Continued wage payment during coronavirus: what do I need to know?

Source: iStock / Scharvik

The coronavirus outbreak in Switzerland is creating a new set of challenges for employers and employees alike. Who will pay the wages if the company has to close temporarily? What happens to people on fixed-term contracts? Comparis answers the most important questions on the subject of wages and salaries.

FAQs: wages and salaries

Will I still get paid if I am healthy but my employer has mandated a quarantine?

If a mandatory quarantine on healthy, able-bodied people has been called by the authorities or your employer, your employer is still obliged to continue paying your wages (page in German, French and Italian only). Employers are also required to protect anyone who is particularly at risk. If home office is not possible or the options are limited, the employee is put on leave. The employer continues to pay the wages in this case. You must inform your employer that you belong to the high-risk group. The employer may request a doctor's note that confirms you are at risk. If you have voluntarily gone into quarantine because you came into contact with an infected person, you should contact your doctor or the FOPH helpline to find out what to do next: +41 58 462 21 00. Note: there is no guarantee of continued wage payment for people who have voluntarily spent time in a high-risk area. There are currently different legal opinions on this matter, but there is no Supreme Court decision to refer to at the moment.

Self-employed people who have been placed in quarantine by a doctor will receive a daily allowance from the government as defined in the income replacement scheme, unless they are already receiving compensation or covered by insurance. The daily allowance corresponds to 80% of their income or a maximum of 196 francs per day. The maximum number of daily allowances payable to self-employed people in quarantine is ten.

My employer did not take out any daily benefits insurance. Who will pay my wages if I become infected?

Your employer is legally obliged to continue paying wages in accordance with the Bern, Basel or Zurich payment scale (page in German, French and Italian only). This applies to healthy people in quarantine as well as those who have a doctor’s note. How long your wages will be paid is based on your length of service (in German, French and Italian only).

I am on an hourly wage or temporary contract. The company I work for has closed temporarily. What now?

On 20 March, to cushion the impact of the “extraordinary situation”, the Federal Council increased the scope of its short-time work compensation programme. It now extends to employees on fixed-term contracts or an hourly wage. Companies should also be able to apply for short-time work compensation for apprentices, so that they don't lose their apprenticeship. Another change is that employees do not need to use up their overtime before benefiting from short-time work compensation. Employers must pay the employees affected 80% of their lost earnings on the usual pay day. Along with the contractually agreed salary, this also includes the regular allowances also stated in the contract (pdf in German, also available in French and Italian).

Calculate short-time work salary

I am of pensionable age but have not yet retired. I am now no longer able to work because I belong to a high-risk group and home office is not possible. Am I entitled to any compensation?

People of pensionable age do not pay unemployment insurance contributions. This means that they are not entitled to short-time work compensation. Those aged 65 and over are considered high risk. For these high-risk groups, employers are obliged to introduce suitable measures to ensure that working conditions comply with the current recommendations of the FOPH. Otherwise, the persons affected are required to take leave in order to continue receiving their wages. It is, however, the employer who must make this decision. If at-risk employees decide to stop working of their own accord, they will lose their entitlement to wages.

My company has introduced short-time working, but wants to defer payment of salaries to employees. I am supposed to go without 20% of my salary for three months. This amount should be paid out in 2021 instead. Is this allowed?

Employers can only defer the payment of salaries if employees exceptionally consent to this in order to help alleviate the liquidity problems faced by the employer and retain their jobs.

If an employer is forced to cancel an event following the Federal Council’s ban on events involving over 1,000 people due to COVID-19 and has no work for its employees, are they entitled to continue receiving their wages?

The employer must continue to pay them without any restrictions. The cancellation falls under the operating risk of the employer. It can always changes its plans and hold a smaller event. The situation only changes if the Federal Council declares a lockdown on an entire area, for example with a ban on going out. This would then constitute an act of nature. The rule would then affect everyone and not just a particular type of business. In this instance, short-time work compensation will cover part of the losses.

FAQs: short-time work

What is the procedure for employees taking sick leave during short-time work?

The same rules apply to taking sick leave whether you are working as usual or are on short time. Some employers demand a doctor's note straightaway, others after three or more days.

How do business owners go about getting approved for short-time work?

Approval for short-time work is obtained through unemployment insurance and employers must apply for it. There are three steps involved:

  • 1. Obtain the written consent of your employees for short-time work. This is a legal requirement. Use this form to do so (in German; French and Italian also available on the website).
  • 2. Submit your request for short-time work to your cantonal department for unemployment insurance. You will need to notify the department beforehand. You can do this by telephone, but it must be confirmed in writing. Alternatively, you can use the short-time work form (in German, French and Italian only), which is designed specifically for applications relating to COVID-19. Here are the links to the cantonal departments.
  • 3. Once your application has been approved by the cantonal department, you can claim for short-time work from your cantonal unemployment fund using the payment application form for short-time work compensation. You will receive your payment within one month.

I do not want to consent to the short-time work agreement. Will I lose my job?

Short-time work is designed to ensure that wages can continue to be paid for a certain period, if only at a limited level. The aim of this measure is to prevent employers from having to dismiss employees and then recruit again when the economy recovers. If employees reject short-time work, the employer may be forced to consider dismissals, including those with the option of altered conditions of employment.

Which salary applies if an employee hands in their notice during short-time work?

Until the notice period begins, i.e. until the end of the month, short-time work pay applies. Once the notice period starts, the full salary is paid until the end of the employment contract.

Does a waiting period apply to short-time work compensation?

No, the Federal Council removed the two-day waiting period for claiming short-time work compensation on 20 March.

How long will the COVID-19 arrangements for short-time work apply?

On 1 July 2020, the Federal Council extended the maximum period for claiming short-time work compensation from 12 to 18 months. A waiting period of one day also applies. This amendment will remain in force until 31 December 2021.

FAQs: taxes

Can I deduct the additional costs incurred for the weeks/months of home office work from my taxable income?

You can only deduct costs arising from working from home if the work completed at home constitutes a significant part of your professional activity (main or secondary occupation). In addition, the work must take place in a room primarily designated for this purpose.

If you complete professional or business tasks at home only occasionally, you will not be entitled to deduct a portion of your rent. If the current extraordinary situation continues for several months, the tax authorities may be lenient. However, you would have to show in the tax return that the room costs for you home office are higher than the allowances for business expenses.

Do you have any other questions about coronavirus? See our article on the subjects of health insurance, employment, pensions and travel. We also answer questions on the topics of property and moving home and mortgages.