U1 and U2: The procedures to compensate for continued pay in the event of maternity and illnessNovember 2016 – The U1 and U2 procedures are intended to compensate for continued pay in the event of illness or maternity. They provide important coverage, especially for small businesses. In addition, they are an essential part of payroll accounting, because company audits regularly check whether the apportionments have been calculated and paid properly.
The U1 and U2 levies lead a somewhat shadowy existence compared to other components of non-wage labor costs. They make up only a relatively small part of the burden for the employer. This is what you will find in relevant guidebooks. Information often less space than social security contributions or payroll taxes.
Nevertheless, the statutory equalization procedures are an essential element of payroll accounting. During company audits of the pension insurance, the proper calculation is also regularly checked. Paying the levies controlled (§ 28p SGB IV).
Reason enough, this aspect a thorough view to grant. In this ie, we present the U1 and U2 apportionments.
The U1 levy for continued payment of wages in the event of illness
The U1 levy is a compulsory contribution to finance the continued remuneration that employers must pay to employees in the event of illness. However, the compulsory contribution affects only a certain part of employers: companies that usually do not employ more than thirty full-time employees. This compensation procedure is intended to prevent smaller companies in particular from being financially overburdened by continued payment of wages to employees who are ill.
The legal basis for this is provided by the Act on the Compensation of Expenses (AAG) and the Continuation of Remuneration Act (EFZG). Further details can be found in the joint circulars of the central associations of health insurance funds on the regulations of the AAG.
A whole range of corporations are explicitly exempt from the pay-as-you-go system:
– Federal government, states, municipalities, associations of municipalities as well as corporations, institutions and foundations under public law – Associations, institutions, companies bound by collective agreements of the public sector – Associations of municipalities, Associations of municipalities, associations of municipalities and municipal companies as well as their umbrella organizations – Civilian employees of foreign armed forces and NATO – Home tradesmen and persons of equal status – Family members of an agricultural entrepreneur who are insured under the Second Act on Health Insurance for Farmers – Central associations of voluntary welfare organizations and their subdivisions, facilities and institutions, but for whom there is an option for voluntary participation. Furthermore, the AAG does not apply to companies where employers have set up facilities to compensate for employer expenses with the approval of the Federal Ministry of Health and Social Security (BMGS).
Employers are obliged to check for themselves whether the company must (or can: the procedure does have advantages) participate in this apportionment procedure. This must always be determined at the beginning of a calendar year for the duration of that year. If the number of employees decreases or increases in the current calendar year, this has no effect until the end of the year.
Checking for U1 obligation
The requirement that no more than thirty employees are employed is deemed to have been met if this was the case in at least eight – not necessarily consecutive – calendar months in the previous calendar year. Even if a company exceeds the 30-employee threshold several times due to short-term temporary workers, further participation in the pay-as-you-go system is not excluded. The cut-off date for the number of employees is usually the first day of the month.
Some special features apply to the calculation of the number of employees.
Severely disabled Employees according to SGB IX as well as Trainees are not included in the calculation.
Part-time employees are taken into account proportionally, according to the following scheme:
– weekly employed up to 10 hours: – factor 0,25 – weekly employed up to 20 hours: Factor 0.5 – weekly employed up to 30 hours: Factor 0.75
If a sole proprietor maintains several companies at the same time, the participation is assessed uniformly for all companies, the number of employees in the individual companies is added up for this purpose. If, on the other hand, the companies have the legal form of a legal entity, they must be assessed individually. Employees may not be added together, neither in the case of legal entities nor between sole proprietorships and legal entities, nor between several legal entities of different types (for example: GmbH and UG).
Calculation
The levy is always calculated according to the levy rate and on the basis of the remuneration actually paid up to the contribution assessment ceiling (BBG) of the statutory pension insurance scheme.
Employees whose employment relationship has not lasted longer than four weeks and who cannot be entitled to continued payment of remuneration in accordance with § 3 EFZG are not included in the calculation.
One-time payments in accordance with § 23a SGB IV are also not taken into account in the calculation.
If short-time allowance is paid, the actual pay still counts for the calculation of the levy.
Advantages of the U1 procedure for the employer
If an employer who participates in the U1 apportionment procedure has to continue to pay remuneration to an employee who is ill, the health insurance fund will reimburse between 40 and 80 percent of the remuneration to be paid and up to 80 percent of the employer's social security contributions payable on this from the apportionment (§ 1 AAG). Background for the differences: Although the reimbursement entitlement is generally 80 percent, the health insurance fund's statutes may provide for a lower percentage (§ 9 AAG). The health insurance companies can also work out different models with different rates. The actual reimbursement rate then depends on the reimbursement rates offered by the health insurance fund and chosen by the employer.
In principle, the local, guild and company health insurance funds as well as the substitute health insurance funds are responsible for the compensation procedure, as well as the German Pension Insurance Knappschaft Bahn-See as the carrier of the miners' health insurance, the seafarers' health insurance and the minijob central office. As a rule, the health insurance company with which the sick employee is insured is the concrete point of contact. For marginally employed persons (450 euro jobs). Short-term employees, however, are the responsibility of the Minijob-Zentrale (mini-job center).
The U1 levy, like all other total social security contributions, must be stated in the contribution statement. Also with regard to the due date. The limitation periods do not differ. The right to payment expires four years after the end of the calendar year in which the levy became due (§ 25 SGB IV).
The U2 compensation procedure for continued payment of wages during maternity leave
The U2 employer compensation scheme serves to cushion the financial burden for companies when female employees go on maternity leave. Unlike the U1 compensation system, all employers pay the U2 levy, regardless of the number of employees and their gender. The levy is due even if only men are employed in the company.
Excluded, however, are:
– Family members of a farm who are insured via the health insurance of farmers – Services of foreign armed forces as well as NATO, however, their civilian employees are exempt from this rule.
The wages of employees whose employment relationship does not last longer than four weeks are also not taken into account in the calculation of the U2 levy.
One-time payments are also excluded.
With regard to responsibility, calculation, due date and deadlines, the same applies as for the U1 levy.
Advantages of the U2 procedure for the employer
Employers can apply for reimbursement of the expenses they have to pay when an employee becomes a mother – at one hundred percent. Statutory regulations limiting the right to reimbursement, as in the U1 compensation procedure, do not exist here.