The short-time working compensation scheme has so far been an important response to the negative consequences of the COVID-19 pandemic. The Federal Council has taken various measures to ensure that as many companies and employees as possible benefit from short-time working compensation, for example by extending the scheme to additional categories of employees. The measures have now partly been changed again with a few new rules applying as from 1 April 2021. In this blog, we give an overview of what the current rules are and how these will change in the future (status: 1 April 2021).

Current rules

Short-time working (STW) is a temporary reduction in contractual working hours with the consent of the employee concerned. However, not every employee or company may benefit from the STW compensation scheme.

a. Requirements and entitlements

Companies, suffering a loss of business due to the pandemic (for economic reasons or because of measures taken by the authorities), could apply for STW compensation provided that:

• The attributable loss of work is at least 10% of normal working hours
• the working time is controllable
• the employees put on to STW are entitled to compensation and their employment is not terminated
• the loss of work is not caused by circumstances relating to normal operational risk
• loss of work is temporary in nature.

The scheme applies to employees above school-leaving age and below the statutory retirement age. This includes employees with a fixed-term contract with regular working hours that can be terminated by notice, on-call employees employed for more than six months and employees on hourly pay, provided that all other requirements are met. Additionally, apprentices may be eligible under certain conditions.  

Generally, compensation is paid at 80% of the loss of earnings attributable to the lost working hours, without deduction of a grace period and up to a maximum insured salary of CHF 148,200. Employees with a salary below CHF 4,430 receive a maximum compensation of CHF 3,470.

b. Application

Application for the payment of compensation follows a simplified procedure:

• Employers have to file a notification to the cantonal authority, at the latest on the day that short-time working begins.
• Once short-time working has been authorised, applications for payment of compensation have to be submitted within three months of the calendar month to which the payment related.
• The eligible loss of work and lost working hours is determined at company/business unit level and not on an individual basis for each employee.
• Employers are reimbursed for all hours lost, i.e. no grace period applies.

Latest rules as of 1 April 2021:

• In cases of STW exceeding 85% of the normal working hours, the maximum duration of eligibility of four months again applies.
• Authorisation of STW is valid for six months, as of 1 July 2021 up to 31 December 2021 at the latest. Authorisations granted from 1 September 2020 can be extended retrospectively to six months.
• The notification period has been reduced from 10 to 0 days. Employees can apply for a retrospective waiver of the notification period for authorisations granted from 1 September 2020.
• Employers affected by COVID-19 measures adopted from 18 December 2020, can apply retroactively for an authorisation for STW from the date of the entry into force of the corresponding measure - regardless of the submission date of the notification.

For retrospective claims, the corresponding application and reports of the total hours lost must be submitted to the competent body by 30 April 2021.

Outlook: What will change?

Certain entitlements will be expiring in the upcoming months and employers should look out for them, such as changes in the scheme for low-income employees, the extension of entitlement to individuals in temporary employment and apprentices, and also the applicability of the simplified procedure and the revocation of the grace period, which expire on 30 June 2021.

Deloitte view

It is important to look at individual cases to assess entitlements and the applicable rules. Should you want to know more about this (or any other employment law issues) our specialists will be happy to assist you.

Key contacts

Jürg Birri - Partner, Deloitte Private

Jürg leads the legal practice at Deloitte in Switzerland. He joined the firm as a Partner in 2019. Jürg is an Attorney-at-Law and a Federal Tax Expert and advises clients in the financial services industry on a wide range of tax and regulatory issues. He is in charge of a large team of lawyers and experts who specialise in business, corporate, M&A, employment, as well as private client and financial market law.

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Christine Bassanello – Senior Manager, Deloitte Legal

Christine leads the Swiss Employment Law Practice of Deloitte in Switzerland. She joined as a Senior Manager in March 2020. Christine is a Swiss-qualified attorney-at-law with over 11 years of professional experience. She advises Swiss and international clients on all public and private employment law matters and has an in-depth knowledge of immigration law.

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Emanuelle Brulhart – Senior Manager, Deloitte Legal

Emanuelle is a Swiss qualified attorney-at-law with over 15 years of professional experience, of which more than 13 years have been within the legal practice of Deloitte in Switzerland. She advises and supports both international groups and Swiss-based companies on employment-related topics as well as social security and immigration law matters.

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