FAQ Coronavirus Labour Law Questions and Answers

In addition to health and social problems, the Corona crisis raises a number of labour law issues. The following guide provides answers and recommendations for action to the most pressing questions:

  • Employer’s duties
  • Working from Home
  • Employees in quarantine
  • Childcare during the Corona crisis
  • Continued payment of wages during the Corona crisis
  • Holidays, reduction of overtime in times of Corona
  • Short-time work
  • Social Protection Package
  • Works council work in times of Corona
  • Terminations
  • General organisation possibilities of employers

The Corona crisis called for rapid political action. Many laws have been passed during the last weeks, inter alia the Ordinance on the facilitation of short-time work, the Social protection package as well as the Law on the protection of the population in the event of an epidemic situation of national significance. This FAQ should give an overview on the current legal situation in light of the Corona crisis.

Employer’s duty requirements

What do employers need to consider in view of the pandemic?

The employer has a duty of care for its employees and must therefore take reasonable organizational measures to minimize the risk of infection. The following precautional measures must be taken:

  • Stricter hygiene regulations: Stricter hygiene measures must be taken, e.g. by placing disinfectants, frequent disinfection of the operating rooms, etc.
  • Reorganisation of operating procedures: Employers should now waive all non-essential business trips by their employees. All employers are now required to check whether working from home workplaces can be set up to minimize the risk of infection in the company. If it is necessary to work within the company offices, the employer must – if possible – ensure that the distance of at least 1.5 metres between employees can be maintained.
  • Concrete measures in case of infections: If an employee informs the employer that he/she has been tested positive for the Coronavirus, the employer must take the necessary measures, e.g. identify contact persons, contact them and send them to quarantine or – if possible – let them work from home until it is clarified whether they have also become infected. Any Corona infection must be reported and the employer must notify the health authorities. The recommendations and instructions of the health authorities must be observed. We have summarised answers to questions on the protection of employee health data in a separate article.

In order to ensure that all these measures are taken in a timely and orderly manner in the future, it is recommended that companies conclude a shop agreement with a works council on how to deal with pandemics or, if there is no works council, to draw up their own emergency plan for dealing with pandemics.

What applies to employees who belong to a risk group?

In the case of employees who belong to a risk group, the employer’s duty of protection is increased. The employer must therefore try to minimise the risk of infection for employees in need of special protection, e.g. by setting up a working from home possibility, avoiding all business trips, etc.

Working in the home office

Are employees allowed to stay away from work or refuse certain tasks for fear of infection?

There is no general right of employees to refuse to (come to) work if a viral disease such as Covid-19 breaks out. For such a right to exist, it would be necessary that performing his or her work would be considered unreasonable and unacceptable for the employee. This is the case if the work represents a considerable objective danger for the person concerned or at least a serious objectively justified suspicion of danger to life or health (e.g. because of serious previous illnesses of the respective employee).

However, if employees are concerned about getting infected, these concerns should be taken into account. It is also generally advisable to check whether working from home workplaces can be set up to reduce the risk of infection.

Can working from home be ordered unilaterally by the employer against the employee’s will?

In principle, a working from home workplace is not equivalent to a workplace on the employer’s premises. A permanent, unilaterally ordered work of the employee from home against his or her will would only be possible by issuing a notice of termination with change of work conditions.

However, the current situation and the employer’s duty of care must be taken into account. Temporary work from home for the protection of the workforce and with sufficient technical equipment should reconcile the interests of all parties involved appropriately. In view of an increased risk of infection (e.g. in the case of already existing infections in the company), it is even advisable to switch to working from home if possible. Under the current circumstances, a unilateral right of the employer to impose general obligations under the Infection Protection Act is to be affirmed from our perspective.

Employees in quarantine

Can the employer require that employees remain in quarantine at home even without symptoms, e.g. after a business trip to a risk area?

This unilateral release from the duty to work by the employer is permitted for the duration of the incubation period. Preventing the potential risk of infection of other employees is an objective reason for exercising the employer’s right to issue instructions. The employee retains his or her entitlement to the contractual remuneration during the release period.

If it is possible to work from home, the employee should not be released from the duty to work but should continue to work in home quarantine in order to make use of his/her work performance.

Can quarantine days be “offset” against the annual vacation days?

No. As a general rule, the employee – as long as he or she shows no symptoms of illness – is also willing to work during the quarantine. The quarantine – whether ordered by the authorities or by the employer – does not meet the recreational purpose of vacation and can therefore not be “offset” against the annual vacation.

