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Short-time work in mechanical and plant engineering: Current information

Germany is currently experiencing a profound economic and structural crisis, which is clearly reflected in the key economic figures. During the coronavirus pandemic, short-time work proved to be a key instrument for securing jobs. Companies were able to retain staff and were quickly ready for the upswing again after the crisis. Short-time work is also gaining in importance again in the current situation: according to the Munich-based ifo Institute, one in four industrial companies could soon register short-time work – a significant increase compared to February 2025, when it was just under one in five.

In order to provide targeted support to companies in the mechanical and plant engineering sector in North Rhine-Westphalia, ProduktionNRW organized a virtual information seminar on 15 May 2025. The aim was to provide a compact overview of the most important aspects of short-time working: What legal framework conditions apply? How does the application process work? What funding opportunities are available?

Short-time work in mechanical and plant engineering – current situation

Fabian Seus, lawyer in the VDMA Legal Department and Head of the Competence Center Labor Market, described the current situation in the industry. Although capacity utilization stabilized slightly at 78.5% in April 2025, many companies are still suffering from a lack of orders. The mechanical and plant engineering sector currently employs around 1.016 million people – a decrease of 1.4% compared to the previous year. While more than half of companies want to retain their workforce, 27% are planning to cut jobs due to the tense economic situation. The number of employees on short-time work is rising accordingly.

Cyclical short-time working allowance – the essentials in brief

Thorsten Wüst, specialist for short-time work at the Federal Employment Agency (Regional Directorate of North Rhine-Westphalia), then provided information on the requirements and procedure for applying for short-time work allowance (Kug). The aim of this measure is to secure jobs and stabilize companies in difficult economic times.

The most important requirements for the granting of Kug are
  • A significant, temporary and unavoidable loss of work.
  • The continued existence of an employment relationship subject to social insurance contributions.

A loss of working hours is considered to be significant if at least one third of the workforce is affected by a loss of earnings of more than 10 percent. It is classified as temporary if a return to regular working hours can be expected with a high degree of probability in the foreseeable future. A loss of working hours is considered avoidable if it is predominantly industry-, company- or seasonal-related or has purely organizational reasons.

The introduction of short-time working can be based on various legal foundations: through individual agreements, including in the employment contract, through a company agreement or through corresponding provisions in the employment contract. The period of entitlement to short-time working allowance was extended to up to 24 months by the ordinance of December 20, 2024, but not beyond December 31, 2025. In principle, the maximum period of entitlement is 12 months. If short-time work is interrupted for longer than three months, a new notification to the employment agency is required.
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The short-time work allowance amounts to 60 percent of the lost net pay, or 67 percent for employees with children. The application procedure is a two-stage process: first, the loss of work must be reported to the employment agency; the second step is to apply for the allowance. After the end of the entitlement period, the employment agency is obliged to carry out a final check of the eligibility requirements. To do this, it can inspect the relevant accounting documents – such as working time records, shift books or shift slips.

Further information
  • Information on short-time working allowance from the Employment Agency can be found here.
  • VDMA information on short-time work can be found here.
Organizer

The event is organized by ProduktionNRW. ProduktionNRW is the cluster for mechanical engineering and production technology in North Rhine-Westphalia and is organized by VDMA NRW. ProduktionNRW sees itself as a platform for networking, informing and marketing companies, institutions and networks with each other and along the value chain. Significant parts of the services provided by ProduktionNRW are funded by the Ministry of Economic Affairs, Industry, Climate Protection and Energy of the State of North Rhine-Westphalia.