Participation in the Labor Market; Applying for a Subsidy When Hiring People Who Have Been Long-Term Unemployed for Many Years

As an employer, you can offer long-term unemployed individuals the chance to make a fresh start in the workforce through employment subject to social security contributions by creating suitable positions within your company and actively supporting your new employees during their onboarding.

The goal is to enable your new employee to participate in the workforce and to retain them in your company for as long as possible, even after the funding period ends.

To this end, the Job Center can reimburse a large portion of your payroll costs for the first 5 years, also fund coaching, and provide you with a budget for necessary continuing education.

Wage Cost Subsidy for Up to 5 Years

The Job Center can provide you with wage cost subsidies for up to 5 years. The wage cost subsidy is paid monthly and amounts to

• 100 percent in the first and second years of funding,
• 90 percent in the third year of funding,
• 80 percent in the fourth year of funding, and
• 70 percent

of the minimum wage as defined by the Minimum Wage Act. If, as an employer, you are bound by a collective bargaining agreement or church labor regulations, or if you refer to a relevant collective bargaining agreement, your subsidy will be calculated based on the actual wages paid.

The subsidy also covers your employee’s social security coverage with a flat-rate social security contribution. The contribution to unemployment insurance is excluded.

You will not receive a subsidy for one-time payments, such as a Christmas bonus or vacation pay.

Employment Support (Coaching)

The Job Center covers the costs of mandatory coaching for up to 5 years, which supports your employees who were previously long-term unemployed—for example, when they face problems at their new job, in their family, or with organizing their daily lives. This makes it easier for your new employees to adjust to the daily routine of work after a long period of unemployment.

The coaching can generally take place during or outside of working hours, at the workplace, or at another location. However, during the first year of the subsidy, you must excuse your subsidized employee from work for the coaching sessions; if the coaching takes place during working hours, you must continue to pay their wages. Coaching needs are determined on an individual basis. Your business needs are taken into account when scheduling coaching sessions.

The coaching is structured to also take into account the specific requirements that you or your company place on your staff. However, on-the-job training is not part of the coaching.

The coach will involve you as needed and is available to answer any questions you may have regarding the subsidized employee.

Training Costs

Upon request, the Job Center will also reimburse you up to 3,000 EUR for necessary continuing education—so-called course fees—during employment, as well as for in-house training. In addition, your employees may be reimbursed for additional travel expenses and additional costs for child care incurred during the training.

The decision regarding funding for training costs is at the discretion of the Job Center. You do not have a legal right to this funding.

Internship

The funding program allows for internships to be completed outside your company with another employer while the funded employment relationship is in effect.

• The person for whom you wish to receive the grant must
  • be over 25 years old,
  • have received basic income support for at least 6 of the last 7 years, and
  • have been either unemployed or employed only briefly during that time.
• If at least one minor child lives in the household or if the person has a severe disability, the person must have received basic income support within the last 5 years.
• The employment must be subject to social security contributions.
• Eligibility is excluded if:
  • You terminate an existing employment relationship in order to receive a wage subsidy
  • You cease to claim funding previously provided for the employment relationship without a valid reason
  • wage subsidies for participation in the labor market have already been provided to the employee for a period of 5 years

• You must apply for the wage subsidy before you hire someone and sign the employment contract.
• Contact your representative at the Job Center. There, you’ll receive advice on the subsidy and get the application form, or you can submit the application online.
• Fill out the subsidy application and submit it to the Job Center, or submit the application online.
• Your Job Center will review your application and let you know whether the employment relationship is eligible for funding and whether the person you wish to hire qualifies for this funding.
• If the response is positive, you can sign the employment contract and send it to the Job Center immediately.
• If all requirements are met, your employee will be assigned to you, and you will receive a notice of approval.

The Job Center will arrange for on-the-job coaching for your employee.

In order for the Job Center to cover training costs, you must also submit an application first.

• Contact your representative at the Job Center. You can obtain the application form there.
• Fill out the funding application and submit it to the Job Center along with all necessary documents.
• Your Job Center will review your application. If all requirements are met, you will receive a notice of approval.

If you are offering an internship, you must notify the Job Center before it begins.

Apply for the wage subsidy before you sign the employment contract with your new employee.

None 

• Required document(s)
  
  • Completely filled-out application
  • Employment contract