SELECTED REGULATIONS IN GERMANY DUE TO THE COVID-19 PANDEMIC (APRIL, 2 2020)

1. Are salaries still to be paid in the event of illness and / or quarantine?

The employer will continue to pay the salary. The employer will then be entitled to reimbursement of the sums used for the continued payment of wages. Should, contrary to expectations, the employer not pay, the employee is entitled to compensation from the competent authority (according to Section 56 of the Protection against Infection Act (IfSG)). In the first six weeks, this compensation will correspond to the net salary. After this period, the employee will receive the amount he would receive as sick pay.

In the event of illness, there are no deviations from the other legal regulations. According to the Entgeltfortzahlungsgesetz (EFZG), the employee is entitled to continued payment of the wages for 6 weeks; the health insurance then pays part of the net wages.

2. May employees stay away from work / work from home?

Employees do not have a general right to stay away from work during an outbreak of illness such as COVID-19. Employees would only be entitled to refuse to work if they cannot reasonably be required to perform their work. The condition of unreasonableness is met if, for example, the work poses a significant objective risk to the employee’s health, or if there are at least objective grounds for a serious suspicion that such a risk exists. The mere fact that colleagues have a cough, without further objective grounds for suspicion or indications that a risk exists, will probably not be sufficient to meet this condition.

There is no statutory entitlement to work from home. However, employees can do so if their employer agrees. Working from home might also be available as an option on the basis of a firm-level agreement or a collective agreement.

3. The German short-time working model

If the coronavirus causes supply bottlenecks or if the authorities order closures, forcing companies to limit or stop production, this can lead to an entitlement to the short-time allowance for the employees affected.

Companies which want to apply for the short-time allowance must first notify the local Employment Agency (Agentur für Arbeit) about the short-time work.
Under no circumstances can short-time work be ordered unilaterally by the employer. An company agreement with the works council or an agreement with each individual employee is required. The local Employment Agency examines whether the conditions for granting the short-time allowance are met on a case-by-case basis. The short-time allowance can be granted for up to twelve months. It is paid at the same level as unemployment benefit and compensates for 67 or 60 per cent of the net pay lost as a result of the short-time work.

4. What protective measures at work must the employer take?

Under the Safety and Health at Work Act (Arbeitsschutzgesetz), employers have a fundamental obligation to assess the risks to the safety and health of their employees in the workplace (risk assessment) and take measures based on this assessment. In the framework of pandemic preparedness (civil protection), employers have to identify and take additional measures where necessary.

5. supplementary budget and Economic Stabilisation Fund 

a) Immediate assistance for small enterprises

Immediate financial assistance (grants) for small enterprises with up to 10 employees is granted to all industries and to own-account workers and freelancers (full-time equivalents). The programme has a volume of up to €50 billion. More specifically, there will be

• one-off payments of up to €9,000 over a period of 3 months for businesses with a maximum of 5 employees (full-time equivalents),
• one-off payments of up to €15,000 over a period of 3 months for businesses with a maximum of 10 employees (full-time equivalents).

The grants intended are to secure the economic survival of applicants, as the immediate assistance can be used to cover costs, including rents, loans for operating expenses and leasing instalments. The one-off payments do not need to be paid back. 

b) Additional liquidity assistance for enterprises

In addition to immediate assistance for small enterprises, there are comprehensive loan programmes for companies. KfW’s (Kreditanstalt für Wiederaufbau) new 2020 Special Programme was launched on 23 March 2020, and the bank has accepted applications since that date. Numerous firms have already applied for loans. KfW has already received applications for loans totalling around €7.4 billion.

Small, medium-sized and large businesses can benefit from KfW’s 2020 Special Programme. The terms of the loans have once again been improved. Lower interest rates and simplified risk assessment by KfW for loans of up to €10 million are further facilitations for firms.

In addition to loans, enterprises can also make use of the instrument of guarantees via the guarantee banks. Guarantee banks can grant fast-track guarantees of up to €250,000 within 3 days on their own, i.e. without involving the Federal States. 

c) Economic Stabilisation Fund

Small enterprises are particularly hit by the crisis, but large companies and the real economy as a whole are also increasingly facing difficulties. For this reason, there has been adopted the Economic Stabilisation Fund. The Economic Stabilisation Fund has a volume of about €600 billion, thereof

• €400 billion for state guarantees for obligations
• €100 billion for direct state holdings
• €100 billion for the refinancing of large KfW loans.

