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

  1. Example: Running a hairdressing salon as a self-employed person (hairdressing salon).

  2. Example: Running a hairdressing salon (GmbH) with 3 employees (Coiffeursalon GmbH).

  3. Example: Running a painting business as a self-employed person (painting business).

  4. Example: Running a painter's business (GmbH) with 3 employees (Malergeschäft GmbH).

  5. 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.

savings

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)

FAQ Wicki Partners

Wage examples: Short-time work - unemployment

SECO Short-time work Coronavirus


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.


Further information

FAQ Wicki Partners

BSV FAQ


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.