As of the end of August, the Swiss Federal Council resolved to modify the regulations relating to unemployment insurance with regard to COVID-19. This marked an end to the majority of the emergency legal measures introduced in April 2020 in the area of short-time work compensation and a return to the original system. Even so, the following aspects will remain in force until the end of March 2021: the simplified application process for prior notification of short-time working as well as the provision that accrued overtime does not have to be used up before drawing compensation.
According to the amendment of the COVID-19 legislation recently passed by the Swiss Federal Council, other modifications to the regulations are currently under consultation. The following changes are planned: the waiting period is to be removed. In addition, the accounting periods in which the loss of working hours exceeds 85 percent of company working hours are no longer to be considered. Finally, the entitlement to short-time work compensation is to be formally extended to include people in temporary employment and apprentices. The Swiss Federal Council will make a formal decision about this on January 20, 2021, but despite this, the planned measures will come into force on the intended date.
Short-time work compensation is used to preserve jobs and secure wage payments in the event of a temporary loss of work. Short-time work must be applied for by the employer. However, the eligible employees must consent to it. The basic requirement is that at least 10 percent of work is lost over four continuous weeks. Short-time compensation is calculated as follows:
total target hours of eligible employees
– deduction of all paid and unpaid absences
= total hours worked
A loss of working hours due to measures ordered by the authorities (such as the containment of the coronavirus) is normally sufficient, and will lead to compensation if the other requirements are met. There is one exception to this: there is no entitlement to compensation if the company can take advantage of other sales opportunities and thus continue to use an employee's full capacity, or if a private insurance company will cover the losses.
Who is entitled to short-time work?
The special emergency regulations for the expansion of the groups entitled to claim compensation ended on August 31, 2020, with the modification of the regulations relating to unemployment insurance with regard to COVID-19. The simplified application process, as well as the provision that overtime does not have to be used up before drawing compensation, have been extended. They will remain in force until the end of March 2021.
Persons newly entitled to file a claim under the special scheme as of September 1, 2020 are:
Employees are not entitled to compensation for short-time work
- if they are still in their notice period
- if they do not agree to short time
- if their working time cannot be checked sufficiently (e.g. work on call).
The entitlement to claim for short-time compensation has now been removed for:
- employees with temporary employment contracts (entitled to claim until the end of August 2020)
- persons who are considered to be at particular risk because, for example, they suffer from cardiovascular disease, chronic respiratory problems or cancer, and who the employer could not offer adequate precautionary measures, in spite of every effort on its part, because of the operational situation (entitled to claim until the end of June 2020)
- students (entitled to claim until the end of May 2020)
- persons in a position similar to that of an employer (e.g., people employed by their own limited corporation or joint-stock company, shareholders and members of the highest executive body), including spouses or registered partners (entitled to claim until the end of May 2020)
How much is the short-time work compensation?
Commencement and duration of short-time work compensation
The cancellation of the prior notification period was rescinded by the Swiss Federal Council as of June 1, 2020. Since then, short-time working has again had to be notified ten days in advance.
The short-time work compensation can now be claimed for a maximum of eighteen months within two years.
What happens to contributions to social security schemes?
Application for short time work
Compensation for loss of income
Who is entitled to compensation for loss of income due to the coronavirus from September 17, 2020?
The following groups of people are entitled to compensation for loss of income due to the coronavirus:
- self-employed people and managers employed in their own company who suffer a loss of income due to the closure of a business or the ban on events ordered under federal law; these include, among others, freelance artists whose engagements have been canceled
- self-employed people and managers employed in their own company who suffer a loss of salary or income and fall in turnover of more than 40 percent as a result of coronavirus-related measures, for example travel agents, provided that their AHV income is at least 10,000 Swiss francs
- parents with children under the age of twelve who have to interrupt their employment because there is no longer guaranteed childcare for their children; not, however, if short-time compensation is already being paid
- parents of special-needs children under the age of 18 (in the case of an intensive care supplement from the disability insurance scheme [IV]) or 20 (for special schools and institutions) who have to care for these children at home
- people who have to interrupt their employment because of an official or medical quarantine measure; not, however, if short-time work compensation is already being paid.
How much is the compensation for loss of income?
The start and end of compensation for loss of income vary
- Start/end for self-employed people: once all the requirements are met (from September 17, 2020, at the earliest), daily allowances will be paid for as long as the officially ordered measures last.
- Start/end for parents: from the fourth day after all the requirements have been met (from September 20, 2020, at the earliest), until an alternative care solution is found or the measure is lifted, and a maximum of 30 daily allowances are paid out for those who are self-employed. In most cases, the first three days are covered by the employer's continued salary payments.
- Start/end for people in quarantine: as soon as all conditions have been met (from September 17, 2020, at the earliest), a maximum of ten daily allowances will be paid until the quarantine is lifted.
What happens to contributions to social security schemes?
Registration for compensation of loss of income
Good to know for those insured by the Vita Joint Foundations
Nothing changes for employees: the applicable salary for the occupational retirement provision remains unchanged and corresponds to the presumed annual AHV salary. For self-employed people who are insured together with their staff, the following applies:
- the basis for calculating the insured salary for occupational retirement provision is still the expected annual salary.
- the annual income also includes compensation for loss of income due to measures to contain the coronavirus (coronavirus loss of income compensation).