Continued Payment of Wages in the Case of Closure of Childcare Centres and Schools - New Legislative Regulation

In almost all companies, the effects of the closure of childcare facilities and schools are being felt. Parents have to look after the children at home because the grandparents belong to the risk group and, for once, cannot help with the care. In HR departments, the question therefore arises as to how long parents do not have to work because of childcare and what effect childcare has on earnings.

The legislator has recognised the problem and - subject to the approval of the Bundesrat (federal council) - has now initiated a solution in the form of a new regulation of section 56 of the Infection Protection Act (IfSG) (Bundestag (federal parliament) printed matter 19/18111): The IfSG includes a compensation claim for loss of earnings in the event of official closure of schools and childcare centres, initially limited until the end of the year. This is intended to reduce the loss of remuneration suffered by parents for the duration of care for children up to the age of 12.

To trigger the right to compensation, there must be no other care options or possibilities of paid leave, e.g. by reducing working time credits and probably also remaining holiday credits. The first prerequisite is, thus, a real loss of income due to childcare. However, for periods in which the childcare centre or school would not have been open anyway due to holidays, there is no entitlement to continued payment of the remuneration. Recipients of short-time work compensation will not receive any compensation on the basis of the new regulation. The compensation does not completely offset the loss of remuneration but is based on the increased benefit rate of the short-time work compensation: For the maximum period of six weeks, affected employees receive 67 percent of their net income (capped at EUR 2,016 per month). As is customary under the Infection Protection Act, the procedure is carried out in two steps: First, the employer makes an advance payment and pays the 67 percent to the employee. In the second step, he has the amount reimbursed by the competent authority.

Conclusion

Up to now, the question of the continued payment of remuneration for periods of childcare has been regulated by an individual case law on section 616 of the German Civil Code (BGB) which is particularly complex. Reliable statements were hardly possible and employers and employees were confronted with considerable legal uncertainty. Moreover, in the case of school closures lasting several weeks, the provision of section 616 BGB would not have helped anyway, as its application is limited to a few days. Hence, it is positive that no attempt was made to extend the scope of section 616 BGB in the first place. This approach would have only added to the financial burden on employers in an already tense situation. The solution now created regulates clear conditions of entitlement and does not lead to additional financial burdens for employers. The fulfilment of the prerequisites for entitlement must be proven by the employee at the employer's request.

Statutory requirements as to form and time limits with regard to refund applications are currently not yet known. It remains to be seen whether the already known procedure for reimbursement in case of quarantine orders will be adopted. In this case, applications for reimbursement would have to be submitted to the competent federal state authority within three months. In this context, it should also be examined how any arrangements within the company for paid leave for childcare affect the reimbursement claim. Such arrangements could be found in the collective agreement, a works agreement or the employment contract.