Distinction between compensation for short-time work and compensation for loss of earnings
For many SMEs, the distinction between short-time work compensation and compensation for loss of earnings within the framework of COVID-19 support is confusing. The following examples show the different possibilities of financial support via social insurance.
Information on the SME instant loans can be found here:
Example company
Example: Running a hairdressing salon as a self-employed person (hairdressing salon).
Example: Running a hairdressing salon (GmbH) with 3 employees (Coiffeursalon GmbH).
Example: Running a painting business as a self-employed person (painting business).
Example: Running a painter's business (GmbH) with 3 employees (Malergeschäft GmbH).
Example: Running a consulting company (GmbH) with 3 employees (consulting company GmbH).
Requirements for short-time work (KAE) and its calculation
The short-time work must be justified (the keyword coronavirus is not sufficient as justification).
Employment relationship without notice (persons of AHV age are excluded).
Owners (if employees) are also entitled to KAE. The recording of hours could be problematic here.
Working time must be controllable (on-call workers have no entitlement).
For each payroll period, at least 10 per cent of the total hours normally worked by the enterprise's employees are affected.
Waiting period only one day.
Calculation
Short-time work compensation amounts to 80 per cent of the creditable loss of earnings, i.e. 80 per cent of the wage attributable to the hours lost.
The employer is obliged to pay the short-time allowance to the employees on the ordinary payday.
The employer is obliged to settle social security contributions according to normal working hours.
Maximum salary covered by ALV CHF 148,200.00.
Example company
Hairdressing salon
No entitlement to KAE.
Hairdressing Salon Ltd.
The 3 employees and the owner cannot work at the moment. 80% of the salary (CHF 3'360.00) is covered by ALV.
Painting business
No entitlement to KAE.
Painter Business Ltd.
The 3 employees are only employed at 40% (short-time work 60%). 40% of the salary (CHF 4'200.00:100X40%=CHF 1'680.00) is paid by the employer, the remaining 60% is covered by 80% (CHF 2'520.00:100X80=2'016.00) by the unemployment insurance.
Consulting company GmbH
The 3 employees only work 50% (short-time work 50%). 50% of the salary (CHF 14'000.00:2)is paid by the employer (CHF 7'000.00). The remaining 50% is covered at 80% (CHF 7'000.00:100X80=CHF 5600.00)by the ALV up to the maximum amount of CHF 4'940.00.
Who has to make the request?
The employer registers with the Cantonal Office of Economic Affairs and Employment.
Further information
Short-time work compensation (Wicki Partners)
Compensation for loss of earnings (EO) for self-employed persons in the event of ordered closure of a business
Requirements
Basic requirement:
are compulsorily insured with the AHV (i.e. live in Switzerland or are gainfully employed in Switzerland);
and are self-employed.
Self-employed persons who suffer a loss of earnings due to the closure of a business or the prohibition of an event ordered by federal law (Art. 6 para. 1 and 2 of COVID-19 Ordinance 2) are entitled to compensation.
There is no insurance cover.
ATTENTION: If only certain activities are no longer permitted under federal law (e.g. certain wellness treatments in the case of complementary therapy facilities), then explicit reference can be made to "partial closure of operations" in the application.
Example company
Hairdressing salon
Yes, there is a claim, as the operation had to be stopped.
Hairdressing Salon Ltd.
There is no entitlement.
Painting business
There is no entitlement, as there is no obligation to close the business.
Painter Business Ltd.
There is no entitlement.
Consulting company GmbH
There is no entitlement.
Calculation
See below
Income replacement (EO) for parents
Requirements
Basic requirement:
are compulsorily insured with the AHV (i.e. live in Switzerland or are gainfully employed in Switzerland);
and are self-employed or employed.
Children are younger than 12 years.
External childcare is not possible (incl. cantonal emergency services).
(If home office is possible, care is possible).
The absence is not covered voluntarily by the employer (continued payment of wages) or by insurance.
Duration of the claim max. 30 days
Example company
Hairdressing salon
Yes, there could be a claim, home office is possible here at most for admin activities. Income replacement for the self-employed would probably be the better option.
Hairdressing Salon Ltd.
Yes, there could be a claim.
Painting business
Yes, there could be a claim. Home office is only possible for admin. Admin. activities possible.
Painter Business Ltd.
Yes, there could be a claim. Home office is only possible for admin. Admin. activities possible.
Consulting company GmbH
No entitlement if home office work is possible.
Calculation
See below
Income replacement (EO) for persons in ordered quarantine
Requirements
Basic requirement:
are compulsorily insured with the AHV (i.e. live in Switzerland or are gainfully employed in Switzerland);
and are self-employed or employed.
The absence is not covered voluntarily by the employer (continued payment of wages) or by insurance.
Max. during 10 days
Example company
Hairdressing salon
Yes, there could be a claim
Hairdressing Salon Ltd.
Yes, there could be a claim. The employee is responsible for the registration
Painting business
Yes, there could be a claim
Painter Business Ltd.
Yes, there could be a claim. The employee is responsible for the registration
Consulting company GmbH
No entitlement if home office work is possible.
Calculation examples of income replacement
Hairdressing salon
The annual income converted into daily earnings is decisive for the calculation of the compensation; their last personal AHV contributions before the start of the entitlement are used for the determination. For this purpose, the annual income is multiplied by 0.8 and divided by 360 days. Here, annual income CHF 45,000.00, which results in a daily allowance of CHF 100 (45,000 X 0.8 / 360 days = CHF 100/day).
Hairdressing Salon Ltd.
An average monthly salary before the start of the claim was CHF 4,200, so the compensation is 144 francs per day (4200 X 0.8 / 30 days = CHF 112/day).
Painting business
The annual income converted into daily earnings is decisive for the calculation of the compensation; his last personal AHV contributions before the start of the entitlement are used for the determination. For this purpose, the annual income is multiplied by 0.8 and divided by 360 days. Here, annual income CHF 45,000, which results in a daily allowance of CHF 100 (45,000 x 0.8 / 360 days = CHF 100/day).
Painter Business Ltd.
An average monthly salary before the start of the claim was CHF 4,200, so the compensation is 144 francs per day (4200 X 0.8 / 30 days = CHF 112/day).
Consulting company GmbH
The monthly salary before the start of the claim was CHF 14,000.00. The compensation is capped (not 14,000.00 x 0.8/30 = CHF 373.00). It amounts to a maximum of CHF 196.00/day, i.e. CHF 5,880.00 for 30 days.
Registration for replacement employment
The registration must be made by the person concerned.
The AHV compensation funds with which you are registered are responsible.
This article was written by RA Yves Gogniat.
Arife Asipi is available for individual questions and as a direct contact person.
For more information on the legal situation under COVID-19, see our FAQ.