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23 March 2020

The Top Ten questions on Reduced Working Hours (RWH)

In the last few days, we were able to assist many clients in a variety of questions in relation to reduced working hours ("RWH"). In this context, we were in close contact with the competent authorities and were able to gain valuable experience and knowhow. We are happy to share our insights. What is more, last Friday (20 March 2020), the Federal Council approved further measures to cushion the economic consequences of the spread of the coronavirus.

Here are 10 short answers with useful tips on RWH:

1. My company is nationally active and has operations in various cantons. Must RWH applications be submitted separately for each business unit?

In principle, the cantonal office of the canton in which the company (or individual departments of the company concerned) is based is responsible. This means that, strictly speaking, companies with business units in different cantons would have to make a separate advance notification for each business unit. However, various cantonal offices now accept uniform advance notifications including locations outside the canton. We recommend discussing such a procedure in advance with the cantonal office of the headquarter.

2. Does the introduction of RWH require the consent of the employees?

Yes, but the majority of the cantonal offices responsible no longer require employees' written consent to RWH to be enclosed with the advance notification, but instead provide for the consent form to be submitted subsequently. Individual cantons are content with the employer's confirmation that all employees have given their consent to RWH.

3. Which qualifying period (waiting period) applies?

In the meantime, the waiting period has been fully lifted. The employer no longer has to contribute to the loss of working hours.

4. May RWH be ordered immediately after advance notification?

Yes, provided that the conditions for RWH are met. The account is then settled as per the end of a month. It is now even possible to advance due salary payments via the RWH benefits scheme.

5. On which salary parts do the social security contributions have to be paid?

On the original salary before RWH, whereby the full employee deductions may be made from the reduced RWH salary. The employer's contributions to AHV, IV, EI and ALV for the loss of working hours are reimbursed by the unemployment insurance fund. The employer's pension fund and accident insurance contributions are not reimbursed. The employer can now also apply to the AHV compensation fund for a temporary (interest-free) deferral of social insurance contributions.

6. Are employees in an employer-like position also entitled to RWH benefits?

Yes. Managing employees are now also entitled to RWH benefits. This includes, for example, shareholders of a GmbH who also work as employees in the company.

7. What salary and which salary components must be paid?

The employer must pay the employee salary for the actual (reduced) work performed, and 80% of the loss of earnings on the regular payday. Regularly paid contractual allowances must also continue to be paid. If the employer's financial circumstances permit, he may pay 100% of the employee's salary despite RWH. The maximum insured income is CHF 12,350.

8. Do overtime and flexitime credits have to be balanced before RWH is introduced?

No. Employees no longer have to balance their overtime and flexitime credits in advance in order to benefit from RWH benefits.

9. Can RWH also be applied for fix-term employment relationships?

Yes, it is now also possible to apply for RWH benefits for employees in fixed-term employment relationships and for temporary employees. The same applies to apprentices.

10. Can self-employed persons apply for RWH?

No. However, self-employed persons who have been forced to close down their business due to official measures and who suffer loss of income as a result can apply for special compensation. The compensation is paid out as a daily allowance in line with the Compensation for Loss of Earnings Act and amounts to 80% of the income earned. The daily allowance is limited to CHF 196/day.

Our Employment Law team is happy to assist should you have any questions on these topics.

Author: Marc Ph. Prinz

Category: Employment Law

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