Covid-19: Entitlement to loss of earnings - new provisions

David Gisin
David Gisin
Direktor, Treuhand
Covid-19: Entitlement to loss of earnings - new provisions

The coronavirus still influences our lives and the economy. During the second wave, new provisions were introduced in connection with short-time work compensation (KAE). We would like to draw your attention to these changes. Read about the additional support the federal government offers the affected companies.

The coronavirus still influences our lives and the economy. The second wave has shown its impact has all but dwindled. Every day we hear reports in the media about the corona case numbers and the economic impact of the pandemic. The current economic situation is very tense. Read about the additional support the federal government offers the affected companies.

 

With its help package amounting to around 70 billion Swiss francs, the Swiss government has looked to prevent a wave of companies’ bankruptcies and looked to keep the rise of the unemployment rate in check.

During the second wave, new provisions were introduced in connection with short-time work compensation (KAE). We would like to draw your attention to these changes.

 

From 1 September 2020

  • most of the exceptional measures (expansion of stakeholders, additional financial relief for companies) will cease to apply and there will be a return to the original system of short-time working compensation.
     
  • the maximum duration of short-time working will revert to three months. Consequently, at this point in time, permits that are older than three months will lose their validity. The companies affected must submit, in advance, a new notification of short-time work.
     
  • the maximum period for which short-time working compensation can be paid will be 18 (instead of 12) months.


Until the end of December 2020, the following will continue to apply:

  • the simplified pre-notification procedure, and 
  • the summary procedure for settlement.
     

Retroactive from 1 September 2020

  • Entitlement to short-time working compensation for employees on call. On 28 October 2020, the Federal Council decided to amend the COVID-19 Ordinance on Unemployment Insurance (available only in GermanFrench and Italien). The amendment grants employees on call entitlement to short-time working compensation under certain conditions. See media release from the Swiss Confederation dated 28.10.20 (available only in GermanFrench and Italian).
  • The scheme provides for an entitlement to short-time working compensation for salaried employees on call

    • who have been employed for at least six months on a permanent basis, or
    • who are in a fixed-term employment relationship with contractual termination options.

This new regulation closes a gap for employees on call and retroactively ensures the entitlement to short-time work compensation. The rights of short-time work employees are therefore ensured since March 2020. This temporary directive is limited to the 30th of June 2021. Further information can be found on the federal government's website and at SECO (arbeit.swiss).

 

Mit sofortiger Wirkung 

Employees who have had to interrupt their employment due to a quarantine measure are entitled to loss of earnings. You can apply for the corresponding compensation from the relevant AHV compensation fund.

 

Supplementary information:

  • State Secretariat for Economic Affairs (SECO): new coronavirus: package of measures to cushion the economic consequences (only available in GermanFrenchand Italian)  
  • Factsheet SECO: With these measures, the Confederation continues to support the economy in the second wave (only available in GermanFrench and Italian)

I will be happy to answer your questions about short-time work and other accounting and tax-related uncertainties at any time. Please do not hesitate to get in touch with me.