Short-time work in construction: Why it is so important now and how you can use it strategically
Short-time work in construction – what is it all about and why is it particularly relevant now?
We all in the construction industry know this: Sometimes business is booming and at other times there are unpredictable fluctuations, whether due to weather or because the economy has taken a hit. It is precisely in such times that short-time work in the construction industry becomes a truly important tool. Simply put, short-time work (often called short-time allowance or Kug) allows you as a company to retain your valuable employees even during temporary work shortages, instead of having to think about layoffs right away. This not only safeguards jobs but also retains know-how within the company – and that is worth its weight in gold. The current order situation in the construction industry 2024 makes it clear: Flexibility and a good plan are essential. The short-time work in the construction industry is also so important because it allows us to respond to sudden shocks such as interrupted supply chains or unexpected order cancellations without having to reduce the workforce immediately. And let’s be honest, in an industry that is so heavily affected by the shortage of skilled workers in construction it is crucial to keep qualified personnel on board during times of skill shortages. At Valoon GmbH, we know from experience how critical efficient processes are to cushion such crises. Our solutions for better communication and optimized project management can help you maintain stable workflows even in turbulent times. This might reduce or at least help manage the need for short-time work in the construction industry layoffs more effectively.
- Employee retention: Keeps valuable employees despite temporary work shortages in the company.
- Knowledge preservation: Preserves important expertise within the company.
- Crisis response: Allows quick reactions to unforeseen events like supply chain issues or order cancellations.
- Retention of skilled workers: Is crucial for retaining qualified personnel during times of skilled labor shortages.
But don’t see the short-time work in the construction industry as just an emergency brake! It can also be a strategic move to cleverly bridge phases with fewer orders. This way, you can manage lean periods without having to forgo your established teams – because training new employees takes time and money, as we know. The short-time work in the construction industry has various models and supports available for this. It is clear, however, that the decision for should be well considered and should always be based on a precise analysis of your operational situation and the general development of the construction industryis essential. It is crucial that the work shortfall is really only temporary and that you have tried everything to avoid it.
Laws and regulations – you have to navigate through them!
If you want to short-time work in the construction industry take advantage of it, there is no way around the legal framework – it is clear. The main point here is the Social Code (SGB) III, so to speak the Bible for short-time allowances in Germany. It specifies who gets how much and for how long under what conditions. Specifically for us in the construction industry, there are also important regulations in the Federal framework collective agreement for the construction industry (BRTV-Baugewerbe), because our sector has its peculiarities. Just think of working time accounts or notice periods for short-time work in the main construction sector. And very importantly: Always keep an eye on current regulations! Especially in times of crisis, like we experienced during Corona, things can change quickly to facilitate access to short-time work or improve conditions. Knowing these regulations precisely is really crucial for ensuring your applications go through smoothly and you do not inadvertently fall into the known risks in the construction industry due to incorrect processing of the short-time work in the construction industry lead.
- Social Code (SGB) III: The central legal basis for short-time allowances in Germany.
- Federal framework collective agreement for the construction industry (BRTV-Baugewerbe): Contains industry-specific regulations for the construction sector.
- Current regulations: Be aware of possible short-term changes, especially in times of crisis.
- Precise knowledge: A thorough understanding of the regulations is crucial for successful applications and to avoid risks.
Seasonal Kug or cyclical short-time work – what is what?
When we talk about short-time work in the construction industry short-time work, we must absolutely distinguish between seasonal and cyclical short-time work. The seasonal short-time allowance (S-Kug) is known to many of you – it is specifically designed for the bad weather period, typically from December to March. It is a huge help for companies in the main construction sector, scaffolding, roofing, and landscaping to bridge weather-related downtimes. The . On the other hand, we have cyclical short-time work. This comes into play when the economy is weak and it is not necessarily due to the weather. It could be due to a lack of orders due to a recession or if unforeseen issues like material shortages disrupt operations. This type of short-time work in the construction industry usually applies from April to November, if the conditions for S-Kug are no longer met. Both have different requirements and application processes – so one should really familiarize themselves well to get everything right.Entitlement to short-time work in construction: Who gets it and what must you prove?
Who is even entitled? A closer look is worthwhile.