Childcare during the Corona crisis

Do employers have to pay the contractual remuneration if employees have to care for sick children and cannot perform their work?

In principle, the employer remains obliged to continue to pay remuneration for a short period of time (usually a maximum of 5 days) in the event of temporary inability to work due to illness of a child pursuant to sec. 616 German Civil Code (“Bürgerliches Gesetzbuch”, “BGB”), unless this obligation was effectively excluded in the employment contract, collective bargaining agreement or a shop agreement. If sec. 616 BGB is effectively excluded, the general claim for child sickness benefit pursuant to sec. 45 of the Social Code, Book V applies. Parents have a claim for child sickness benefit against their health insurance if, according to a medical certificate, it is necessary to be absent from work to supervise the sick child. In such a case, there is only a claim of the employee against the employer for release from the duty to work but not for continued remuneration.

Employers should therefore check whether sec. 616 BGB was effectively excluded in the employment contracts.

Do employers have to pay the contractual remuneration if employees are unable to perform their work because of the school/day-care being closed?

According to the current legal situation, the employer continues to pay the salary for this case only for a relatively short period of time due to temporary inability to work in accordance with sec. 616 BGB, if this section has not been effectively excluded. It is still unclear how long this period should be (5 days or longer). According to the press conference held by the Federal Ministry of Labour and Social Affairs on 18 March 2020, sec. 616 BGB covers a longer period due to the exceptional situation of day-care and school closures. However, this has not yet been implemented into law. The inability to work does not have any disciplinary consequences if it is unbearable for the employee to continue to work after all other care possibilities have been exhausted. After the end of the period of continued remuneration covered by sec. 616 BGB or in the event of the effective exclusion of sec. 616 BGB, the basic principle applies that employers and employees must seek solutions for childcare, e.g. by setting up a working from home workplace, taking unpaid leave or annual leave.

A recently passed  law provides for state aid to be granted to employees if they suffer a loss of earnings (e.g. unpaid leave for child care) due to the closure of day-cares and schools. 67% of the net loss of income is to be paid, but a maximum of 2,016 euros net per month for a maximum of six weeks. Parents of children under 12 years of age or of children with disabilities in need of help who cannot ensure any other reasonable care for the children should be entitled to such a claim. Grandparents are not considered as a reasonable care possibility in the sense of infection protection. For the duration of the school holidays there is no entitlement to state aid.

Continued payment of remuneration during the Corona crisis

Do employers have to pay the contractual remuneration if employees become ill with Covid-19?

The general rules on continued remuneration in the event of illness apply, i.e. in the event of illness the full remuneration is continued to be paid for the first six weeks.

Are there special rules for sick leave certificates?

Yes, according to the current information and explanations of the National Association of Statutory Health Insurance Physicians (as of 24 March 2020), doctors can issue a certificate of incapacity for work for a maximum of 14 days after a telephone anamnesis. The same applies to the medical certificate for the receipt of sickness benefit in case of illness of children. However, the sick note by telephone, which is sent by post, is only possible for persons with upper respiratory tract disease.

Do employers have to pay the contractual remuneration if employees are quarantined by order of the authorities and can no longer perform their work?

This question is controversial. According to the opinion of the Federal Court of Justice in an older ruling from the 1970s and the current view of the Federal Ministry of Labour and Social Affairs, the employer must continue to pay the contractual remuneration in the case of individually ordered quarantine of individual employees, even if the employee is actually not ill. However, this only applies if the continued payment of the contractual remuneration in the case of temporary incapacity to work in accordance with sec. 616 BGB has not been excluded by collective bargaining agreement, shop agreement or employment contract. In the event of an effective exclusion of sec. 616 BGB, the employer would have to continue to pay the remuneration during the quarantine, but could have it reimbursed by the competent authority pursuant to sections 56, Subsections 5 and 6, Infection Protection Act (Infektionsschutzgesetz). Legal experts argue that in the case of an individually ordered quarantine in the event of a pandemic, reimbursement under sec. 56 of the Infection Protection Act should apply without restriction of sec. 616 BGB.

Employers should therefore check whether sec. 616 BGB was effectively excluded in the employment contracts.

What happens when employees can no longer use public transport to get to work?

If employees cannot reach their workplace due to generally ordered measures and thus cannot perform their work, they are generally not legally entitled to the agreed remuneration against their employer. This is because the employee bears the risk of reaching the company as his place of work (so-called “travel risk”). Exceptions apply if a work performance – e.g. working from home – is still possible.

Does the employer have to continue to pay the contractual remuneration if he decides to close his business or parts of it as a precautionary measure?

