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Germany extends support for pandemic-hit companies into mid-2021

The German government said Friday it was extending its loan scheme for pandemic-hit companies into mid-2021 and boosting support for self-employed workers during the crisis.

Published: 6 November 2020 18:36 CET

Germany extends support for pandemic-hit companies into mid-2021

Frankfurt's skyline, where many banks and other companies are based. Photo: DPA

The aid programme allows companies to apply for state-backed loans of up to 25 percent of last year's turnover for a maximum of €800,000, provided by the state-owned KfW bank.

The scheme has been a lifeline for the country's army of small and medium-sized companies, many of which were forced to temporarily shut down at the height of lockdowns in the spring.

The programme, now extended until June 30th, 2021, will also be expanded to include self-employed people and companies with up to 10 employees.

“The effects of the corona pandemic are greater and longer than we expected and hoped,” Economy Minister Peter Altmaier said in a statement.

READ ALSO: What closes and what stays open across Germany's states during lockdown?

“In this serious situation we are not leaving our companies and their employees alone.”

The KfW has already received more than 95,000 requests for the coronavirus aid, amounting to some €46 billion in loans.

The usually frugal German government unleashed an unprecedented rescue package in March to shield Europe's top economy from the pandemic fallout, pledging more than a trillion euros in support for firms and workers.

With the country now battling a second coronavirus wave, Berlin recently extended its “Kurzarbeit” short-time working scheme for a total of 24 months to help save jobs.

The government has also promised an additional €10 billion in support specifically for businesses smarting from a new round of restrictions this November, like restaurants, bars, cultural and leisure centres.

The affected businesses will be able to apply for compensation of up to 75 percent of their takings from November 2019.

The measures come as Germany on Friday notched up a record number of daily Covid-19 cases, adding another 21,506 cases to bring the total to 619,089 since the start of the pandemic.

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Four steps to take straight away after losing your job in Germany

In times of economic downturn, layoffs are far from unusual – but that doesn’t make it any more difficult for the people who find themselves suddenly left without work.

For foreigners in Germany, the situation is even more frightening. You may wonder whether your residence status is in jeopardy, how hard it will be to find another position, and whether you can support yourself while you look for another job.

Though it may be hard to think clearly at a time like this, following these four simple steps will set you in good stead to move forward – and hopefully, it won’t be long before another dream opportunity comes your way.

1. Negotiate your terms

Before signing or agreeing to anything, it’s crucial that you’re familiar with your rights and understand how much notice your employer has to give you and what kind of settlement you may be owed.

Generally, the rule of thumb is that you get half a month of severance for every year you worked at the company. That said, higher settlements can be negotiated in return for signing a termination agreement (Aufhebungsvertrag), so you may want to seek legal advice before settling.

Even during a probationary period, your employer will also have to give you a certain amount of notice before your last working day. During the interim, you can either work for the company or be put on what is known as gardening leave in English, where you stay home but are paid as if you were working.

This can all be negotiated as part of a termination agreement, so you should think carefully about what works best for you and consider speaking to your labour council (Betriebsrat) or a legal specialist before making any firm decisions. You should also be aware that you have no obligation to sign any agreement and can legally dispute the layoff if you want to.

READ ALSO: Can I get unemployment benefits in Germany if I quit my job?

2. Get all the necessary documents from your employer

Once the terms of the layoff are final, ensure that your employer gives you all the necessary documents you need to navigate the next phase of German bureaucracy.

The main two to think about first are the confirmation of work (Arbeitsbescheinung) and the confirmation of your holiday entitlement (Urlaubsbescheinigung).

The first can be sent to the Agentur für Arbeit (jobcentre) as proof of your last job and recent layoff, while the second will help your next employer calculate your vacation days for the rest of the year.

An Arbeitszeugnis, or German letter of reference

An Arbeitszeugnis, or German letter of reference. Photo: picture alliance/dpa/dpa-tmn | Zacharie Scheurer

On top of these documents, you’ll want to ask your employer for a letter of reference (Arbeitszeugnis), which is useful for finding a new job in Germany.

You should also keep hold of your last payslip and statement of earnings (Lohnsteuerabrechnung), which are helpful for tax purposes and may also be requested by the Agentur für Arbeit.

Speaking of which…

3. Register as unemployed with the Agentur für Arbeit

As soon as you know that you are soon to be unemployed, you should register as a jobseeker with the Agentur für Arbeit. To get full unemployment benefits, you usually have to do this within three days of receiving your termination notice or at least three months before leaving.

Depending on what type of residence permit you’re on, you may or may not be entitled to long-term unemployment benefits (ALG II), but most employees are able to get unemployment insurance (ALG I), which covers a proportion of your former salary while you look for a new role.

It’s important to be a little bit careful here, as claiming long-term unemployment benefits (ALG II) can affect any future citizenship applications. Any severance pay you agree to can also result in you losing some months of unemployment benefits, so these are all factors you will have to consider while deciding on the best way forward.

READ ALSO: What happens to your work permit if you lose your job in Germany?

4. Inform the immigration office

If you’re on a residence permit that is linked to your job in some way, like a Blue Card or work visa, you’ll need to inform the immigration office about your change in circumstances as soon as possible.

This should be done in writing, and in German, within two weeks of receiving your termination notice.

You should include all relevant personal information, such as date of birth, residence permit type, and nationality, as well as the date of your final day at work. As proof of the layoff, you should also enclose a copy of your termination agreement or a letter from your employer.

People enter the immigration office

For foreigners who move to Germany and settle in Berlin, a visit to the Berliner Landesamt für Einwanderung (LEA) is ultimately unavoidable. Photo: picture alliance/dpa | Britta Pedersen

In most cases, the immigration office will give you between 3 and 12 months to look for a new job. If they give you a shorter period, be aware that you may be able to negotiate an extension later on if you are struggling to find work through no fault of your own.

Above all, stay positive. Though it may feel like one door has closed, another one is sure to open. This being Germany, you may just have to wade through a sea of paperwork to get there.

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