Wed, Mar. 11, 2009

Subsidized Employee Retention

CK - Washington.   Dr. Jessica Ohle's overview of the German employee retention system is now available in the articles section of the German American Law Journal.

In hard times, business may appeal to the government for subsidizing laid-off staff that the companies want to retain. The German system is similar in scope to arrangements in other European nations but each systems has its own quirks.

Dr. Ohle -- now practicing as a partner in a Berlin employment and labor law boutique and long ago an intern here in Washington, DC -- describes the details, including allowances for seasonal short time workers, Saisonkurzarbeitergeld in The Reduction of Staff Working Hours: Kurzarbeit in German Law An Alternative to Dismissals:
In response to the current world-wide financial crisis, the German government has extended this period to 18 months. Several large German employers, including Daimler and BMW, have recently decided to temporarily lay off their employees in accordance with this program. Kurzarbeit permits employers to keep their trained staff on the payroll during economically difficult times because the state allowance eases their burden in terms of the continued salary payments. This program thus enables German companies to retain their trained staff in times when fewer orders are coming in.

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