Home-office expenses during the pandemic

Ivana Vidakovic Co-Head of Employment Law, PwC Switzerland 29 Mar 2021

The Federal Council has progressively tightened the requirements of the “COVID-19 Ordinance Special Situation”: an obligation to work from home has been in force since 18 January and is due to remain in effect until the end of April, for the time being. An aspect that was unsettled for a long time has now been clarified: during the pandemic, employers do not owe employees working in a home office any compensation for expenses such as electricity or rent. 
Order issued by the Federal Council for home-office work during the special situation

The COVID-19 pandemic has now been going on for a year. During this time, a large number of employees have begun to work from home. The question of which expenses should be covered by which parties was long a matter of debate. With further elaboration of the COVID-19 Ordinance Special Situation, clarity has been achieved on this point for the time being: employers must arrange for home-office work wherever this is possible based on the nature of the work and provided that such arrangements can be implemented with a reasonable amount of effort. Employers must take the appropriate organisational and technical measures for this purpose. This effectively also means that in cases where home-office work is not directly feasible, it remains non-obligatory. 

In addition, the Federal Council expressly asserts that employees are not owed any expenses for work performed in a home office due to the pandemic (Article 10 (3) of the COVID-19 Ordinance Special Situation). This matter was long the subject of disputes in light of the current legal situation and it could not be uniformly clarified across the board for all situations. 

Equipment, material and costs/expenses 

According to Article 327 of the Swiss Code of Obligations (CO), employers must provide their employees with the necessary tools and equipment for their work. If employees make their private work material available with the employer’s consent, they are entitled to appropriate remuneration for this. Article 327 CO does not constitute mandatory law. It is therefore possible to deviate from this provision and stipulate in the employment contract that employees must bear the relevant expenses (in whole or in part) themselves. 

Article 327a CO, on the other hand, is fundamentally mandatory. Under this provision, employees are to be reimbursed for expenses that are necessarily incurred in the course of their work. The expenses for telephone and internet services as well as electricity and heating costs are particularly relevant here. With respect to home-office expenses, the Federal Council has now temporarily suspended this provision by means of Article 10 (3) of the COVID-19 Ordinance Special Situation. It remains to be seen how the courts will rule on this aspect.

In non-pandemic times, expenses may be reimbursed through a lump-sum expense allowance, with the requirement that the average effective expenses must indeed be covered by this. It is advisable to have the lump sum in such cases approved in advance by the tax authorities and the AHV office. In the absence of approval, the monthly lump sum might be taxed as wages.

What rules apply to work voluntarily performed from a home office?

The potential calculation and payment of lump sums to cover expenses also depends on whether the employees concerned continue to have an adequate workplace at the company premises and whether they are only entitled to work from home or in fact are obligated to do so. Those who work from home at their own request, although they would be able to do their work at the employer’s premises, are not entitled to reimbursement of expenses. In that case, home-office work is performed on a voluntary basis and not for the employer’s benefit.

Precedent set by the Federal Supreme Court

The much-cited ruling 4A_533/2018 of 23 April 2019, in which the Federal Supreme Court awarded an employee compensation for part of his rental expenses, should also be understood in this context. The decisive factor in this case was that the employee did not have a workplace at his disposal, so that he had no other option than to work from home. The employee furthermore used his home office as an archive. According to this ruling, the private work infrastructure was necessary for professional activity and was subject to reimbursement under Article 327a CO. 

Following the latest amendment to Article 10 (3) of the COVID-19 Ordinance Special Situation, it is now clear that this Federal Supreme Court decision cannot be directly applied to a home-office order based on recommendations by the authorities. Home-office work is currently recommended not because of a lack of workplaces, but to protect the health of employees. Although employers are currently obligated to arrange for home-office work, employees still have the option of working (at least partially) at a fully equipped company workplace.

Looking ahead

The pandemic is ongoing and we are facing an ever-changing legal situation. What aspects must be kept in mind for this context? What rules will apply if the current provision on the payment of expenses is no longer in force?

There are no regulations on home-office work in the existing legal provisions. Therefore, it is not possible for employers, within the scope of their right to issue instructions, to require employees to work from home (even partially) and thus to use premises and their own infrastructure for the employer’s benefit. Conversely, employees are not in principle entitled to work from home.

When assessing whether and – if so – to what extent the employer has a duty to compensate expenses, the contractual agreement is the primary point of reference. In the absence of a provision to this effect, all the circumstances of each individual case must be taken into account, such as the duration of the home-office work, the employee’s possibilities for continuing to work at the company premises, the employee’s specific working arrangements etc. In view of the current circumstances and the legal situation, but also in light of the ever-increasing digitalisation and greater flexibility in the working world, it is recommended that these matters be explicitly addressed in the employment contract or via employment regulations.

The key parameters to consider include the following points in particular:

  • Willingness to work from home
  • Type and scope of the work to be performed
  • Working hours, availability, reporting
  • Technical equipment / IT security
  • Data protection
  • Settlement of costs for equipment/material and expenses

Please do not hesitate to contact us for comprehensive advice.  

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Stephen Ammann

Stephen Ammann

Co-Head of Employment Law, PwC Switzerland

Tel: +41 58 792 2904

Ivana Vidakovic

Ivana Vidakovic

Co-Head of Employment Law, PwC Switzerland

Tel: +41 58 792 4764