UPDATE: Coronavirus pandemic – can employers receive compensation for labour costs pursuant to the protection against infection act? in addition to short-time work allowance?

27. March 2020

Coronavirus pandemic – What about compensation pursuant to the Protection against Infection Act?

Employers and employees are desperately looking for ways to buffer and financially compensate threatening or existing losses of working hours. At first glance, claims for compensation for loss of earnings pursuant to Section 56 Protection against Infection Act (Infektionsschutzgesetz – IfSG) may be considered, as can be read on many occasions these days

But does this basis for the claim apply in connection with the losses of working hours due to the Coronavirus pandemic? A classic example of “it depends”.

Subjective hindrance of performance of the employee

To begin with, it is clear that compensation pursuant to Section 56 IfSG can be claimed, “if any germ carrier or any person who is suspected of being contagious or is suspected of being ill or is otherwise a carrier of pathogens and is subject or subjected to prohibitions affecting the pursuit of the occupation engaged in up to that date and consequently suffers a loss of earnings“. So, the person affected must subjectively be inhibited from providing his work performance, for example if he received an official disqualification from commercial activities due to testing positive for the Covid-19 virus.

Officially ordered closure of companies

However, matters are different if – as has been the case since yesterday – entire companies have to close due to an official order for precautionary measures, without there being specific grounds for suspecting an infection of employees. In case employees can no longer be occupied due to such a closure of company, the wording of Section 56 IfSG does not justify a claim for compensation for loss of earnings.

Yet considering its normative purpose, an extended application of Section 56 IfSG to these cases of companies’ precautionary closures pursuant to Section 28 IfSG could also be discussed. In light of the current health crisis, many voices who do not want to subsume the Coronavirus pandemic under the employer’s general operational risk rightfully argue for such an extended application. Political pressure to interpret the norm generously will increase accordingly.

We therefore advise to assert claims for compensation pursuant to Section 56 IfSG despite the inconclusive legal situation.In addition to short-time work allowance! Such an application cannot have a negative impact on the employer – aside from the administrative burden. In particular, there are no objections to claim compensation pursuant to the IfSG in addition to the currently much discussed short-time work allowance. These claims do not exclude one another but coexist. Section 56 Para. 9 IfSG explicitly stipulates that the employer’s possible claim for compensation is transferred to the Federal Agency of Employment insofar (and only to the extent) as it grants short-time work allowance for the same period of time. Such a regulation would not be necessary if both claims excluded one another.

Voluntary closure of company by the employer

Coming back to “it depends” one more time: the situation differs again if the employer closed the company voluntarily – that is, without official orders. No disadvantages from the application for compensation pursuant to the IfSG are expected in that case either, but at the same time chances for success of such an application are, in our opinion, disparately lower, as the claims for compensation always require official orders.


UPDATE: Claims for compensation due to closure of day care centres and schools

The question whether employees can make a claim for compensation due to the closure of companies still remains unanswered. Yet in the meantime, the legislator has filled another gap: He intends to add a Para. 1a to Sec. 56 to the Protection against Infection Act, which will allow for compensation for losses of earnings due to the officially ordered closure of day care centres and schools. For many families in Germany, this closure of schools and day care centres raises the question of childcare options, often resulting in the parents’ prevention from performing their work. In the future, working parents can receive compensation of 67 % of their monthly net income (up to 2,016 euros) for up to six weeks – provided that they must take care of children under the age of 12 and all other childcare options as well as their overtime or flexible working hours balances have been exhausted. The disbursement will be handled by the employer, who can submit an application for reimbursement to the appropriate state authority. The amendment is based on the “law for the protection of the population during an epidemic situation of national magnitude”, which was adopted by the German Bundestag on 25 March and is supposed to pass into law by the end of March.


Your contact persons:
Dr. Andrea Panzer-Heemeier, Managing Partnerin
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