14 August 2025

Short-time work in Response to the new US-Tariffs

  • Articles
  • Legal
  • Employment / Immigration

On August 7, 2025, U.S. import duties of at least 39% on Swiss products took effect. Some companies have already applied for short-time work. Our article explains KAE requirements and implementation.

  • Patricia Neuhaus

    Legal Associate

Eligibility Criteria for Short-Time Work

The eligibility criteria for short-time work are set out in the Federal Act on Compulsory Unemployment Insurance and Insolvency Compensation (AVIG). Additional provisions are contained in the respective Ordinance (AVIV).

To apply for short-time work for their employees, companies must cumulatively meet the following requirements:

  • Reduced or suspended working hours: The normal working hours of the affected employees are reduced or entirely suspended.
  • Insurance coverage: The affected employees are covered by the unemployment insurance or would be covered if they had reached the minimum age for the Old Age and Survivor’s Insurance (AHV).
  • Compensable loss of work: The loss of work is due to economic reasons and is unavoidable.
  • Minimum scope: The loss of work amounts to at least 10% of the normal working hours in the company during a period of one month (or four weeks).
  • Unterminated employment relationship: The affected employees are in an employment relationship that has not been terminated.
  • Temporary nature: The loss of work is expected to be temporary, and it is anticipated that jobs can be retained through short-time work.

Eligibility is particularly not met if short-time work is applied for in respect of employees in fixed-term-contracts, apprentices, or employees who do not agree to work short-time. The SECO has announced that loss of work related to the new US-tariffs is generally considered compensable if the company either:

  • directly supplies goods to the USA; or
  • is part of a supply chain whose end products are subject to US-tariffs.

Since each application for short-time work is reviewed individually, companies must explain in detail how they are affected by the US-tariffs and why the loss of work is unavoidable.

Pre-Application for Short-Time Work

All relevant forms for applying for short-time work are available on the arbeit.swiss website (eServices und Formulare für Kurzarbeitsentschädigung, the forms are not available on English). The pre-application must be submitted digitally to the relevant cantonal office.

It is important to submit the pre-application at least ten days before short-time work shall begin. If submitted later, the loss of work may only be covered after the expiry of the ten-day notification period.

The cantonal office may request additional documents if the pre-application is incomplete. This delays the start of the compensation and may result in the KAE not being approved in time. Therefore, it is advisable to submit the form fully completed and with all required information from the outset.

Key-Questions on Short-Time Work

Certain questions frequently arise in connection with short-time work. Below, we answer some of them:

1. For how long can short-time work be applied for?

  • Within a two-year framework period, KAE is paid for a maximum of 12 months (settlement periods) under the AVIG. Due to the current economic situation, the maximum settlement period was extended to 18 months by an amendment to the AVIV. A parliamentary initiative to extend the entitlement to 24 months is currently under discussion.
  • For a loss of work exceeding 85% of the normal working hours, KAE may be claimed for a maximum of four settlement periods. Thereafter, short-time work can still be claimed for lower levels of work loss.
  • Settlement periods are usually calendar months.

2. What if an employee does not agree to short-time work?

  • Short-time work is only possible with the consent of the affected employee.
  • Without consent, the employee must remain employed at the regular salary.
  • Termination remains permissible, but the usual rules on unfair dismissal applies.

3. Are there special rules for new hires or cross-border commuters?

  • The same requirements apply.

4. Is short-time work available for board members and executive management?

  • KAE cannot be claimed for persons who set or significantly influence the company’s decisions. This includes, in particular, members of the board of a company limited by shares and partners or managing partners of a limited liability company.
  • For members of executive management, actual decision-making authority is decisive and each case must be assessed individually.

5. How much is the KAE during short time work?

  • The compensation amounts to 80% of the loss of earnings, including contractually agreed regular allowances.
  • The maximum insured salary is CHF 12’350.
  • Whether a bonus is included depends on whether it is contractually agreed and constitutes part of the salary.

6. How is the regular working time demonstrated?

  • KAE can only be claimed if the company keeps working time records that document the usual hours worked by the affected employees.

7. Can short-time work be extended?

  • Yes, but the extension must also be pre-applied for with the cantonal office at least ten days before the current authorisation expires to avoid disruptions.

8. What if only part of the business is affected?

  • KAE can also be applied for in respect of a business unit, provided it has its own personnel and technical resources and is under independent in-house management or provides services that could also be offered by an independent business on the market.
  • The requirements must be substantiated to the cantonal office, e.g., by submitting an organisational chart or a description of the business unite.

Do you have further questions about short-time work? Is your company affected by the new US-tariffs? Our employment law experts will be happy to assist you with this matter and other employment law matters.


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