The German government has confirmed that companies in Germany can continue receiving short-time work benefits (Kurzarbeitergeld) for up to 24 months until December 31, 2026. While the 24-month maximum already existed, it was set to expire at the end of 2025, which could have limited businesses’ ability to maintain short-time work (Kurzarbeit). The new cabinet-approved regulation ensures companies with a current benefit period of twelve months or more can thus continue short-time work beyond December 31, 2025, offering both employers and employees much-needed planning security amid ongoing economic, trade, and geopolitical uncertainties.
Federal Labour Minister Bärbel Bas (SPD) explained that the extension allows companies to plan for the months ahead while maintaining their workforce. Short-time work reduces employees’ working hours during periods of low demand, allowing companies to adjust production without resorting to layoffs. The freed-up time can also be used for employee training and professional development, helping staff adapt to future changes in the labor market, including digitalization and AI advancements.
IG Metall Chairwoman Christiane Benner emphasized that short-time work benefits provides a crucial safety net for employees. She stated that the regulation ensures security in uncertain times and allows employees to maintain income while protecting company structures. Many workers, she added, would confirm that Kurzarbeit helps safeguard both jobs and operational stability.
Kurzarbeit has repeatedly proven effective during economic crises, including the COVID-19 pandemic. By continuing this program, companies can avoid layoffs, retain trained staff, and resume production quickly when economic conditions improve. Employees benefit financially, with childless workers receiving 60% of lost net income, and employees with at least one child receiving 67%, ensuring partial income replacement during periods of reduced work.
The extension also allows businesses to use reduced working hours for training and upskilling programs, strengthening the workforce for future challenges. Companies can maintain productivity potential while preparing employees for structural transformations in the economy.
By extending the availability of Kurzarbeit, the German government provides a reliable alternative to layoffs, ensuring workforce stability, income protection, and readiness for future economic developments.
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