On the 11th of March 2020, the Berlin Senate ordered that all the districts in Berlin have to cancel all events with a number of participants totaling more than 1,000, but this was just the beginning of the global health and economic crisis caused by COVID-19.
Since then, there has been a growing number of health and safety measures implemented in Berlin and around the world to slow the spread of the virus, which will have important economic consequences for companies, employees and the government. There is no doubt that the first priority is to protect the population, but this will be an enormous challenge for many businesses.
However, the German government is prepared to support businesses during this time and preventive measures are currently in place to keep companies in Berlin from going bankrupt and laying off workers as a result of the pandemic crisis. Support such as liquidity assistance, guarantees, and work-time reduction are needed to measure and control the impact of the virus.
If your business is being impacted during this time of uncertainty, then the Berlin Senate Department for Economics, Energy, and Businesses has released an informational press release on this topic. We’ve translated some of the most important information and resources into English, but you can find the complete German version here.
Effects on the Berlin Economy
The Berlin Senate Department for Economics, Energy, and Businesses is working hard to regulate and support affected companies.
How to Act in the Case of Infected Employees?
- If contact with coronavirus is detected: the respective health authority should be contacted immediately regardless of symptoms
- In case of suspicion: call a doctor and/or the public health department
- Nobody should travel unless it is really needed. If you fall ill on the return flight with Coronavirus symptoms, contact the flight crew
Senate Department of Health: 030 9028 2828
Loss of Working Hours Due to Corona
Even without quarantine measures on-site, the novel Coronavirus is already causing disruptions in the operations of numerous companies. Many businesses are faced with the problem that deliveries from China are missing, resulting in a lack of material or goods that have already been produced cannot be shipped because transport to China, for example, is currently not possible. In these cases, production often has to be stopped because there is no further storage capacity for finished products.
Workers which can no longer be employed due to these disruptions have to be dealt with as a "business risk" and the employer must pay his employees the agreed remuneration even if he cannot use their work performance. If workers can no longer be employed in such a situation, the following applies:
- The so-called "business risk" is borne by the employer.
- This means that the employer must pay his employees the agreed remuneration even if he is unable to use their work performance, for example, due to interruptions in the supply chain.
The prerequisite is always that the employee would be willing and able to work in principle, i.e. that he or she is not incapable of working anyway due to illness, for example.
Official measures to protect against infection could include the ordering of plant closures, and it could cause employees to de facto no longer be employed - unless the legal and technical conditions for employment elsewhere (like home office) already exists. The loss of working hours due to the official closure of a company with the aim of protecting against infection is considered operational risks assigned to the employer. Even if the employer has no influence whatsoever on what happens, the classification is "force majeure" and the company must pay his employees even during this absence from work.
Corona and Work-Time Reduction
The corona-related delivery difficulties & infection prevention can bring the ordering of work-time reduction:
- This cannot easily be ordered unilaterally by the employer, there must be a legal basis
- The legal possibility of pursuing work-time reduction must have been agreed in the individual employment contract, in a company agreement or in a collective agreement
- A working agreement or a collective bargaining agreement is to be applied which is then adjusted by the German government
- The preconditions for the allowance of work-time reduction are at the time being discussed and adapted in the federal government
Once these preconditions are fulfilled and a request is made, the payment will be processed by the federal agency for employment.
Further information is given by the responsible employment department (Service Hotline for Employers 0800 45555 20). The short-time work must be reported to the responsible employment agency.
- The "Liquidity Assistance BERLIN", Investitionsbank Berlin (IBB) is targeting established companies with liquidity shortages. The loan gives you the opportunity to return to profitability and competitiveness if you need liquidity support due to bad debts, temporary slumps in sales or pre-financing of orders.
- The loan gives you the opportunity to find your way back to profitability and competitiveness.
- Liquidity support arrangements are currently being adapted and revised against the background of the corona epidemic so that the specific problems of the affected industries are taken into account more effectively.
Further information can be found on the website of the Investitionsbank Berlin.
For questions regarding liquidity support, there is a hotline for the IBB under the telephone number: (030) 2125 47 47
The following sources of information for companies exist:
- General questions, Hotline of the IHK Berlin for companies: (030) 31 510 919
- Liquidity support, Hotline of the IBB Berlin for companies: (030) 2125 4747 (Monday - Friday from 9:00 - 17:00)
- Hotline of the Federal Ministry of Economics and Technology for companies: (030) 18615 1515 (Monday - Friday from 9:00 - 17:00)
- Coronavirus hotline of the Senate Department of Health: (030) 9028-2828 (daily from 8:00 - 20:00)
Websites page for more information:
- Information page and FAQ of the IHK Berlin on the corona epidemic
- Information on Corona from the Berlin Senate Department of Health
- The Federal Ministry of Economics and Technology provides information on the effects of the coronavirus
- Information on the labor law consequences of a pandemic from the Confederation of German Employers' Associations (BDA)
- The Berlin Business Office Beijing supports Berlin entrepreneurs and companies in all questions and problems
Information from the German Chambers of Commerce Abroad in China, by e-mail: firstname.lastname@example.org
Telephone hotline of the German Embassy in Beijing for urgent questions: +86 10 8532 9202 (on-call service)
The German missions abroad in China also point out that Germans living in China should register in the crisis prevention list.
We will continue to update our Blog Page with more relevant information on the effects that COVID-19 will have on the Berlin and London startup ecosystems once it is available, as well as what support will be offered by government or other institutions.