Business

Short-time working due to COVID-19: compensation mechanism

Due to the coronavirus crisis, 2 short-time working schemes have been set up successively, namely:

For short-time working due to force majeure related to the coronavirus crisis, the National Employment Agency (ADEM) has drawn up a detailed statement based on the declarations provided by the business. This statement is sent to the employer for each month concerned and indicates either:

  • a positive balance in the event of any outstanding balance;
  • a negative balance for the amount of any overpayment.

In order to support the businesses concerned, a compensation mechanism has been set up between:

  • on the one hand, the negative balances resulting from the statements for the months of March to June 2020;
  • on the other hand, the short-time working benefits due for the months of July to December 2020.

As a result, 3 scenarios may arise:

  1. if the short-time working statements show a positive balance for the months of March to June 2020: ADEM transfers the remaining balance due to the business concerned;
  2. if:
    • the short-time working statements show a negative balance for the months of March to June 2020; and
    • the business concerned has not yet made the repayment;
  3. the overpayment of benefits received will be compensated with the short-time working benefits due from July 2020, provided that the short-time working scheme has been granted by the Economic Committee for the month(s) concerned.

    This compensation mechanism will be implemented from mid-October 2020.
  4. the business has not applied for short-time working from July onwards: it must repay the overpayment of advances for the months of March to June 2020.

  5. This reimbursement must be made, within 30 days, to the bank account of the State Treasury, indicating the reference number of the file.

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