Short-time working or short time (in German: ) is a governmental unemployment insurance system in which private sector employees agree to or are forced to accept a reduction in

working time Working(laboring) time is the period of time that a person spends at paid labor. Unpaid labor such as personal housework or caring for children or pets is not considered part of the working week. Many countries regulate the work week by law, ...

and pay, with the state making up for all or part of the lost wages. Several European countries operate short-time schemes to limit the impact of

recession In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various ...

s on the economy and on employees. Their intent is to enable companies to avoid

layoff A layoff or downsizing is the temporary suspension or permanent termination of employment of an employee or, more commonly, a group of employees (collective layoff) for business reasons, such as personnel management or downsizing (reducing the ...

s or

bankruptcies Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

during a recession because of the state's wage subsidies. Short-time programs have notably been used as an instrument against the COVID-19 recession in 2020.

Austria

Austria Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...

, the introduction of short time requires a special arrangement between what are called the "social partners" of Austrian collective bargaining (which is to say, the

Chamber of Commerce A chamber of commerce, or board of trade, is a form of business network. For example, a local organization of businesses whose goal is to further the interests of businesses. Business owners in towns and cities form these local societies to ...

and the labour unions), who negotiate on behalf of the employer and affected staff the scope of the ' arrangement in terms of the staff covered, the maximum period of its application, the conditions for any lay-offs during the arrangement, and the scope of any professional training or re-training courses included.

Czech Republic

Amid the

COVID-19 pandemic in the Czech Republic The COVID-19 pandemic in the Czech Republic is part of the worldwide pandemic of coronavirus disease 2019 () caused by severe acute respiratory syndrome coronavirus 2 (). The first three confirmed cases in the Czech Republic were repor ...

, the government of

Czech Republic The Czech Republic, or simply Czechia, is a landlocked country in Central Europe. Historically known as Bohemia, it is bordered by Austria to the south, Germany to the west, Poland to the northeast, and Slovakia to the southeast. The ...

Andrej Babiš Andrej Babiš (; born 2 September 1954) is a Czech politician and businessman of Slovak descent who served as the Prime Minister of the Czech Republic from 2017 to 2021. Babis previously served as the Minister of Finance and deputy Prime Minister ...

announced plans to partially subsidise salaries of employees on reduced work schedules, covering 50-70% of pay for 1, 2, or up to 4 days per week that employees are at home due to shocks to companies coming from pandemics or natural disasters. Employers have to cover health and social insurance for the days when workers are at home, and employees contribute by the partial reduction in their pay.

Germany

It was in Germany that a system of "Kurzarbeitergeld" (or "short-time work benefit") was first introduced, on 25 May 1910, to address a downturn in the potash mining and fertiliser industry; it became fully established in 1924 in response to the first economic crisis of the Weimar Republic. Under the scheme temporarily laid-off workers receive payments, now from the Federal Employment Agency (BA), the agency that is also responsible for issuing unemployment benefit. Under the scheme, the companies pay the hours actually worked at the original salary, while the state (or the BA, precisely) compensates 60 percent of the original pay for each hour not worked. This means that an individual might work 30 per cent less while experiencing only a 10 per cent loss in income. In 2009, the

German German(s) may refer to: * Germany (of or related to) **Germania (historical use) * Germans, citizens of Germany, people of German ancestry, or native speakers of the German language ** For citizens of Germany, see also German nationality law **Ge ...

government had budgeted 5.1 billion euros on the program, which replaced some of the lost income of over 1.4 million workers. The program was favorably cited in a 2009

Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...

(OECD) report, which stated that it had saved nearly 500,000 jobs during the recession. It is "widely considered the gold standard of such programs", according to the IMF. Besides helping to avoid mass layoffs, proponents of the program also cite its keeping skilled work groups together and avoiding the atrophy of their skills during extended layoffs, while critics have expressed concerns about its expense and that it might prop up non-viable firms. During the

COVID-19 pandemic The COVID-19 pandemic, also known as the coronavirus pandemic, is an ongoing global pandemic of coronavirus disease 2019 (COVID-19) caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2). The novel virus was first identi ...

, the level of the compensation for cut hours was raised. If working hours are reduced by at least 50%, the "Kurzarbeitergeld" covers 70% of the lost salary from the 4th to 6th month, and 80% from the 7th month onward. This change to the original scheme is applicable until 31. December 2021. Furthermore, the maximum duration was extended to 24 months, up to 31. December 2021, if the short-time-work has already started in 2020.

Romania

Due to the economic difficulties due to the

, the Romanian government is considering adopting a measure based on the German model of Kurzarbeit.

References

External links