A specialist article by Christian Rolf, labor law partner at the law firm McDermott Will & Emery in Frankfurt.
When the coronavirus pandemic abruptly slowed much of the economy in 2020, the federal government approved financial aid worth billions. To make ends meet in times of no orders and closed businesses, many companies applied for part-time work benefits, which the federal government at the time generously expanded. What some employers didn’t know: At the time, the Federal Employment Agency only provisionally approved the short-term subsidy, as there was no other option in spring 2020 due to the high number of bottleneck applications. related to the pandemic in capacity. part of employment agencies. To this day, the agencies verify whether the payments were legal and now surprise some with refunds.
The provisions on part-time work in the Social Security Code (SGB III) are not necessarily user-friendly. If you are not familiar with the application and the requirements, you can easily make mistakes. Companies have the right to advice from the Employment Agency. At the height of the pandemic, however, the agency was so overburdened that employees more or less passed on applications without detailed counseling or vetting.
Important here: in order to keep the money flowing quickly, the agency usually approves the part-time work subsidy promptly, but always with reservations. This means that you can and should check later if the money has been granted correctly.
What does that mean for companies?
Unlike unemployment benefits, part-time work benefits are not paid directly to employees. Rather, the company acts as trustee and transfers the calculated amount to the employees as an advance. The Employment Agency reimburses the monthly payments at start-up, which means that the employees are paid in advance.
Since the employment agency has only provisionally issued the (monthly) notices for approval of part-time work, you can later correct the notices and claim part-time benefits from employers quite easily.
The company calculates the amount of short-time benefit itself. The employment agency first checks if it seems plausible and then usually pays the amounts (provisionally) within 15 days. Only after the end of the short-term work does the agency take a closer look: only much later does it check whether interim approvals or payments can be maintained, or whether they need to be changed. This means then: if managing directors incorrectly applied for part-time allowance or were not allowed to receive it at all for their employees, corrections must be made.
If the startup has basically calculated the number correctly, usually only the number of reduced work days is corrected. The employment agency usually fixes this by making up the difference with the next refund.
But if the calculation of the short-time allowance is not correct and the company has paid too much to the workforce, things get more complicated. The employment agency can then claim the start-up amount, which then faces the question: Can the founders get reimbursed for the excess money from the workforce? Or are they left with a loss?
What is strictly legal?
From a purely legal point of view, the thing is clear: since the subsidy for reduced work is only granted to the company on a temporary basis, the workers only receive it as an advance payment. If an approval notice is corrected, team members must therefore return any excess reduced-time assignments received; the employer can offset this against the employee’s claims up to the garnishment exemption limit.
If the overpayments are not so dramatic or the recovery is associated with imponderables, the company may decide to waive the payment, for example, to avoid bad moods among the workforce. However, it should be noted that the worker does not retain the net overpayment because it gives rise to a tax advantage as soon as the company decides not to claim the payment. In concrete terms, this means that if a person receives part-time work benefits of EUR 5,000 in a year, for example, he is tax-free as a so-called salary replacement benefit; however, it is subject to the progression clause, so it can lead to a higher tax rate over a longer period of time. If this person is allowed to keep the overpayment, the amount is considered a regular salary payment; then the salary tax must be paid, at an average tax rate of around 21 percent, that is, around 1,000 euros.
What if the employees are no longer on board?
Things get a bit more complicated when employees have left the company. The employer can no longer offset the excess money paid with ongoing wage payments. Rather, the new companies would have to sue the deceased for payment in labor court. This can be tedious and economically questionable, for example, if there is nothing to gain from the employees. The following also applies here: If the company decides not to claim the refund, it must inform the tax office because this can also result in a tax advantage for the employee.