Yes, this entrepreneurial decision to (partially) close down a business does not result in employees losing their right to remuneration, as they are still willing to perform their work. A business closure should therefore only take place after the introduction of short-time work (for further details see “short-time work”).

Does the employer still have to pay the contractual remuneration if the business has to be closed down due to an official order and no home office is possible?

Yes. It is in the employer’s sphere of risk that its business is closed down due to an official order. This risk cannot be passed on to the employees, as they are willing to perform their work. In such a case, the introduction of short-time work is advisable.

Holidays, reduction of overtime in times of Corona

Can employees be required to use up their holidays for 2019 and 2020?

A unilateral order of company holidays against the will of the employees is only permissible to a limited extent if operational reasons make it necessary. Such operational reasons generally exist due to the significant decline in business as a result of the Corona crisis. However, it must be made possible for employees to be able to freely plan a not insignificant portion of their vacation. Thus, in case law, a proportion of 3/5 (company holidays) 2/5 (to the employee’s own disposal) of the annual leave was considered as appropriate.

Moreover, the employer cannot unilaterally order the employee to take his annual leave against his/her will. Anyone employer who does so or releases its employees from work without a justified reason, while deducting holidays, risks that these holidays have to be granted again later.

The reduction of vacation is also necessary to apply for short-time work allowance (see the topic “short-time work”).

Can the employer impose a holiday ban on employees of critical importance for the business or ask employees to interrupt their vacation?

The employer may refuse employees’ holiday requests for urgent operational reasons. A unilateral revocation of holidays which have already been granted is only possible in absolute emergencies, for example, if the absence of a particular employee would lead to existential disadvantages. Since in the current Corona crisis, employees cannot travel anyway and all leisure facilities are closed, it is very likely that the employees concerned are also willing to interrupt their vacation.

Is there a unilateral right of the employer to unpaid leave in the event of a pandemic?

No. This operational risk of the employer cannot be unilaterally shifted to the employees.

Can the employer unilaterally order the reduction of overtime?

Yes, if no other agreement exists (e.g. only financial compensation for overtime). It is generally at the employer’s discretion to grant time off to compensate overtime worked or to pay a financial compensation for it.

Can the employer oblige his employees to work overtime because of the pandemic?

Yes, if an obligation to work overtime has been agreed upon in the employment contract, shop agreement or collective bargaining agreement.

Short-time work

What is short-time work?

Short-time work is a temporary reduction in regular working hours, which is associated with a reduction in remuneration. This requires first of all an effective legal basis either in the collective bargaining agreement, a shop agreement or an employment contract.

During short-time working, the contractual working hours are reduced to a certain extent for a certain period. In order to compensate for the loss of income, employees can claim short-time work allowance if the legal requirements are met.

What is the short-time work allowance?

Short-time work allowance is granted by the unemployment insurance and can compensate for part of the loss of earnings due to short-time work in the company.

According to sections 95 et seq. of the German Social Code III (SGB III), employees are entitled to short-time work allowance if

  • there is a significant loss of work with loss of pay due to an unavoidable event (a pandemic constitutes such an unavoidable event)
  • this loss of work is temporary and unavoidable
  • a minimum number of employees in the company or a department of the company is affected (a federal government regulation has reduced the minimum number to 10% of the workforce)
  • the short-time work has been notified to the competent employment agency.

Loss of work is avoidable if it can be prevented by granting holidays and reducing working time accounts. At present, there is no clear practice on the part of the employment agencies as to the extent to which this obligation to reduce holidays should be understood. A unilateral order to reduce the full annual leave of 2020 is not permitted under labour law (see the topic on holidays). It can also be expected that employees will not be prepared to take their full annual leave for 2020 in the first half of the year.

We therefore recommend the following procedure if the introduction of short-time work is intended:

  • Company holidays of an appropriate scope (e.g. 2 weeks) can be ordered unilaterally or agreed upon with the works council.
  • Remaining leave from 2019 and working time accounts (if any) should be completely reduced (either by company holidays or by the employee’s decision).
  • In the case of holidays for 2020, it should be discussed with the individual employee whether he or she is willing to take it before the start of short-time work. If not, this refusal must be documented, e.g. directly in the agreement on the introduction of short-time work.
  • If there is a holiday list from which evidences already planned holidays (e.g. summer holidays), this list can be attached to the notification of short-time work for examination by the responsible employment agency.