Let’s be honest: Not every company and not every employee can simply receive benefits from the short-time work in the construction industry short-time work allowance. First and foremost, it is primarily companies in the main construction sector, scaffolding, roofing and landscape gardening that have good chances here – especially for seasonal Kug. short-time work in the construction industry There is one fundamental requirement: Your affected employees must be subject to social insurance This means in plain terms: There is usually no short-time allowance for mini-jobbers or marginally employed people, as they do not pay contributions to unemployment insurance. The situation is different for apprentices; they often have the right to their full training compensation for a certain period (e.g. six weeks) before the short-time allowance kicks in. And then there is the criterion of significant loss of work. Normally, at least one third of your workforce must be affected by a wage loss of more than 10 percent of their monthly gross salary. But caution: This threshold can change due to current regulations – during Corona, for example, it was temporarily lowered to 10% of employees. So always check the exact short-time work requirements for your specific case of the short-time work in the construction industry.
Demonstrating the work shortfall – but do it right!
To ensure your application for short-time work in the construction industry goes through, you must clearly demonstrate and substantiate the work shortfall. The reasons must be either of an economic nature (i.e. lack of orders, cancellations due to increased construction costs, or due to customers facing financing problems, or significant supply shortages for construction materials) or based on an event that you simply could not avert. Simply saying ‘things are going poorly’ is not enough – you need solid evidence. Furthermore, you must show that the work shortfall is only temporary. Your company must be able to demonstrate a perspective that things will soon improve with orders or that the disruptions are resolved and what plans you have to start up fully again (e.g., obtaining new contracts, exploring new business areas). And finally, very importantly: the inevitability of the work shortfall. The employment agency closely monitors whether you have really done everything reasonable to prevent the short-time work in the construction industry loss of work. This includes reducing overtime, using working time accounts (i.e., building up negative hours), granting leave (taking into account the wishes of your employees), and perhaps even temporarily transferring employees to other, unaffected areas of your business. All these efforts must be meticulously documented – this is the basis for your application to the short-time work in the construction industry.
Why is the effort in preparation worthwhile? Simply put:
Top preparation and thorough documentation bring you tangible advantages:
- Faster approval: Certainly, clear, complete, and plausible applications are processed faster.
- Fewer annoying follow-up questions: If your evidence is correct, there will be less need for clarification with the employment agency.
- More legal certainty: Those who comply with all requirements minimize the risk of something being questioned later or even leading to repayment claims.
Applying for & calculating short-time work: Master the paperwork step by step
Let’s get started: Properly report the work shortfall
The first step on the way to the short-time work in the construction industry is the formal notice of the work shortfall to your responsible employment agency. Very important: This notice must be in writing and must reach the agency within the month in which the short-time work is to start for the first time. If you are too late, it may happen that you will only receive short-time allowance from the following month – that would be annoying. In the notice, you must, in dem die Kurzarbeit zum ersten Mal starten soll. Sind Sie zu spät dran, kann es passieren, dass Sie erst ab dem Folgemonat Kurzarbeitergeld bekommen – das wäre ärgerlich. In der Anzeige müssen Sie precisely justify why the work shortfall exists and credibly demonstrate that you meet the requirements (see above). This also includes laying out the economic causes and the inevitability. And remember your employee representation: If there is a works council, you usually need a works agreement for short-time work. Without a works council, individual consent statements from your affected employees are needed, unless the opportunity for short-time work is already regulated in the employment contract. The usually has good FAQs ready. Take your time with these documents, as careful preparation is invaluable for the quick processing of your application for short-time work in the construction industry. The correct handling of the short-time work in the construction industry begins here.
- Timely notice: The written notice of the work shortfall must reach the employment agency in the same month the short-time work begins.
- Detailed justification: Credibly lay out the causes of the work shortfall and the fulfillment of the requirements (economic reasons, inevitability).
- Involve employee representatives: A works agreement or individual consents from employees are required.
- Thorough preparation: A thorough compilation of documents speeds up the processing of the application.
How is the short-time allowance actually calculated?
