Partial unemployement: how to cope with Coronavirus

Publication Covid-19

Partial unemployement means a temporary reduction or complete suspension of the company's activity, in any case maintaining the employment relationship with the employee. It is a measure reserved for Swiss companies that is particularly effective in times of economic crisis.

The epidemiological emergency Covid-19 ("Coronavirus") has forced many Swiss companies to apply for reduced work in an attempt to contain the inevitable negative economic consequences of the unstoppable spread of the virus. In this way, companies and employees are protected at a time when orders are shrinking and costs are being cut drastically, while at the same time preventing redundancies.

Reduced work

In order to preserve jobs and face the temporary crisis in which the company finds itself, the entrepreneur can temporarily reduce the work of his employees. Unemployment insurance, in fact, covers part of the salary of employees whose activity has been reduced for a certain period. The pay, in the case of reduced work, amounts to 80% of the salary abolished.

For example, an employee who is 100% employed by a company can see his or her employment and salary reduced by half; however, short-time work ensures that an allowance of 80% of his or her salary is paid for half of the salary not paid by the employer, i.e. a total of 90% of the normal salary.

Who can benefit from short-time work?

Not all employees are eligible for reduced work: the employer can only claim short-time work compensation in specific cases. Employees whose employment relationship has been terminated or who have a fixed or temporary contract are not entitled to short-time work compensation.

AHV/AI/IPG/AD contributions

Short-time work has no influence on social security contributions either. Employers and workers must continue to pay them in full.

How to apply for it

Unlike in the case of unemployment benefit, it is the entrepreneur who receives the partial unemployment allowance. The employer can assert the right to the allowance by agreeing the new measure with the employee and then has 10 days (the postmark serving as proof) to forward the application for partial unemployment to the cantonal office using the forms provided. If the cantonal office where the company resides authorises partial unemployment, the employer must claim all rights to the allowance from the designated cashier. A prerequisite for receiving the partial unemployment allowance is that the employment relationship must not be terminated. If the employer is late in announcing the introduction of short-time working, the loss of employment is only counted from the expiry of the notice period.

In order to cope with the economic consequences of the Coronavirus, the period during which short-time work compensation can be received could be extended from 12 months to 18 months: this was indicated by Federal Councillor Guy Parmelin at a meeting with representatives of business associations and trade unions.

How can employers proceed?

Fidinam SA, through its advisors, has the expertise to assist you in this delicate phase, supporting you in advising you on your human resources organisational processes and making the application for work compensation to the relevant cantonal offices.

Never miss our updates!