(More) inclusion through higher compensatory levies? The Inclusion Act is coming!

June 2023 · Estimated read time: mins

On May 12, 2023, the Federal Council approved the "Act to Promote an Inclusive Labor Market". The aim of the statute is to get more people with disabilities into regular work and to keep people with health impairments in work. With the bill, the German government has implemented a programmatic point from the coalition agreement in the area of labor market integration of people with disabilities. The law is intended to encourage companies to employ more people with disabilities in the future. The changes primarily have financial implications for employers. 

 What does the Inclusion Act specifically provide for?

1. Increase of the equalization levy (!)

Employers, whether private or public, with an annual average of at least 20 employees are already obliged under § 154 SGB IX to fill at least five percent of their positions with severely disabled people. A compensatory levy is payable for each compulsory position not filled by a severely disabled person, the amount of which depends on the number of compulsory positions filled. 

The compensatory levy is staggered and currently amounts to monthly

EUR 140,00 for an employment rate of 3 to 5 percent,

EUR 245,00 for an employment rate of 2 to less than 3 percent, and

EUR 360,00 for an employment rate of less than 2 percent.

The law now provides for a further (fourth) scale: If the employment rate is 0 percent, i.e. employers who are obliged to employ a severely disabled person do not employ a single severely disabled person, the compensatory levy amounts to EUR 720.00 per month.

The fourth scale will be introduced with effect from January 01, 2024. It applies to jobs that are unfilled as of January 01, 2024 and is payable for the first time on March 31, 2025, when the compensatory levy for 2024 is due.

For ›small‹ employers with less than 60 or less than 40 positions to be taken into account, special regulations apply, which provide for lower compensatory levies - EUR 410.00 and EUR 210.00 respectively - if they do not fulfill their employment obligation at all.

2. Use of the resources from the compensation fund

In the future, the funds from the equalization levy are to be focused on promoting the employment of severely disabled people in the general labor market and are to be used exclusively to promote their employment. The previous option of using funds from the equalization levy to support facilities for the participation of severely disabled people in working life (in particular workshops for disabled people) will no longer apply.

3. Fictitious approval for services of the integration office

To speed up and improve approval procedures, a fictitious approval will also be introduced for services provided by the Integration Office to which an entitlement exists (e.g. work assistance and occupational support as part of supported employment). In the future, applications will be considered approved if the Integration Office does not make a decision within six weeks of receiving the application. If the Integration Office has discretion in its decision, the approval fiction does not apply.

4.  Wage subsidy no longer capped

Up to now, the wage subsidy to be reimbursed by the service provider has been limited to 40 percent of the reference amount. The new law provides for higher wage subsidies by removing the cap on the wage subsidy for the budget for work. This will make it more attractive for employers to hire people with disabilities through the Budget for Work. People with disabilities can receive this as an alternative to services in a workshop. The abolition of the cap is intended to ensure that the maximum wage subsidy can be paid throughout Germany even after the minimum wage is raised to twelve euros.

5. Further development of the expert advisory board

The expert advisory board (currently: ›Ärztlicher Sachverständigenbeirat Versorgungsmedizin‹, in future: ›Sachverständigenbeirat Versorgungsmedizinische Begutachtung‹) is also to be realigned. The composition of the expert advisory board is to follow a participation-oriented and holistic approach and, among other things, take greater account of affected persons as experts in the work of the advisory board.

What do employers need to keep in mind?

  • In the future, employers with at least 60 jobs will have to pay EUR 720.00 per month per unfilled mandatory job if they do not fulfill their employment obligation at all.

  • Smaller companies will be subject to lower amounts.

  • In the event of violations, the higher compensatory levy will be payable for the first time on March 31, 2025.

There is also good news for employers: The fine that the Federal Employment Agency could previously impose on employers subject to employment requirements - in the amount of up to EUR 10,000 - to sanction non-employment will be abolished (deletion of Section 238 (1) No. 1 SGB IX).

Employers are also to be supported and advised by single points of contact.

The law will now be forwarded to the Federal President for execution and can then be promulgated in the Federal Law Gazette. Most of the law will come into force on January 1, 2024. Individual provisions will apply earlier. 

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