The calculation of the short-time allowance (Kug) for the short-time work in the construction industry sounds complicated at first but is based on the so-called net pay differential.This is, simplified, the difference between the flat-rate net pay your employee would have received without the work shortfall (target pay) and the flat-rate net pay for the actual hours worked (actual pay). From this differential, there is generally 60 percent as short-time allowance.If the employee has at least one child in the household, the rate increases to 67 percent.As we remember, there were also times, for example during the Corona pandemic, when these rates were gradually increased (e.g., to 70/77% from the fourth month and 80/87% from the seventh month of short-time work), as it was also . So always check the currently valid regulations! The short-time allowance itself is tax-free, but beware, it is subject to the progression reservation.This means it is counted when calculating the tax rate for the rest of the income and can thus lead to a higher tax debt. The exact calculation of seasonal short-time allowance in the construction industry can be tricky, so many rely on specialized software or the help of their tax advisor, especially for the short-time work in the construction industry.
payment and accounting – here’s how it works smoothly
The short-time allowance is initially paid by you as the employer to your employees – along with the wages for the hours worked. Afterwards, you reclaim the money by submitting a refund application for the short-time allowance to the employment agency monthly. Here, too, deadlines apply! This claim must usually be submitted within three months after the end of the respective accounting month. For smooth accounting of the short-time work in the construction industry , you need to document a lot. This includes detailed time records for each affected employee from which it is clear how many hours were worked and how many were missed. You must also keep meticulous records of wage accounts and other important documents ready for possible examinations by the employment agency. Our tip: Use the KEA system (electronically accept short-time allowance documents) for submitting application and accounting documents. This is data protection compliant and makes many things more efficient. Accurate documentation is of course also super important for the correct accounting of the salaries in the construction industry during the short-time work in the construction industry.Construction special: SOKA-BAU, bad weather & clever alternatives to short-time work
The SOKA-BAU: An important partner in short-time work
Especially in construction, SOKA-BAU (social funds for the construction industry) plays an important role when it comes to short-time work in the construction industry short-time work – especially with seasonal short-time allowances (S-Kug). Because in addition to the S-Kug from the employment agency, your employees in the construction industry can receive additional benefits from SOKA-BAU under certain conditions. This includes the supplementary winter allowance (ZWG) and the additional effort winter allowance (MWG). As a company, you are obliged to report hours of absence for which S-Kug is received via the reporting and billing procedure (MUV S-KUG) to SOKA-BAU. This reporting is super important to ensure that the SOKA-BAU seasonal short-time work-related claims can be processed correctly. This whole system is financed through the contributions that you as a construction business pay to SOKA-BAU. So, it is worth your while as a company to not only be familiar with the rules of the employment agency but also with the specific procedures and requirements of the short-time work in the construction industrySOKA-BAU. This way, you can fully exploit all possible supports and ensure that your reports are accurate, which is essential for the short-time work in the construction industry success of your application.
Bad weather & seasonal short-time work: The classic in winter
Die Bad weather, officially from December 1st to March 31st, is something we in the construction industry know all too well. It is the main reason for the seasonal short-time work allowance (S-Kug). This instrument is tailor-made to help us through weather-related downtimes in the cold season and thus avoid layoffs. As a company, you must demonstrate that work cannot proceed primarily due to the weather. Before applying for S-Kug, usually, working time allowances must first be used up, and if it is reasonable and planned, vacation must be taken. In addition to S-Kug, which covers part of the wage loss (the well-known 60% or 67% of the net pay differential), your employees also receive the supplementary winter allowance (ZWG) for each hour of absence with S-Kug and the additional effort winter allowance (MWG) for each hour actually worked during the funding period (December to March, sometimes also November and April). How high these allowances are and the answer to the question, from when the Soka-Bau bad weather money applies is found in the collective agreement and legal regulations. The proper handling of S-Kug is therefore a central issue of short-time work in the construction industry the winter season.
Have you ever thought about colleague assistance? A clever alternative!
A really interesting, albeit perhaps not so well-known alternative to short-time work in the construction industryshort-time work, especially for smaller companies, is known as colleague assistance.What is that? Simply put: You temporarily transfer one employee to another company that is currently busier and needs help. This can help you bridge short-term order shortages in your own company without having to immediately declare short-time work. For companies with fewer than 50 employees, this is often quite flexible, as under certain conditions, just a simple notice to the Federal Employment Agency is sufficient, and the whole thing can run for up to 12 months without approval. Colleague assistance can thus be a really pragmatic solution to keep your employees in paid work while also supporting other businesses. Of course, this requires good contacts in the industry and clear contractual arrangements between all parties involved. But it is definitely an option you should consider if you want to short-time work in the construction industry avoid short-time work, especially if it’s only for shorter periods and a four-day week in construction might not be the solution. This alternative to short-time work in the construction industry short-time work can be very effective.
