Order Regarding the Advance Notice of Short-Time Work
In order to claim short-time work compensation from your local unemployment insurance fund, you must have a decision from the Office of Labor.
If you have not yet registered for short-time work with the Office of Labor in your canton of residence, you can do so using the information provided here.
Application for and Settlement of Short-Time Work Compensation
Preparing Payroll—A Major Challenge
Companies that receive compensation from unemployment insurance for short-time work must continue to pay the full amount of statutory social security contributions, as before (see AHV Information Sheet)
What should you keep in mind?
Employee Social Security Deductions and Insurance Premiums
These contributions remain due on the employee’s normal salary—that is, 100 percent of the salary prior to the reduction due to short-time work—and must be deducted in full from the employee’s new gross salary.
Withholding Tax
Unlike the deductions listed above, the withholding tax deduction is based on the actual gross wages paid, i.e., the gross wages reduced in the case of short-time work.
Maximum insurable wage: CHF 12,350 per month
You can only claim short-time work compensation up to a maximum of CHF 12,350 per month; you will receive 80% of this amount as compensation.
2020 Wage Statement
It should not be forgotten that the effective gross wage after wage reductions is relevant for the gross wage shown on the wage statement.
The short-time work compensation must be recorded in the wage statement under item 7 “Other benefits” with the effective amount.
So how do you calculate the employees’ new gross pay?
In order to calculate the new gross salary, certain details must be determined in advance:
– contractually agreed gross monthly/hourly salary
– contractually agreed scheduled working hours for the employee per month
Calculate Monthly Target Work Hours
The collective bargaining agreements specify a benchmark of 4.35. This results in the following formula:
Weekly working hours × weekly factor (4.35) = working hours per month
Case A:
Monthly Wage and Partial Short-Time Work
Assuming the employee is still able to work and is not on 100% short-time work, he receives his full wage for the time worked and 80% of his wage for the time not worked.
Example: Lena, CHF 2,500 for 40 hours per month.
- Hours Worked: She was only able to work 5 hours, so 2,500 : 40 hours of scheduled work time × 5 hours actually worked = CHF 312.50 gross
- Compensation for Short-Time Work: She was unable to work 35 hours and receives 80% of that amount, 2,500: 45 hours × 35 hours = 1,944.44 in lost wages, and 80% of that = CHF 1,555.55
As a result, Lena will now receive CHF 1,868.15 gross instead of CHF 2,500 gross.
Case B:
Monthly salary over CHF 12,350 and partial short-time work
Example: Hans, CHF 14,000 for 187 hours
- Hours Worked: He was only able to work 50 hours, so 14,000 : 187 hours of scheduled work time × 50 actual hours = CHF 3,743.31 gross
- Compensation for Short-Time Work: He was therefore unable to work 137 hours, so CHF 12,350.00 (maximum wage) ÷ 187 hours × 137 = CHF 9,047.86, and 80% of that = CHF 7,238.28
As a result, Hans will now receive only CHF 10,981.59 gross instead of CHF 14,000 gross.
Budget for Non-Wage Labor Costs for Employers
You must also budget for employer contributions to the pension fund based on the full salary. Short-time work compensation covers only a portion of the employer’s non-wage labor costs.
Example: An employee earns CHF 5,000 gross per month. You know that you are liable for 12% in employer social security contributions on this gross salary; however, the federal government reimburses you only 6.375% of that amount (AHV, IV, ALV). Thus, despite short-time work, your costs still amount to CHF 281.25—5.625% of CHF 5,000—which you must continue to budget for and pay.
Notice Periods
Please note: These provisions apply without restriction and are based on the relevant employment contracts. If an employee is in the probationary period or during the first year of employment, it is quite possible that longer notice periods will apply after the short-time work period, depending on the length of employment and the terms of the employment contract. (For example, an employee may be in a probationary period before short-time work begins and then in a regular employment relationship with the corresponding notice period afterward.) Therefore, if it turns out that the company cannot continue to employ these employees in the future, they must be terminated in accordance with proper procedure, and the now-applicable notice period must be observed or compensated. The company cannot apply for short-time work compensation for the terminated employees during the notice period.