Reimbursement Claims For Employers Under The Infection Protection Act

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In times of the corona crisis and related administrative orders for quarantine and company closures, the question of compensation claims arises for many companies. This question has become even more topical since the compensation regulations in the Infection Protection Act (IfSG) were supplemented this week.

In principle, the employer is only entitled to a reimbursement claim against the authority under the Infection Protection Act if he pays the employee a claim for compensation to the employee because he himself has no obligation to pay the employee.

The main case groups can be summarized as follows:

  • There are no reimbursement claims for workers who have Covid-19 and are quarantined. Here there is an obligation to pay remuneration according to the Continued Remuneration Act.
  • For workers who are quarantined without symptoms, a possible reimbursement claim depends on the contractual and actual circumstances.
  • From March 30, 2020, employees who have to look after their children due to the closure of childcare facilities are entitled to reimbursement.
  • There is no right to reimbursement for companies affected by official closings.

Measures under the Infection Protection Act

In the times of the corona crisis, the IfSG serves the authorities as the legal basis for ordering measures to prevent the further spread of the corona virus (§ 28ff IfSG). This includes orders for home quarantine in suspects or those already infected. In addition, the individual federal states have issued general rulings and ordinances in accordance with Section 32 IfSG, which provide far-reaching bids and prohibitions to combat further dissemination. Among other things, kindergartens, schools and other childcare facilities were closed. Likewise, retail stores that do not offer everyday goods are no longer allowed to open.

Reimbursement claims according to IFSG

Section 56 of the IfSG provides for compensation claims if persons suffer loss of earnings due to official measures. Such loss of earnings exists for employees if there are no other contractual or legal claims to remuneration. If employees are entitled to compensation under the IfSG, the employer must pay the employee to the authority for six weeks. He must therefore settle and advance the corresponding payments and can subsequently apply for a refund of the payments made (Section 56 (5) IfSG).

In the following, we provide an overview of when the employee is entitled to compensation and the employer can therefore request reimbursement - and when not:

Employee is ill with symptoms and unable to work

If an employee is ill and unable to work, the usual rules for inability to work apply. According to the Continuing Pay Act, the employer is obliged to continue paying for the first six weeks. Since the employee does not suffer a loss of earnings in this respect, there is also no claim for compensation or reimbursement under the IfSG.

Employee is quarantined as a suspected case or symptom-free

If an employee has to go into quarantine due to an official order and is therefore unable to work, he is, as a rule not at fault, prevented from performing his work for "personal reasons". These cases basically cover § 616 BGB. In deviation from the principle that remuneration is only paid for work, the employee retains his right to remuneration if he is prevented from performing the work through no fault of his own. However, this only applies for a “relatively insignificant period”. The Federal Court of Justice has ruled that in the case of official measures to prevent the spread of diseases, a period of six weeks is still considered to be insignificant. It was based on the six-week pay continuation period in the event of incapacity to work. The corresponding decision, however, dates from 1978 and only dealt with an individual case and not a nationwide pandemic. It is uncertain whether the authorities will take a similarly restrictive approach in the wake of the current corona crisis. We therefore recommend that you closely monitor further developments and, if necessary, also consider a refund application in this situation.

In many employment contracts and collective agreements, however, § 616 BGB is excluded. Employees are then not entitled to remuneration from their employer in the case of a quarantine order. You will suffer a loss of earnings. In this case, § 56 IfSG applies and the employee receives a claim for compensation equal to his regular remuneration. This right is directed against the employer for the first six weeks. The employer can then request reimbursement of the remuneration paid.

At the end of the six weeks, the employee's claim is directed directly against the state authorities. The amount of the compensation payment then corresponds to the amount of the sickness benefit.

Workers cannot work because children have to be looked after

There is a new compensation scheme for childcare. In the wake of the Corona crisis, legislators amended § 56 IfSG this week. Thereafter, custodians are entitled to compensation payments if

  • the childcare facilities have been closed,
  • the children are younger than 12 years or disabled and need help and
  • there is no other reasonable care option.

Reasonable childcare options exist, for example, if there is a right to emergency childcare in the childcare facility, the other parent can be used or other family members / relatives who are willing to do so can take care of the child. As far as people belong to the risk group (e.g. the grandparents due to their age), they are not considered to be a reasonable care option. Compensation can be granted for a maximum of six weeks, but not for the school holidays.

Here too, there is only a claim for compensation if there is a loss of earnings. If the employer is obliged under § 616 BGB to continue paying the remuneration for 5 working days, there will be no loss of earnings. Furthermore, the employee must first work overtime.

In the case of employees, the payment claim is directed against the employer, who can then subsequently apply for reimbursement. The amount of compensation is 67% of the previous net remuneration and is capped at a maximum of EUR 2,016.00 net per month.

This regulation takes effect on March 30, 2020 and applies until December 31, 2020.

Workers cannot work because the company was forced to close

The IfSG does not provide any compensation payments to employers or companies that have to close their company or business by general administrative order. Insofar as § 65 IfSG grants compensation for official measures, this relates only to individual official measures. Compensation for losses due to the general injunction cannot be derived from this. In the course of the current debate, in which the IfSG was also adapted, the Bundestag did not opt ​​for an additional compensation regulation in these cases. Politicians refer companies to the numerous economic aids that are currently being planned or are already being implemented. In our view, this means that an analogous application of Section 65 IfSG is no longer applicable.

Social security contributions and taxes

The social security obligation also applies to employees who receive compensation payments under the IfSG. The amounts to be paid are also reimbursed to the employer in full. It should be noted that the assessment basis for the contributions in the event of compensation for childcare is not the full previous wages, but only 80% of the previous wages.

Compensation payments for employees are tax-free according to the IfSG, § 3 No. 25 EStG. A wage tax deduction is therefore not necessary. As tax-free wage replacement benefits, however, the compensation payments are subject to the so-called "progression reservation" in accordance with Section 32b (1) sentence 1 no. 1 lit. e) EStG. The payments effectively increase the personal income tax rate with which the remaining (taxable) income of the employee concerned is taxed. Pursuant to Section 41b (1) Sentence 2 No. 5 of the Income Tax Act, the employer is obliged to show the compensation payments in the electronic wage tax certificate. In these cases, however, the wage tax annual compensation is excluded according to Section 42b (1) Sentence 3 No. 5 EStG. This prevents the employer from to reimburse the employee for any excess wage tax withheld during the calendar year. A corresponding reimbursement is only effective in the employee's assessment process and requires the submission of a corresponding income tax return.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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