Employers who employ third-country nationals (i.e. employees who are not German citizens or nationals of EU or EEA member states or Switzerland) and who apply for short work allowance (“Kurzarbeitergeld”) in the course of the corona crisis are confronted with the consideration whether applying for short work allowance may have a negative impact on the residence status of these employees. The Federal Ministry of the Interior has commented on this issue in a circular letter to the ministries and administrations of the federal states responsible for immigration law, as described below.
Short work allowance does not constitute a recourse to public funds
Employers may only employ third-country nationals if they hold a corresponding residence title (s. 4a para. 5 Residence Act). The granting and extension of such a residence title is generally dependent on the requirement that the foreigner’s subsistence is secure (s. 5 para. 1 no. 1 Residence Act, s. 8 (1) Residence Act). A foreigner’s subsistence is secure when he or she is able to earn a living, including sufficient health insurance coverage, without recourse to public funds (s. 2 para. 3 sentence 1, 2 Residence Act). If the foreigner takes such recourse to public funds during the validity of his or her residence title, the period of time for which the residence title is granted can subsequently be shortened (s. 7 Para. 2 sentence 2 Residence Act).
The Federal Ministry of the Interior has clarified in the circular that recourse to short work allowance shall have no effect on the validity of a residence title. Not only would the employment relationship between the employer and the foreign employee continue to exist while short work allowance is being paid. In addition, short work allowance is paid on the basis of contributions to unemployment insurance and is therefore not considered to be a use of public funds (s. 2 para. 3 sentence 2 no. 6 Residence Act).
Minimum salary threshold of the residence title not affected
Moreover, the granting and extension of certain residence titles is subject to a minimum salary, for example the Blue Card EU (s. 18b para. 2 Residence Act) and the residence title for IT specialists (s. 19c para. 2 Residence Act, s. 6 Employment Regulation).
The Federal Ministry of the Interior has explicitly clarified that no negative effects on the validity of the residence title are to be expected if the foreigner’s salary falls below the salary thresholds applicable to the above-mentioned residence titles as a result of receiving short-time work allowance if this is a measure taken in connection with the Coronavirus. In other words, this means that in such a case a subsequent shortening of the duration of an existing residence title is not to be expected (s. 7 para. 2 sentence 2 Residence Act).
Caution when applying for other public funds
In the circular, the Federal Ministry of the Interior comments on the effects of the short work allowance on the residence status of foreign employees. However, it does not comment on the effects of employers or employees receiving other public funds on their residence status. Therefore, if public funds other than short work allowance are received by employees or self-employed foreign entrepreneurs with a corresponding residence title, it should urgently be examined prior to applying for such public funds whether the receipt of these funds could have a negative impact on the existing or future residence title.