The Fund’s support measures also apply to systemically relevant small enterprises and firms in the field of critical infrastructure, and to start-ups which have been valued by private investors with a company value of at least €50 million in at least one concluded financing round since 1 January 2017, including the capital received in the course of that round.

6. What are the consequences if, due to the economic situation, rents cannot be paid?

Tenants and tenants cannot be terminated for the period from April 1 to June 30, 2020 due to failed rental payments due to the COVID 19 pandemic. The rent remains due for this period; default interest may also arise. Rental debts from April 1 to June 30, 2020 must be paid by June 30, 2022, otherwise the tenants can be terminated. In the event of a dispute, tenants must demonstrate that the failure to pay the rent is due to the effects of the COVID-19 pandemic.

7. What changes are there in bankruptcy law?

The liability-enforced and in some cases also criminal-enforced three-week insolvency applications will be temporarily suspended until September 30, 2020. This only applies to cases where the insolvency or overindebtedness is due to the consequences of the COVID-19 pandemic. Managers are only liable for payments to a limited extent during the suspension of insolvency application obligations. Services to contractual partners during the suspension can only be challenged to a limited extent. The ability of creditors to enforce bankruptcy proceedings through bankruptcy applications is limited to three months.

8. What does "contact restriction" mean for people, for example in Berlin?

No hard curfew – but rather a "contact restriction": On Sunday, 22 March, the federal and state governments decided on further measures to stop the spread of the coronavirus; the Berlin Senate largely followed the consensus and implemented tough rules. Due to the federal order, every federal state in Germany is responsible for this.

In the future, Berliners are to stay "permanently in their flat or current accommodation". The new rules are valid until 5 April for the time being.

It is still allowed to go outside at all, but only in the following cases:

• to get to work, which includes volunteering
• for shopping
• for sports activities - but only alone, "with members of your own household" or another person
• for walking and gardening
• when visiting life partners, the elderly, sick or people with disabilities
• for death care and funerals in the immediate family circle
• for accompanying persons in need of assistance and minors
• for leaving and returning to Berlin – but only on a direct route from and to your home or accommodation
• for visits to the doctor and to old and sick people
• for official or court appointments that are urgently required

In all cases, an identity card or other official photo identification (but then additionally with documentation of the residential address) must be carried at all times. There may be checks by the police and other authorities.

9. Boder controll

The following principles apply to persons entering Germany by land, air or sea from Italy, Spain, Austria, Switzerland, France, Luxembourg or Denmark

• German citizens are not subject to any restrictions on entry. They are allowed to enter Germany.
• Those who are not German citizens may enter Germany under the following conditions:
• for work purposes or to carry out professional contractual services (including commuters, medical and health care workers, members of the European Parliament and accredited diplomats). In such cases, the need to cross the border for work must be proved by carrying appropriate documentation (e.g. work contract, project contract/documents, permit for frontier workers).
• for other urgent reasons requiring entry (including medical treatment, the death of an immediate family member) depending on the individual circumstances. Entry for purposes of tourism is no longer allowed.
• for persons returning to their home or legal residence in Germany.
• for transit through Germany to return to one’s home country if no other travel connection is possible. 

The following principles apply to persons entering by air or sea from non-EU countries:

• German citizens are not subject to any restrictions on entry. They are allowed to enter Germany.
• Citizens of EU member states and their families, as well as citizens of the United Kingdom, Iceland, Liechtenstein, Norway and Switzerland and their families are allowed to travel through Germany to reach their home country if no other travel connection is possible. They will also be allowed to enter if their home or legal residence is in Germany.
• Persons who are not EU citizens who have a long-term right of residence (residence permit or long-term visa) in an EU member state or the United Kingdom, Iceland, Liechtenstein, Norway or Switzerland and their families are allowed to travel through Germany to reach their home country if no other travel connection is possible. The same applies to holders of a German residence permit or long-term visa whose home or legal residence is in Germany.
• Persons who are not EU citizens and who have no long-term right of residence are not allowed to enter unless they have an urgent reason to do so. Entry for purposes of tourism is no longer allowed.