Coronavirus: Short-time work – What applies currently?

Companies suffering from economic difficulties due to the coronavirus are eligible to the apply for short-time work.

Many companies have to renew their applications for short-time work. The Federal Council has again decided to extend several simplifications.

The novel coronavirus has a strong impact on the profitability of numerous companies. From an employer perspective, measures to ensure the continuity of the company should be considered. One possibility is the implementation of short-time work. For this purpose, short-time work can be applied for with the cantonal employment office. If the conditions are met, the cantonal employment office gives its approval and the company can submit an application for short-time work compensation to the unemployment insurance fund.

The temporary introduction of short-time work serves to compensate slumps in workforce numbers and to preserve jobs. In addition, the social security protection of employees during the period of short-time work and the avoidance of gaps in contribution towards the pension funds are guaranteed.

Employees whose regular working hours are reduced or completely suspended are entitled to short-time working compensation if:

  • the employees are subject to OASI contributions or have not yet reached the minimum age for the obligation to contribute to the OASI;
  • the employees are employed in a non-terminated employment contract;
  • the stoppage is likely to be temporary and their jobs can be maintained through short-time work;
  • the stoppage is eligible.

The stoppage is considered eligible if it is due to economic reasons and is unavoidable and amounts to one tenth of the total working hours which the employees would normally work under normal circumstances.

Employees are free to refuse short-time work and demand full pay instead. However, this may increase the risk of dismissal.

 

In connection with the coronavirus, the Federal Council decided in March 2020 on changes and simplifications with regard to the conditions for payment of the short-time working compensation ("STWC") and its settlement. The situation regarding STWC was therefore legally completely different than it is under other circumstances. The Federal Council has again decided to uphold some of the simplifications for a limited period of time. The following points provide an overview of what currently needs to be considered:

  • The notice period of ten (10) calendar days for the advance notification of short-time work no longer has to be observed. However, the obligation to pre-register still exists. The approval period for short-time work is now six months instead of three months, but only until 31 December 2021. Companies can apply for the retroactive suspension of the prior notification period and the retroactive extension of the approval duration for approvals from 1 September 2020. The corresponding application must be submitted by 30 April 2021.
  • In addition, companies affected by the measures adopted as of 18 December 2020 can apply for approval retroactively from the date on which the corresponding measures entered into force (regardless of the submission date of the prior notification). The corresponding application must be submitted by 30 April 2021.
  • The framework period for insured persons who were entitled to a maximum of 120 additional daily allowances between 1 March and 31 August 2020 will be extended by a maximum of six months.
  • The justification for short-time work can be kept shorter in the pre-notification (however, "coronavirus" alone is not sufficient).
  • The accounting for STWC remains simplified and is carried out in a summary procedure.
  • The waiting period for the purchase of STWC (deductible of the company) will be removed retroactively as of 1 September 2020 until 30 June 2021. The unemployment compensation office will automatically adjust the accounts, employers do not have to take any action.
  • The entitlement to STWC no longer applies to persons in the services of an organization for temporary work.
  • Employees on call who have been working for at least six months on a permanent employment contract at the company that is applying for short-time work are also entitled to STWC. The entitlement is limited until 30 June 2021.
  • For persons in fixed-term employment conditions and for apprentices, STWC can be applied for. This extension of entitlement applies from the payroll period January 2021 to 30 June 2021. For apprentices, the entitlement only applies if the apprenticeship is still guaranteed, but the company has been closed by the authorities and the company does not receive any other financial support to cover the apprentices' salaries. The existing overtime of the previous six months must not be reduced before the STWC is obtained. Furthermore, STWC can be applied for apprenticeship trainers that are responsible for the education of apprentices.
  • The maximum period of entitlement to STWC for an 85% loss of working hours of four months between 1 March 2020 and 31 March 2021 is retroactively revoked.
  • Persons with low incomes have a higher entitlement to STWC with retroactive effect from 1 December 2020 until 31 March 2021. Persons with an income of up to CHF 3,470 based on a full-time workload and a complete absence from work will receive 100% STWC. With an income between CHF 3,470 and CHF 4,340, the STWC is CHF 3,470, which corresponds to a STWC of 80-100%.
  • Intermediate employment is still not added towards the STWC.
  • The maximum period for which STWC can be paid is extended from twelve to eighteen months.

Our team of employment law experts will be happy to assist you in all clarifications in connection of short-time work. For all other concerns arising from the coronavirus from an employment law perspective, we would like to refer you to our magazine article "Coronavirus", which provides answers to numerous questions from the employer and employee perspective as well as to the FAQs on the subject of quarantine. Should the dismissal of employees be necessary despite short-time work compensation, we refer to the following magazine article: Short-time work and termination: how does that work?

Further important information on the subject of short-time work can be found, for example, on arbeit.swiss and on the websites of the individual cantonal offices. Please note that the normally relevant sources of information "AVIG-Praxis KAE" and Seco's information sheet "Short-time working compensation" are not adapted to the specific circumstances of the Corona crisis and therefore do not contain all the latest information.

April 2021| Authors: Michèle Stutz, Raffael Blattmann, Manuela Fuchs, Dschamila Jäggin

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