Colleague assistance: Important points to consider
If you want to use colleague assistance, there are a few important points:
- Clear contracts: Make precise agreements between your company, the receiving company, and the employee.
- Social insurance: Your employee remains on your payroll and is insured.
- Payment: Regulate wage continuation and any compensation payments.
- Liability: Clarify questions regarding occupational safety and liability in the receiving company.
Short-time work as a training booster: Make your employees fit for the future!
Get funding for further education – here’s how!
Eine Phase der short-time work in the construction industry short-time work does not have to be wasted time – quite the opposite! It is a great opportunity to further educate your employees and prepare them for new challenges. Did you know? According to § 106a SGB III, you as a company that has registered short-time work can receive funding for professional training of your employees under certain conditions. The Federal Employment Agency can cover part of the training costs and even a contribution to the social security contributions you, as the employer, have to pay during the training alone for the employee. What are the conditions for this funding within the framework of the short-time work in the construction industryshort-time work? For example, the duration of the qualification (often over 120 hours) and that the educational provider and the measure itself are approved. Our advice: Talk to the Employment Agency early about the specific funding opportunities and what you need to consider. This investment in your employees’ know-how will pay off in the long term and help you positively shape the future of the construction industry in your own company.
Win-win: Benefits for all involved
If you utilize the short-time work in the construction industry for further education, everyone benefits – your company and your employees. As a company, you can not only retain your skilled workers but even improve their skills. This strengthens your competitive position once the crisis is overcome. Well-trained employees are simply more productive, flexible, and often bring fresh ideas and innovations into the company. And for your employees? For them, further education means a real enhancement of their professional opportunities and makes them more attractive in the job market, even after the phase of short-time work in the construction industryshort-time work. It can also provide a significant motivation boost when the time of work shortfall is utilized so meaningfully. The chance to learn new things or deepen existing knowledge can also bind your employees closer to your company. Especially in light of the shortage of skilled workers in construction this is a point that should not be underestimated. You see: short-time work in the construction industry leveraging and qualification – this is a true win-win situation!
Ideas for further education? Here are a few suggestions:
The possibilities for meaningful further education are enormous:
- Digital know-how: Getting fit with construction software, BIM (Building Information Modeling), or digital measurements.
- Deepening expertise: Learning new processing techniques, engaging in energy-efficient renovation, or training with modern materials.
- Management & communication: Improving project management skills, learning team leadership, or optimizing customer communication (by the way, tools like our Valoon platform can greatly assist with dealing with challenges in construction because they simplify communication considerably).
- Safety & standards: Stay updated on current changes and regulations.
Short-time work in construction: Overcoming current hurdles & looking positively forward
Where the application sometimes stumbles
Although the procedures for applying for short-time work in the construction industry are actually well-established, we repeatedly hear that companies encounter difficulties. A common reason for applications being rejected is actually insufficient or poorly formulated justifications for the work shortfall.The requirements to explain the economic reasons, the temporary nature, and the inevitability of the shortfall are indeed quite high. Simply referencing increased interest rates or material costs is often not enough. You need to show how this specifically affects your business (for example, through verifiable cancellations of projects). To avoid stumbling here, the Federal Employment Agency and the Central Association of German Crafts (ZDH) have produced good information sheets and guidelines. These help you fill out your applications correctly and completely. Furthermore, the employment agency often offers individual consultation sessions after the application is received. There, you can clarify matters and may get hints on potential weaknesses in the application in advance. This proactive advice is a great way to increase the chances of success for applications for short-time work in the construction industry short-time work short-time work in the construction industry that we entrepreneurs must deal with.
A look ahead: What awaits us?
The rules for the short-time work in the construction industry short-time work extension until the end of 2025, which provides us companies with a degree of planning security. However, we must assume that the access requirements and how much money is available will also depend on future economic should be well considered and should always be based on a precise analysis of your operational situation and the general and political decisions. But one thing is certain: The short-time work in the construction industry short-time work will remain an important tool to secure jobs and stabilize our industry, especially when considering the many risks in the construction industry factors such as fluctuating material prices, interest rate developments, or demographic changes. Our tip: Stay informed, regularly update yourself on current changes, and keep your personnel planning as flexible as possible. A good Market analysis of the construction industry can help you recognize trends early and take timely action – this also includes preparing for possible phases of short-time work in the construction industry in advance.Your roadmap to short-time work in construction: Our checklist & best tips for practice
Before you start: Check the requirements!
