Switzerland: Short-time Work Compensation to be Extended to 18 Months

Since April, more than 190,000 companies have applied for short-time work compensation for around 1.9 million employees. This number represents 36 % of all employees in Switzerland.  

As the economic situation remains tense, Swiss government is aiming to give companies more room to manoeuvre and secure jobs; the government therefore decided to extend the maximum period for short-time work compensation from 12 to 18 months in order to avoid a further rise in unemployment. This will allow affected companies to benefit from such compensation for their employees for longer if necessary. The government also decided to reduce the planed waiting period from three to one day. The amendments will apply to the accounting periods from September 2020 to December 2021.

So far, the unemployment insurance fund has paid an additional CHF 20 billion for this matter. Normally, the fund is financed by contributions from employers and employees. If the fund's debt rises to over eight billion francs, the wage contributions must be increased automatically. However, the Federal Council intends to avoid such additional burden on the economy. For this reason, the Confederation will have to bear the corona-related costs for short-time work compensation. The corresponding legislative proposal for consultation has been submitted in July.

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.