What is Germany's new 'qualification allowance' to upskill employees?
Starting on April 1st, German companies impacted by changes in the economy can access government funding so that their employees can embark on further training.
The German government has set aside €3.3 billion to fund training for employees across the country to upskill in a rapidly changing environment as part of a law to strengthen vocational training and further education.
The funds are intended to help employees in declining sectors like manufacturing keep their jobs as the country chases its climate neutrality and digitisation goals.
The “Qualifizierungsgeld”, or qualification allowance, will support companies that are impacted by structural changes to the economy. These include automation, AI, the transition to cleaner energy, and more. The funds will replace wages up to 67 percent of the net salary while employees train. The employer is the one who foots the costs of the training.
Hubertus Heil, Federal Minister of Labor and Social Affairs, said in a statement the qualification allowance will keep employees from being left behind amidst transformation across industries.
“Germany urgently needs skilled workers. Training and further education are a central answer to the shortage of skilled workers,” he said.
“With the new qualification money we are strengthening the opportunities to make today's employees fit for the work of tomorrow.”
READ ALSO: 8 things to know about Germany's new skilled worker immigration law
The funds are intended to help employees at risk of losing their jobs because of structural changes to the economy, upskill and maintain employment.
Still the investment has not been met by applause by everyone. The Confederation of German Employers’ Associations (BDA) criticised the allowance for being tailored to meet the needs of large companies and not small businesses.
"It further complicates an already complex system and excludes companies that do not have a relevant works agreement or relevant collective agreement,” the association said in a statement.
In the future, the government plans to make the qualifications allowance available to all employers and employees, regardless of if they are impacted by economic change or their jobs are in shortage.
What are the requirements for the qualification allowance?
To be eligible for the funding, companies should prove that structural change will impact a large portion of their workforce. This amounts to 20 percent of the workforce if you have 250 or more employees and 10 percent if your company has fewer than 250 employees.
If your company has fewer than 10 employees, a written statement from the company can meet this requirement. Employees must also consent to receiving the qualification.
Sigudur, a native of Iceland, checks the landing gear of a Boeing 747 at the Haitec aircraft shipyard in Hahn. Germany is struggling with a skilled worker shortage. Photo: picture alliance/dpa | Thomas Frey
How long should the training be?
The professional development must exceed 120 hours, but it does not have to be completed all at once. Employees can complete the trainings either full-time, part-time, or during their own time outside of normal working hours
What kinds of professional development courses are covered?
The training must impart knowledge and skills that go beyond short-term adaptation training. Company-specific software training is not eligible for funding. The training provider must also be accredited and approved for funding.
How can businesses apply for the allowance?
Employers must apply in writing or online through the Federal Employment Agency’s portal at least three months before the expected start of vocational training. If the company intends to utilize several different professional development courses for their employees, they are required to submit an application for each course.
How much are employees paid to complete the courses?
The qualification allowance is paid to employees at a rate of 60 percent of their net salary. For employees with children, the percentage increases to 67 percent. Employers can also increase the percent of salary.
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The German government has set aside €3.3 billion to fund training for employees across the country to upskill in a rapidly changing environment as part of a law to strengthen vocational training and further education.
The funds are intended to help employees in declining sectors like manufacturing keep their jobs as the country chases its climate neutrality and digitisation goals.
The “Qualifizierungsgeld”, or qualification allowance, will support companies that are impacted by structural changes to the economy. These include automation, AI, the transition to cleaner energy, and more. The funds will replace wages up to 67 percent of the net salary while employees train. The employer is the one who foots the costs of the training.
Hubertus Heil, Federal Minister of Labor and Social Affairs, said in a statement the qualification allowance will keep employees from being left behind amidst transformation across industries.
“Germany urgently needs skilled workers. Training and further education are a central answer to the shortage of skilled workers,” he said.
“With the new qualification money we are strengthening the opportunities to make today's employees fit for the work of tomorrow.”
READ ALSO: 8 things to know about Germany's new skilled worker immigration law
The funds are intended to help employees at risk of losing their jobs because of structural changes to the economy, upskill and maintain employment.
Still the investment has not been met by applause by everyone. The Confederation of German Employers’ Associations (BDA) criticised the allowance for being tailored to meet the needs of large companies and not small businesses.
"It further complicates an already complex system and excludes companies that do not have a relevant works agreement or relevant collective agreement,” the association said in a statement.
In the future, the government plans to make the qualifications allowance available to all employers and employees, regardless of if they are impacted by economic change or their jobs are in shortage.
What are the requirements for the qualification allowance?
To be eligible for the funding, companies should prove that structural change will impact a large portion of their workforce. This amounts to 20 percent of the workforce if you have 250 or more employees and 10 percent if your company has fewer than 250 employees.
If your company has fewer than 10 employees, a written statement from the company can meet this requirement. Employees must also consent to receiving the qualification.
How long should the training be?
The professional development must exceed 120 hours, but it does not have to be completed all at once. Employees can complete the trainings either full-time, part-time, or during their own time outside of normal working hours
What kinds of professional development courses are covered?
The training must impart knowledge and skills that go beyond short-term adaptation training. Company-specific software training is not eligible for funding. The training provider must also be accredited and approved for funding.
How can businesses apply for the allowance?
Employers must apply in writing or online through the Federal Employment Agency’s portal at least three months before the expected start of vocational training. If the company intends to utilize several different professional development courses for their employees, they are required to submit an application for each course.
How much are employees paid to complete the courses?
The qualification allowance is paid to employees at a rate of 60 percent of their net salary. For employees with children, the percentage increases to 67 percent. Employers can also increase the percent of salary.
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