Due to the current corona pandemic and the resulting consequences for entrepreneurs, new questions of labour and contract law as well as tax issues often arise with serious implications for companies and employees.

We have therefore compiled a list of relevant topics for you:

Due to the downturn in the economy as a whole, numerous companies are faced with the problem of under-utilisation of existing employees.

Employers have the possibility to release employees and demand the reduction of overtime.

However, it is not possible to order unilateral leave or unpaid leave.

Short-time work compensation

 Irrespective of the Corona pandemic, employers have the option of applying for short-time work in consultation with employees. The conditions for the approval of short-time work benefits have been significantly reduced by an emergency law, which is limited until 31 December 2021:

  • The percentage of employees employed in the company who must be affected by the loss of working hours has been reduced to up to 10%.
  • There will be no partial or complete accumulation of negative working time balances.
  • The receipt of short-time work compensation has been extended to include temporary workers.
  • Social security contributions are fully reimbursed by the Federal Employment Agency.

When applying for short-time work compensation, it must be noted that the company must pre-finance the liquidity required. Both the pro-rata salary and the short-time working allowance are accounted for in payroll accounting and paid out to the employee. The reimbursement by the Federal Employment Agency is delayed.

The deadline for applying for short-time work compensation ends at the end of the month for which short-time work compensation is first applied for. The deadline for applying for short-time working in March is 31 March 2020.

Please contact us immediately if necessary.


Due to the current situation, companies should also consider how temporary liquidity shortages can be bridged.

Liquidity can be created at short notice by deferring taxes due. Due to the corona pandemic, tax authorities are being urged to defer taxes initially without interest as long as sales have collapsed as a result of the pandemic.

In case of a loss of operating revenues, we prefer to reduce tax prepayments from the 2nd quarter of 2020 onwards (trade tax as of 15.05.2020/income tax as of 10.06.2020). A corresponding consultation can take place in the course of April, if the effects of the Corona pandemic on the respective company are reflected in figures.

The KfW-bank has also reacted to the current economic development and is easing the conditions of access for entrepreneurs as well as the terms and conditions, especially for working capital loans.

Details of the regulations are not yet available to us.

Liquidity should be strengthened by extending the repayment of current liabilities.

 „We are taking all necessary measures to protect employees and companies. Everyone can rely on that.“

– Olaf Scholz, Federal Minister of Finance