The Swiss Federal government have extended their existing compensation package of 80% salary to employers who have to temporarily lay off (furlough) employees. Because of COVID-19 this has been broadened to include leased and temporary workers, and now applies from the first day of employment regardless of the history or nationality of the employee. This is a welcomed measure designed to enable employees to be kept through the crisis and maintain continuity.
UPDATE: Accurity has managed to secure short time work for contractors with 100% success rate to date, enabling our clients to manage the Corona crisis without having to make unwanted redundancies.
Who is entitled to compensation for short-time work
The essential rules for this cover are as follows:
- There has to be a shortfall of at least 10% work hours for employees collectively in a given business or operational unit. For personnel leasing firms it is not yet clear if a single client can be considered an operational unit.
- The employer must quote a valid reason which is identifiable as a consequence of the pandemic. This could be that the work requires physical presence which is not possible for you under the federal rules, that the work depends on external suppliers or services that are not available, or that there is no demand for the work as a consequence of the coronavirus.
- The employer needs to apply in advance of the work being curtailed.
- People of a pensionable age (65 for men, 64 for women) are not eligible.
- There is no minimum time of service required of an employee.
- The employee cannot be under notice of termination.
- Normally temporary workers or those on fixed term contracts where there is no early termination allowed are not able to benefit, but this has been waived for the current situation.
Who is newly included under the decision of the Federal Council of March 20, 2020.
The following people and stakeholders are now also entitled to short-time work allowance:
- People in an apprenticeship.
- Temporary employees, or those with fixed term contracts, even if there is no notice period included.
- Employees with decision making powers: e.g. partners of a GmbH, who work as employees against remuneration in the company.
- People who work in the business of the spouse / registered partner can claim a flat rate of CHF 3320.- for a 100% position (=80% of 4’150).
Can all companies apply for compensation with reference to the coronavirus?
No. General reference to the coronavirus is not sufficient to justify a claim. Employers must provide credible evidence of why the loss of work to be expected in their company is due to the occurrence of the coronavirus. The absence from work must be causally related to the occurrence of the virus.
What form does the compensation take?
- 80% of the gross salary (up to a gross salary limit of CHF 12’350 per month) payable based on the shortfall, plus the employer charges on this amount for social premiums (AHV/IV/ALV)
- The remaining 20% salary does not have to be covered by the employer
- The social premiums, family allowance, pension premiums, accident/sickness insurances on the 100% salary continue to be paid by the employer.
- Holiday continues to be earned based on full salary.
- Compensation can be paid for up to 12 months in any 2 years, although there is a 4 month limit on compensating more than 85%.
How does an employer apply for compensation
- The employer submits an initial form for the business, including an organigram.
- They then submit an application for each affected organisational unit
- Finally an account of hours and employees is submitted, together with required attachments, once the missing hours are known.
- The employer then finalises the payroll with the affected employees, replacing 100% salary with 80% compensation for the missing hours involved. The employee pays only premiums on the 80% salary. The employer however on 100% salary.
Contractors, employees and employers in Switzerland
If you are working or are an employer in Switzerland, how will the spread of the Virus affect you? You will find the answers in our Coronavirus FAQ.
As a leading authority in the employment services sector for over 20 years, Accurity continues to channel its expertise into offering our clients, contractors and recruitment agent partners a top-class service. Our brand claim is “we make Switzerland easy for you” and behind that claim is our motivated and trustworthy team which will continue to be there for all of our stakeholders in this challenging, but rich learning environment.
Further questions about managing freelance professionals in Switzerland? just ask us.