In the face of challenges such as digitalization, a shortage of skilled workers, and an aging population, the profitability and competitive edge of companies, especially small and medium-sized enterprises (SMEs), are under significant pressure. To address these issues and support the workforce through the digital transition, the German government has enacted the Qualification Opportunities Act (Qualifizierungschancengesetz). This legislation, effective from January 1, 2019, aims to foster the continuous development of employees, ensuring that they are prepared for the changing demands of their professions amidst rapid technological advancements. In this article we will explore the key components of the Qualification Opportunities Act, as well as the implications and opportunities it presents for individuals and businesses. Furthermore we will take a look at the newest revision of the legislation and introduce the new training allowance (Qualifizierungsgeld), aimed at facilitating access to training, upskilling, and reskilling possibilities for workers from a variety of industries and demographics.
Supporting Workforce Development Through Financial Subsidies
Central to the act is the provision of financial assistance for the further training of employees. This move is seen as a strategic investment in human capital, offering a dual benefit: it enables workers to stay relevant and proficient in their roles while helping companies mitigate the impacts of digital disruption and labor shortages. The Qualification Opportunities Act facilitates this by subsidizing training course costs and wage expenses during the training period, with the level of support varying based on the company size. This financial support extends to all employees, irrespective of their age, qualifications, or the size of their employing company, provided that the training meets certain criteria, including a duration of more than 120 hours and certification under AZAV (Accreditation and Authorization Regulation for Employment Promotion).
Innovations and New Opportunities Post-April 2024
The act underwent significant updates effective April 1, 2024, aimed at broadening accessibility and enhancing benefits. Key amendments include 100% reimbursement of wage costs for small enterprises and standardized funding amounts, eliminating discretionary practices. Moreover, these revisions have made further training support more inclusive by removing prerequisites that previously limited eligibility to employees directly impacted by structural changes or those in occupations facing skill shortages.
A newly introduced training allowance (Qualifizierungsgeld) offers the employer a way to preserve employment positions within the company when training is required due to structural changes. To qualify for the training allowance, there must be an applicable company agreement or a relevant collective labor agreement in place, though this requirement does not apply to companies with fewer than 10 employees. The purpose of the qualification allowance is twofold:
It aims to allow your employees to remain employed at their current company by updating or upgrading their skills and it provides a compensatory payment that covers 60% (or 67% for employees with children) of the net salary of that employee. The employer bears the responsibility of financing the training expenses, while at the same time benefiting from cost savings by not paying wages during the training period.
Eligibility and Application Process
Eligibility for the benefits under the Qualification Opportunities Act is generally broad, encompassing current employees looking to adapt or advance within their company. Applications for funding must be submitted through the employers to the Federal Employment Agency (Bundesagentur für Arbeit), which provides guidance on available options and processes. The agency also offers a qualification allowance for companies undergoing structural changes, covering salary costs during training to alleviate financial burdens further.
Whether an employee is eligible for funding depends on several factors:
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Target group: employees (regardless of age, area, and size of the company) must be affected by (digital) structural change or work in areas with a shortage of skilled workers.
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Courses/ training: the skills and knowledge imparted must be future-proof and job-related. Further training that is mandatory by law is excluded. The duration of the training must be at least 120 hours.
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Training provider: The provider of the training must be an official and certified training provider listed on KURSNET, such as Code Labs Academy’s. The further training cannot be carried out by the company itself.
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In the case that the Qualification Opportunities Act has been used before, the last approved further training course must have taken place at least two years ago.
If you need support and advice through the application procedure, don’t hesitate to contact our team, we will ensure to guide you step by step through the solicitation process.
A Win-Win for Employers and Employees
For employers, the act represents a vital tool for addressing the challenge of keeping their workforce skilled and knowledgeable in the face of rapid technological shifts. By reducing the financial load of training, it enables businesses to more readily invest in their employees' development, boosting job satisfaction, loyalty, and overall company competitiveness. Employees, on their part, gain access to opportunities for professional growth and job security, preparing them for the future of work in an increasingly digital economy.
In summary, the Qualification Opportunities Act stands as a comprehensive response to the demands of digital transformation, aiming to fortify the labor market by supporting continuous learning and skill development. Through financial subsidies and a focus on future-oriented qualifications, it seeks to ensure that both employees and employers are well-positioned to thrive in today’s dynamic professional world.
Find the Right Training Provider
Are you an employer looking to invest in the development of the workforce of your company to stay competitive in the advancing technological field? Code Labs Academy is a recognized and certified training provider and offers bootcamps that bring your employees up to speed with the latest developments in the IT industry and prepare them for the challenges of digital structural change. Our flexible hours and part-time options make it possible to combine training with work. Contact us now about our corporate training program and we will help you create a tailor-made program for your businesses needs.
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