Authors: Sabine Taxer, Stefan Müller
Subject Area: Labor Law
Extension and simplification of short-time working
Due to the current exceptional economic situation, the Federal Council has decided to extend and simplify short-time working. With the extension, groups of people who were not eligible for short-time working compensation under the previous regulations are now entitled to compensation for short-time working. A large number of simplifications have also been introduced.
The instrument of short-time working compensation makes it possible to compensate for a temporary loss in working hours and in order to maintain jobs. Unemployment insurance covers part of the salary costs of employers affected by short-time working for a certain period of time. This is intended to prevent dismissals as a result of short-term and unavoidable loss in working hours.
With the Ordinance on Measures in the Area of Unemployment Insurance in connection with Coronavirus (COVID-19) of 20 March 2020 and its amendment on 25 March 2020, as well as the amendment to the Unemployment Insurance Ordinance (AVIV), the Federal Council has issued an extension and simplification of short-time working. Due to the current exceptional economic situation caused by the COVID-19 pandemic, people who work on a fixed-term, temporary, on-call or employer-like basis, as well as people who are in an apprenticeship relationship, are also severely affected. All these persons were previously excluded from the right to short-time working. In addition, the Federal Council has greatly simplified the procedure for applying for short-time working compensation.
- The waiting period for pre-notification has now been completely abolished. As usual, the pre-notification must be submitted to the competent cantonal office. Short-time working can now also be pre-registered by telephone. The employer must then immediately confirm the advance notification by telephone in writing. Employees must agree to be put on short-time working. The employer must clarify this in advance and confirm it in writing in the pre-notification.
- The justification for short-time working can be kept shorter in the pre-notification as long as it can be credibly attributed to the COVID-19 pandemic.
- Now, short-time working compensation can also be paid to employees with fixed-term employment contracts and to people working for an organisation offering temporary work. Loss of working hours can also be credited again for persons in an apprenticeship.
- The group of persons entitled to short-time working compensation will be extended to include more employees on call. Previously, if the level of employment fluctuated by more than twenty (20) percent, they were not entitled to short-time working compensation. Now they can be included in the applications, provided they have worked in the same company for at least six (6) months.
- In addition, short-time working compensation can now also be paid to so-called employer-like employees. Employer-like employees are, for example, shareholders of a limited liability company who work as salaried employees in the company. Persons who work in the business of the spouse or registered partner can now also benefit from short-time working compensation. These persons can claim short-time working compensation in a lump sum of CHF 3,320.-. The amendment to the 19-Ordinance on Unemployment Insurance of 25 March 2020 now expressly states that this is a lump sum which is not subject to any reduction.
- Employees no longer have to reduce their overtime before they can benefit from short-time working compensation.
- The approval period for short-time working has been extended from three (3) to six (6) months in order to reduce the number of applications and speed up the approval process.
- To ease the burden on companies, the Federal Council has abolished the maximum period of entitlement to short-time working compensation in the event of a loss of work of 85 % hours for the duration of the extraordinary situation. In the current situation, the current period of four (4) months, during which the loss of work may exceed 85 % of working hours, would pose a financial threat to companies.
- Finally, in order to relieve the burden on the cantonal enforcement bodies, the compensation for short-time working during the extraordinary situation will be calculated summarily. In view of the large number of applications, it is no longer possible to settle the short-time working compensation for each individual employee. Thanks to this simplified procedure, it should be possible for payments to be made as quickly as possible.
- Interim employment will no longer be counted towards the short-time working compensation.
The employer can claim short-time working compensation for those employees who have completed compulsory schooling and have not yet reached the retirement age in accordance with the Old Age and Survivor’s Insurance. In addition, the employees must be in an employment relationship that has not been terminated.
The short-time working compensation amounts to eighty (80) percent of the creditable loss of earnings. The decisive factor for the assessment of contributions is the contractually agreed salary up to a maximum amount of the relevant salary within the meaning of the Old Age and Survivor’s Insurance in the last payday period before the start of short-time working. The maximum insured income within the meaning of the Old Age and Survivor’s Insurance is CHF 148,200.00 per year or CHF 12,350.00 per month.
The COVID-19 Ordinance on Unemployment Insurance applies for a period of six (6) months from its entry into force.
Disclaimer: The information contained in this document is intended for general information purposes only and does not constitute legal or tax advice. This content is not meant to replace individual advice from competent professionals in a specific case.