The short-time working allowance amounts to 60% (without tax-free child allowance, “Kinderfreibetrag”) or 67% (with a child allowance of at least 0.5) of the net pay difference for the month in which the work was not performed, i.e. in which the employee worked short time. The net pay difference is the difference between the lump net pay (“pauschaliertes Nettoentgelt”) from the original salary (capped by the income threshold) and the lump net pay from actual salary during short-time work.

The employer must first calculate and pay the short-time allowance in advance and will be reimbursed by the competent employment agency on application if all legal requirements are met.

The form for notifying short-time work and for applying for short-time payment can be downloaded from the homepage of the Federal Employment Agency. Due to the current workload of the Federal Employment Agency, it is recommended that the notification and application should be made via the Agency’s eServices portal.

The Federal Employment Agency has a large number of worthwhile leaflets on its homepage (including current information on the Corona crisis) and detailed instructions on how to fill in notification and application forms for short-time work. The basic requirements and procedures are explained to the employer step by step.

The Federal Ministry of Labour and Social Affairs also offers a helpful summary of questions and answers on the subject of short-time work.

Which groups of employees are eligible for short-time work allowance?

Only employees who are subject to social insurance contributions are entitled to short-time work allowance. Under certain circumstances, this also applies to managing directors who are no shareholders or only minority shareholders, insofar as their employment is subject to social security contributions. The following groups of employees are not entitled to short-time work allowance:

  • Mini-jobbers (450 Euro employment contracts)
  • Working students, as far as they fulfil the working student privilege
  • Employees whose employment relationship has already been terminated or ended by a termination agreement (limited exception in the case of mass dismissals pursuant to sec. 19 Protection Against Dismissal Act (“Kündigungsschutzgesetz”, “KSchG”)
  • Long-term sick persons receiving sickness benefit.

Can short-time work be introduced for employees to varying degrees?

The working time does not have to be reduced to the same extent for all employees. The actual loss of work is decisive. In addition, short-time work does not have to be introduced for the entire company, but can also be introduced for individual parts of the company.

Can additional income be earned during short-time work?

According to a recently passed law, remuneration from another employment in systemically relevant sectors and occupations taken up while receiving short-time work allowance will temporarily not be taken into account when calculating the short-time work allowance, provided that the remuneration from the newly taken up employment together with the short-time work allowance and the remaining actual remuneration from the original employment does not exceed the level of the target remuneration. This is intended to create an incentive for employees in short-time work to temporarily take up activities in systemically relevant areas, such as agriculture or medicine, on a voluntary basis during the time off work.

Social Protection Package

What changes are there for seasonal workers who are employed on a time-marginal basis?

According to the Law on Social Protection Package, the current marginal earnings threshold for so-called “time-marginal” employees is to be raised considerably. According to the newly created sec. 115 SGB IV, a “time-marginal” employment already exists if the employment is limited to a maximum of five months or 115 working days within a calendar year according to its nature or is contractually limited in advance, unless the employment is exercised on a professional basis and the remuneration exceeds 450 Euro per month. This is supposed to take the problems of seasonal workers during the Corona crisis into consideration, particularly in agriculture.

What changes apply for pensioners?

The social protection package will raise the annual supplementary income limit for pensioners from 6,300 euros to 44,590 euros for a limited period until 31 December 2020. Income up to this level will not lead to a reduction of the pension, thus offering pensioners the opportunity and incentive to support society again, especially in the medical field.

What changes were made in the Working Hours Act?

Sec. 14 of the Working Time Act (“Arbeitszeitgesetz”, “ArbZG”) was modified. The Federal Ministry of Labour and Social Affairs, in agreement with the Ministry of Health, can issue a statutory ordinance which permits exceptions for the maximum working time and relaxing periods for a limited period of time that exceed the exceptions provided for by law and collective bargaining agreements. This applies only insofar as the exceptions are necessary to maintain public safety and order, the health care system and nursing care, public service or to supply the population with existential goods.

What changes exist for employees with children?

In order to help families affected by the Corona crisis through short-time work or other loss of income, easier access to the child benefit supplement will be introduced on April 1, 2020. For this purpose, the calculation basis will be significantly reduced. While previously the parents’ income from the last six months was decisive, now only the income of the last month before the application must be proven until 30 September 2020. This will enable more families in this crisis-related emergency situation to receive financial support.

Works council work in times of Corona

Are there any facilitations regarding the obligation to attend works council meetings?

According to the prevailing view in case law and literature, which was established before the beginning of the Corona crisis, resolutions of the works council which were passed via video and telephone conferences – i.e. without the direct presence of works council members – are invalid.