Okay, before you seriously consider short-time work in the construction industry in your company, please take the time for a thorough check of the requirements – this is truly the key. Are the operational prerequisites met? In other words: Is your company even part of the sectors that are eligible (e.g., the main construction industry for S-Kug)? Do the personal prerequisites of your employees fit? Are they subject to social security contributions? And very importantly: Is there really a significant loss of work present? This generally means that at least one-third of your people are affected by a wage loss of more than 10%. It is absolutely crucial that you can prove that you have exhausted all reasonable options to avoid short-time work. This includes reducing overtime, utilizing working time accounts, and a flexible vacation plan. Document these steps meticulously, as this is the foundation for a successful application for short-time work in the construction industry. An early conversation with the can clear up many uncertainties.
Prepare the application – with intelligence!
A top preparation of your application is truly the key if you want to short-time work in the construction industry successfully get it started. Sit down and formulate a detailed and well-understandable justification for the loss of work. If there are economic reasons, support this with specific numbers and facts, such as order cancellations or supply shortages. Obtain the approval of your works council (usually via a company agreement) or, if you don’t have one, the written consent of your affected employees. Gather all necessary documents: In addition to the notification of the loss of work, this includes lists of the affected employees and proof that you have done everything to avoid short-time work. The current Short-time work construction industry 2024 regulations demand precision. It’s best to use the forms and informational sheets from the employment agency. Clean documentation not only simplifies the application process for the short-time work in the construction industry , but it is also invaluable in case of future audits.
Implementation and accounting: Here’s how to do it right!
Once the approval for the short-time work in the construction industry is in place, it’s time for correct implementation and monthly accounting. Pay the short-time work compensation punctually together with the salary for the hours worked to your employees. Keep precise time records, clearly showing the worked hours and the hours lost. These records are the basis for your monthly performance application, with which you reclaim the short-time work compensation from the employment agency. Be sure to pay attention to the deadlines for these applications! Also consider if software solutions for payroll accounting, which assist in calculating and documenting the short-time work compensation (like the KEA procedure for electronic submission), make sense for you. And our tip: Don’t forget to use the phase of short-time work in the construction industry for training opportunities as well! This way, you prepare your employees for the zu nutzen! So machen Sie Ihre Mitarbeiter fit für die future of the construction industry. By the way, we at Valoon GmbH are happy to support you in optimizing your internal communication and documentation processes – this is a real advantage even during short-time work. If you’d like to know how our software can help you become more efficient and manage challenges like handling project data even with reduced working hours, then just get in touch with us.
Our construction company is considering applying for short-time work. What is the first and most important step?
Der The first and most important step is the timely written notification of the work loss to the responsible employment agency. This must occur in the same month in which the short-time work is to begin. A detailed justification and the involvement of the works council (if available) or the consent of the employees are also crucial.
Do we as a construction company always have to apply for seasonal short-time work money in winter, or is normal short-time work possible?
In the construction industry, the seasonal short-time allowance (S-Kug) takes precedence during bad weather (December to March) over economic short-time work.Economic short-time work generally only applies outside this period, from April to November, in the event of work loss due to economic reasons.
Can we use the short-time work period to make our field employees digitally more competent, for example, in using new communication tools?
Yes, absolutely! The short-time work period is an excellent opportunity for training.Under certain conditions (§ 106a SGB III), the Federal Employment Agency can subsidize training costs and social security contributions.Training in the use of efficient communication tools, which for example integrate messaging services, can significantly boost productivity after short-time work.
What are the most common mistakes in applications for short-time work in construction that we should avoid?
Common mistakes include insufficiently formulated or poorly reasoned justifications for the work loss. It is important to clearly lay out the economic reasons, the temporary nature, and the inevitability in detail and in a comprehensible manner.Careful documentation of all measures to avoid short-time work is also crucial.
How much is the short-time work compensation and who pays it out?
The short-time work compensation is typically 60% of the lost net pay, or 67% for employees with at least one child.The employer pays the short-time work compensation together with the salary for hours worked and then applies for the reimbursement from the employment agency..
Does SOKA-BAU play a role in short-time work?
Yes, SOKA-BAU plays an important role, especially in the seasonal short-time allowance (S-Kug). Companies must report lost hours to SOKA-BAU. In addition to S-Kug, employees can receive additional benefits such as winter bonuses (ZWG) and increased winter payments (MWG) from SOKA-BAU.
