short-time work, is governed by labour laws. These laws outline four specific scenarios under which a company may apply for short-time working:

1. Structural reasons: Companies facing structural difficulties necessitating employee layoffs may use short-time working as part of an employment retention or recovery strategy.
2. Economic difficulties: Businesses operating in sectors grappling with economic crises are eligible to apply for short-time work.
3. Economic dependencies: Certain companies rely heavily on a select few clients for financial viability. Should these clients encounter financial difficulties, these companies have the right to seek partial unemployment support.
4. Force majeure: Circumstances beyond a company’s control, such as natural disasters like floods, may disrupt normal operations. In such cases, affected companies are entitled to apply for short-time work.

Impact of short-time working on employees

When a company implements short-time working measures, it can impact some or all of its employees, irrespective of their employment status — whether fixed-term or permanent. During periods of partial unemployment, affected employees either work reduced hours or are not required to report to work at all.

For the hours worked, employees receive their standard hourly wage. Conversely, for the hours not worked, employers must provide compensation amounting to at least 80% of the employees’ usual hourly wage. Should partially unemployed employees engage in training programmes, they are entitled to compensation equivalent to 90% of their last hourly wage for the training hours. In both scenarios, the compensation must not fall below the unqualified minimum wage. If compensation falls short of the minimum wage, the difference is covered by the Employment Fund.

ADEM reimbursement for compensation

The National Employment Agency (ADEM) reimburses companies for the compensation paid during short-time working, with the reimbursement capped at 80% of the affected employee’s salary and 2.5 times the qualifying minimum wage.

Impact on employee earnings

Transitioning to short-time working typically results in reduced earnings for affected employees. However, no employee will receive less than the qualified minimum wage.