At present, no changes to the law are planned that would allow exceptions to the basic requirement for works council members to be present when resolutions are made. According to a statement by Hubertus Heil, Federal Minister of Labour and Social Affairs, dated 23 March 2020, such resolutions of the works council that were passed via a video or telephone conference are valid in view of the exceptional situation. Participation in such a “virtual” works council meeting should be confirmed by the works council members to the works council chairperson in text form, e.g. by e-mail or fax. Circular resolutions by e-mail are not permitted.

Without a respective law, there is considerable uncertainty on the part of the corporate partners as to whether the labour courts will share the Federal Minister’s view. It is therefore recommended that joint solutions be worked out with the works council. An agreement with the works council can be considered, in which it is assured that works council decisions taken in via digital or telephone works council meetings will not be challenged in court for a certain period of time and that their effectiveness will not be questioned.

What do employers have to consider when cooperating with the works council?

The statutory co-determination and participation rights of the works council continue to apply. Even in times of Corona, the works council must be consulted, for example, before any dismissal and has a right of co-determination when short-time work is introduced.

The strict written form requirement still applies to shop agreements, i.e. both parties must sign the same document personally.


Are there any facilitation for mass redundancies?

No, the legislator wants to prevent the loss of jobs and has therefore created extensive financial aid and facilitations for the grant of short-time work allowances. With regard to mass redundancies, the usual legal requirements for the duty to notify the competent employment agency when the thresholds of § 17 KSchG are met, still apply. In companies with works councils, it must be examined whether a reconciliation of interests and a social plan must be negotiated with the works council (sections 111 et seq. Works Constitution Act, “BetrVG”). These requirements also apply to mass redundancies of employees during the probationary period.

Does a closure of a business ordered by law or by a public authority justify an extraordinary termination of the employees concerned without notice?

Generally no. In such cases the employer’s operational risk is realised, which cannot be unilaterally passed on to the employee, who is not at fault for the closure of the business. Only in absolutely exceptional cases, e.g. if the employer becomes insolvent by continuing to pay wages during the regular period of notice, such a dismissal could be permissible. However, the requirements are very high and the outcome of a dismissal protection lawsuit is uncertain.

Is the decline in the order situation in the Corona crisis a reason for ordinary dismissal for operational reasons?

The considerable decline in orders can be used by the employer as a reason to make an entrepreneurial decision to reduce the workforce. The prerequisite for this is a prognosis by the employer that the jobs will be lost in the permanently. A loss of the need of the workforce for a few weeks is generally not sufficient. However, employers are not obliged to introduce short-time work before announcing redundancies for operational reasons. Short-time work is not the “milder remedy” compared to a dismissal, but an instrument to bridge the temporary loss of employment necessity.

The same general conditions apply to dismissals for operational reasons during the Corona period:

  • There must be a business decision by the employer that has led to the permanent loss of the position,
  • there must be no free opportunities for further employment, and
  • a proper social selection must have been made.

It is still uncertain how the labour courts will react to such “Corona-related” dismissals. At present, the labour courts are working according to an emergency plan, so that a court decision cannot be expected in the foreseeable future. This increases the risk of having to pay remuneration for default of acceptance if the dismissal is declared invalid. In order to avoid this litigation-risk, employers should consider whether other means of saving costs, e.g. loans and deferrals, should be considered before giving notice of dismissals for operational reasons.

General reaction possibilities of employers

What possibilities are available to employers under labor law to save costs if there is no works council and no applicable collective bargaining agreement?

The following agreements with employees may be concluded or unilateral measures ordered:

  • The obligation to continue to pay remuneration in the event of temporary inability to work in accordance with sec. 616 BGB (e.g. due to childcare or officially ordered quarantine) can be excluded in an amendment to the employment contract if the employment contracts do not provide for such an exclusion.
  • If short-time work is to be introduced, either a valid clause for the unilateral ordering of short-time work in the employment contract or an agreement with the employees concerned is required.
  • The unilateral arrangement of company holidays to a reasonable extent is permissible. If short-time work is planned, the existing vacation must generally be reduced. Since the employer cannot unilaterally order the employees to take their complete annual leave for 2020, it is helpful to document the employees’ deviating vacation requests to show the employment agency that the statutory requirements for short-time work allowance are fulfilled.

What possibilities are available to employers with a works council under labour law to save costs?

Shop agreements can be concluded with the works council to exclude sec. 616 BGB, introduce company holidays and short-time work.

It is also advisable to conclude a shop agreement on pandemics.

(27 March 2020)