Many companies are severely affected by the federal and cantonal governments' measures to prevent the spread of the corona virus, and, depending on the sector, could be faced by sharp falls in
employment and sales. In order to cushion the economic impact as much as possible, and to be able to support the affected people and industries as quickly and as unbureaucratically as possible,
the Federal Council has issued a package of measures for companies and employees that includes the services described below.
Short-time work compensation in general and relief from the corona virus
Short-time work means the temporary reduction or complete cessation of work in a company. In order to compensate for related temporary job losses and to allow the preservation of jobs, the
legislator has provided for the instrument of short-time work compensation. The short-time work allowance will not be granted to companies that are suffering from an ongoing or sustained decline
in sales and/or employment.
Companies that have had to cease their activities in connection with the corona virus pandemic due to official measures or based on the duty of care of the employer are entitled to short-time
work compensation, in accordance with Art. 32 para. 3 of the Unemployment Insurance Act (AVIG). The short-time work allowance is 80% of the employee's wages, and is paid for a maximum of 12
payroll periods within 2 years.
Procedure for receiving the short-time work allowance
- Before the introduction of short-time work, an application for the granting of short-time work compensation must be submitted to the cantonal office. Form: “Voranmeldung von Kurzarbeit"
(Pre-registration of short-time work), for this, a separate form has been created for short-time work resulting from the coronavirus pandemic.
- In spite of the significantly reduced administrative procedure when registering short-time work as a result of the coronavirus pandemic, a general reference to the coronavirus is not
sufficient. A credible explanation has to be given as to why the work losses to be expected in the company are due to the corona virus outbreak.
- If the application is approved by the cantonal office, an application and statement of short-time work must be sent to the unemployment fund specified in the pre-registration within three
months of the end of each accounting period (i.e. month). There is again a simplified form for this in connection with the coronavirus pandemic, consisting of the application and billing of
short-time work compensation.
Expansion and simplification of short-time work
Due to the current exceptional situation in terms of the economy, entitlement to short-time work allowances have been expanded as follows:
- It now includes employees in temporary employment and people enrolled with organizations (agencies) for temporary work
- It has been expanded to include trainees
- It now also includes employees traditionally perceived as employers (e.g. associate partners of a GmbH or AG) as well as people who work in the business of a spouse or registered domestic
partner. A monthly flat rate of CHF 3,320 for a full-time position has been approved by the federal government for these people.
The approval procedure for short-time work has also been simplified as follows:
- The waiting period for the short-time work allowance has been lifted. The employer does not have to contribute in relation to the loss of work
- Employees no longer have to first reduce their overtime
- Various simplifications in the processing of applications, whereby, for example, advance payment of due wages is possible
Compensation for loss of earnings for the self-employed
Self-employed persons who suffer loss of earnings due to official measures to combat the coronavirus are also to be compensated. Compensation in the form of a daily allowance is provided for the
- school closures (daily allowance for 30 days)
- Quarantine mandated by a doctor (daily allowance for 10 days)
- Closure of an independently managed company accessible to the public
The daily allowance to be paid corresponds to 80% of income, capped at a maximum of CHF 196 per day. The compensation is subsidiary. This means that if the beneficiary already receives benefits
from another social or private insurance (e.g. daily allowance from a health insurance company) or continues to receive their wages, they are not entitled to compensation.
Compensation for loss of earnings for employees
Analogous to the self-employed, parents who have to stop working to look after their children due to school closures are also entitled to a daily allowance. There is also a right to compensation
in the event of a temporary cessation of work due to quarantine mandated by a doctor. The daily allowance to be paid corresponds to 80% of income, capped at a maximum of CHF 196 per day.
The compensation is subsidiary. This means that if the beneficiaries already receive benefits from another social or private insurance scheme (e.g. employees who are already in receipt of a
short-time work allowance) or continue to receive their wages, they are not entitled to such compensation. In the case of continued payment of wages, the employer is the entitled be¬neficiary.
Liquidity support for companies
COVID bridging loans Declines in liquidity due to the forced closure of SMEs (sole proprietorships, partnerships, legal entities) as well as due to declines in demand are alleviated by means of
government-guaranteed COVID bridging loans, which are to be paid out by banks and are to be understood as emergency aid.
The following general conditions apply to a COVID bridging loan:
- The loan amount is up to 10% of turnover, or max. CHF 20 million
- Loans of up to CHF 500,000 will be paid out immediately by banks, and 100% guaranteed by the federal government
- Any additional amounts require a brief investigation by the bank, and are 85% guaranteed by the federal government
Further information on COVID bridging loans: https://covid19.easygov.swiss/
Postponement of payment of social security contributions
The companies affected by the crisis can be granted a temporary, interest-free deferral of payments for social security contributions (AHV/IV/EO/ALV). The companies also have the option of having
the amount of regular payments of AHV/IV/EO/ALV on account adjusted if the wage total has decreased significantly. The same applies to the self-employed whose sales have fallen significantly. The
AHV compensation fund administration is responsible for checking the deferral of payments and reducing the account contributions.
Liquidity buffer in the tax area and for federal suppliers
Companies affected by the crisis should be able to extend the payment deadlines for the following taxes/duties, whereby the interest rates are reduced to 0.0%, and no default interest is due:
- VAT (from 21 March 2020 to 31 December 2020)
- Customs duties (from 21 March 2020 to 31 December 2020)
- Special excise duties (from 21 March 2020 to 31 December 2020)
- Incentive taxes (from 21 March 2020 to 31 December 2020).
- Direct federal tax (from 1 March 2020 to 31 December 2020).
Invoices payable to federal institutions are also checked quickly and paid out as fast as possible, without regard for the payment deadlines. This strengthens the liquidity of federal suppliers.
Legal cessation in accordance with the Federal Law on Debt Enforcement and Bankruptcy (SchkG)
From 19th March to and including 4th April 2020, no debts are legally enforced throughout Switzerland. If you have any questions or need support regarding one or more of the above points, we are
at your disposal.