Corona and Payroll

How to manage payroll in the event of Quarantine

If employees cannot do their work because of quarantine, employers usually only have to pay the loss of earnings in the amount of the net wage and are entitled to reimbursement.

Pay during a quarantine

If employees cannot do their work because of quarantine, employers usually only have to pay the loss of earnings in the amount of the net wage and are entitled to reimbursement.

Employment contract regulates the payment of wages

According to the Infection Protection Act (IfSG), employees who may have been infected with the coronavirus can be obliged by the health department not to leave their home and thus remain in quarantine. The question quickly arises whether their salary will continue to be paid if the employees involuntarily cannot perform their work.

During the quarantine, a legal distinction must be made between wages and compensation. The continued payment of wages in such cases can be excluded in the employment contract (§ 616 BGB). This is very often the case in practice.

Compensation for workers by health authorities

If employers are not contractually obliged to continue paying the remuneration, a claim for compensation, which is regulated in the Infection Protection Act (Section 56 IfSG), applies to protect the employees. After that, the employer continues to pay the wages for the first six weeks of the quarantine. For the payments, he can apply for reimbursement from the competent authority in the respective federal state within twelve months. Please also note the relevant deadlines in the respective federal state for applying for compensation.

Country matter: No compensation for unvaccinated people

Since September 15, 2021, Baden-Württemberg has been the first federal state to no longer pay unvaccinated employees for loss of earnings due to a corona quarantine. The IfSG (Section 56) provides the option, according to which the right to compensation can be waived if a publicly recommended vaccination is possible.

Several federal states want to follow: Rhineland-Palatinate on October 1st, North Rhine-Westphalia on October 11th. The regulation is to be implemented nationwide from November onwards; the federal and state health ministers agreed on this on September 22nd.

Insurance relationship in the event of compensation

The compensation payment has no effect on the employee's insurance status. This means that employees who are subject to compulsory insurance are still required to be insured in all insurance lines; employees with a salary above the annual income limit remain exempt from insurance.

The assessment basis for the first six weeks of the compensation payment is the remuneration on which the compensation for loss of earnings is based before deduction of taxes and contribution shares, i.e. usually the previous gross earnings.

Contributions to compensation

The compensation authority bears the contributions to health, long-term care, pension, and unemployment insurance alone. Contribution shares from employees are not deducted. The assessment basis for the contributions is gross earnings. The employer calculates the contributions and pays them to the employee's responsible health insurance company (collection point).

In terms of contribution law, the compensation payment is to be treated like the payment of contributory earnings. Accordingly, social insurance days are to be set for the period. The remuneration on which the compensation for loss of earnings is based must also be taken into account in the next remuneration report.

For the periods of compensation payment, employers who participate in the allocation procedure U1 and U2 must continue to pay the allocations in accordance with the Expenditure Compensation Act. The insolvency levy must also continue to be paid. There was a legal clarification on this in November 2020 (Section 57 (2) IfSG). The assessment basis for the levies is the full gross wage that has not been paid. The state that is liable to pay compensation will also reimburse the employer for the contribution on request.

No compensation for trips to risk areas

Since March 1, 2021, all people entering Germany have received an SMS from the federal government as soon as their mobile phone logs into a German mobile network. This informs you about the entry and infection protection regulations applicable in the Federal Republic of Germany and informs you about applicable infection protection measures.

When employees return from vacation they spent in a risk area, they must register using a digital entry form and be quarantined at home for ten days. There are different regulations for this in the federal states.

The question of compensation in the event of quarantine depends on whether the employee knowingly traveled to a risk area or not. In November 2020, the legislature stipulated that there is no entitlement to compensation for loss of earnings under the Infection Protection Act if quarantine could have been avoided by not starting an avoidable trip to a risk area that was already classified at departure.

If the employee has the opportunity to work from home during the quarantine, the right to payment of the wages remains.

If the vacation country to which the employee is traveling is declared a risk area after the start of the journey, the employee is not guilty of any culpable action. The employee is then entitled to compensation for his loss of earnings from the competent authority for the duration of the quarantine.