Short-Time Work Compensation for Swiss Company during COVD-19
The Swiss government has simplified the rules on the claims for short-time work compensation for employers who face difficulties due to COVID-19.
WHAT DEFINES SHORT-TIME WORK?
Short-time work is a temporary reduction of work in a company, while the employers can still maintain the contracts with their employees. The main purpose of the compensation is to prevent employee redundancy. Unemployment insurance (Arbeitslosenversicherung, ALV) will cover a proportion of the salary costs for the employees for a certain period. Unlike unemployment benefits, this benefit is paid to the employer. The employer must also obtain a written consent from employees that they agree to work reduced hours and receive such compensation.
ADJUSTED RULES FOR THE SHORT-TIME WORK COMPENSATION DUE TO COVID-19
The Swiss government has abolished the 10-day prenotification and eased the application process. However, prenotification must still be submitted to the authorities. Normally employers can only claim for such compensation for employees who completed compulsory education; have not yet reached the pension age according to Swiss law (65 for men and 64 for women); and have an ongoing permanent contract with the company. However, to minimize unemployment caused by the epidemic, the government has extended the eligibility for the compensation to include:
workers in fixed-term employment contract
apprentices
persons who have employer positions such as CEO
persons who work in the company of his/her spouse or registered partner
persons in the risk group of COVID-19
The compensation for the short-time work amounts up to 80% of the lost earnings. This means that, for example, if an employee who works full time has the working hours reduced to 40%. The company will pay 40% of the salary. The unemployment insurance will pay 80% of the 60%, which is the reduced hours, as the short-time work compensation.
If you would like us to assist you with the application for such benefits or general HR services such as employee registration, payroll, registration for social security and child benefits, please get in touch.