If the employee is quarantined at home while in Switzerland by order of the authorities for example due to contact tracing, this is beyond their control and they cannot work from home, they are entitled to a special loss of work compensation. This compensation amounts to 80 percent of the income based on the AHV salary that was earned before entitlement to compensation began, up to a maximum of CHF 196 per day. The maximum daily allowance is paid to employees with a monthly salary of CHF 7350 (7350 X 0.8 / 30 days = CHF 196 per day), or self-employed persons with an income subject to AHV of CHF 88 200 (88 200 x 0.8 / 360 days = CHF 196 per day). There is no minimum level of compensation. In the event of partial loss of income, compensation amounts to 80% of the corresponding loss of income and is paid for the entire period.
If the employee has the virus, then the sickness insurance will pay for work lost during the quarantine and recovery period unless a waiting period has been agreed in the insurance contract.
If the employee is quarantined when returning from a high risk area that is on the Swiss government list of high risk countries, they do not have the right to payment by the employer for lost work time, unless they were on official business, or unless they are able to work effectively from home while in isolation.
The employee may however qualify for government compensation if the country they are returning from was not on the high risk list (and not announced as going on the list) when they went to it. In this case they need to apply to the appropriate OASI compensation office.
Please note that not quarantining is an offence under the Epidemie Act, even if a COVID-19 test is negative, and even if the employee entered Switzerland by transiting through a country not on the high-risk list. Details for travellers are here.