Germany to Extend Short-Time Work Benefits to Address Economic Challenges
The government plans to double the duration of Kurzarbeitergeld to 24 months to mitigate job losses and stabilize the workforce during the economic downturn.
- Federal Labor Minister Hubertus Heil announced plans to extend Kurzarbeitergeld, a short-time work benefit, from 12 to 24 months, effective January 2025.
- The extension aims to prevent mass layoffs and support companies facing reduced workloads, particularly in industries like manufacturing and automotive sectors.
- Volkswagen, a major employer, is under financial strain, proposing wage cuts and threatening layoffs; the government hopes the measure will protect jobs at such firms.
- The policy is expected to cost the Federal Employment Agency an additional €260 million but could reduce unemployment benefit expenditures in return.
- The extension does not require parliamentary approval and is set to be finalized by the cabinet next week, with the regulation lasting until the end of 2025.
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