COVID-19 Ordinance: update on unemployment insurance

Melanie Imper Senior Associate Treuhand/Corporate Support Services Switzerland, PwC Switzerland 10 Feb 2021

In its press release from 20 January 2021, the Federal Council extended a number of articles from the «COVID-19 Ordinance on Unemployment Insurance»; primarily the provisions for short-time work compensation. These entered into force retroactively on 1 March 2020. On 19 March 2021, the deadlines of the measures relating to the simplified short-time work compensation procedure and the waiting period were extended until 30 June 2021.

The «Ordinance on measures for unemployment insurance in connection with the coronavirus (COVID-19)» regulates extending the extension of framework periods; the exclusion of periods where working hours were reduced by over 85% between the start of March and the end of August 2020; vocational trainers’ eligibility for short-time work compensation and the summary procedure for short-time working arrangements.

Topic

Resolution and conditions

Period of validity

Eligible loss of working hours: temporary staff and apprentices

The loss of working hours of temporary staff and apprentices are eligible. Apprentices must fulfil three conditions:

  • The training must be ensured.
  • The business must be officially closed.
  • The employer must not claim any other financial support for the apprentices.

From the accounting period January 2021 to 30 June 2021

Eligible loss of working hours: employees on call

Employees on call whose employment level varies considerably (more than 20%) are entitled to short-time work compensation. Provided that they have been working at a company with short-time work compensation for at least six months.

From 1 March 2020 to 30 June 2021

Eligible loss of working hours: vocational trainers

If a company has already registered short time working arrangements, compensation can also be requested for vocational trainers. The company must provide evidence that it is not possible to provide training for apprentices unless there is adequate supervision. In such cases, the short-time work compensation only covers the time that the trainer should have been on reduced hours, but actually spent training apprentices. These hours qualify as an eligible loss of work. Proof of eligible loss of work must be provided for all hours that were not dedicated to training. This is required in order for short-time work compensation to be paid.

From 1 March 2020 to 31 December 2023

Waiting time

If the employer is entitled to claim compensation for eligible short time working arrangements in the event of lost working hours, no waiting period is deducted.

The unemployment insurance funds adapt the statements retroactively and make the back payments to the employer.

From 1 March 2020 to 30 June 2021

Additional income

In accordance with the decision of the Federal Council on 26 August 2020, employees who earn income from interim employment during short-time work, momentarily do not have to inform their employer of this. Therefore, nor does the employer have to inform the fund.

From 1 March 2020 to 30 June 2021

Overtime

The employer doesn’t have to deduct overtime that is accumulated outside the short-time work period.

From 1 March 2020 to 30 June 2021

120 extra days of daily allowances

For insured persons who were entitled to a maximum of 120 extra daily allowances, the framework period for the allowance receipt was extended by the period of eligibility. The maximum extension is six months.

From 1 March 2020 to 31 August 2020

Maximum duration of benefits

The Unemployment Insurance Act also stipulates that the maximum duration of benefits in the event of a loss of working hours of 85% or more may exceed the maximum of four accounting periods.

From 1 March 2020 to 31 March 2021

Accounting

The applicable loss of earnings is usually based on the contractually agreed salary for the last payment period prior to the introduction of short time working measures. According to the COVID-19 Ordinance, loss of earnings is still calculated using the summary procedure. This also applies to companies with low incomes. In this case, the loss of earnings must be calculated individually for each income category. There are three categories, depending on the monthly income for full-time working hours. The compensation for short-time work is:

  • Income up to CHF 3’470: 100%
  • Income between CHF 3’470 and CHF 4’340: CHF 3'470 (pro-rata calculation in the event of partial loss of earnings)
  • Income from CHF 4’340: regular compensation of 80%

Usually, the employer is required to send the fund a statement of the short-time work compensation. While the COVID-19 Ordinance applies, the compensation is, however, paid as a lump sum of 80%.

From 1 March 2020 to 31 March 2021

Changes to compensation for short-time work

Employers were only required to renew the advance notice of short-time working arrangements due to COVID-19 loss of working hours if the short-time work lasted for more than six months. This passage has been cancelled since 1 September 2020 and the rules of the Unemployment Insurance Act apply once again. Therefore, advance notice must be renewed if the short time working arrangements last more than three months (Article 36 (1) of the Unemployment Insurance Act).

Contact us

Melanie Imper

Melanie Imper

Senior Associate Treuhand/Corporate Support Services Switzerland, PwC Switzerland

Tel: +41 58 792 28 32