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COVID-19: Back To Work in Switzerland

1. Emergency Measures

Switzerland was affected by the Coronavirus (COVID-19) outbreak beginning in late February 2020. In response to the crisis, the Swiss government enacted rather harsh lockdown measures, which included travel restrictions, border closures, the closing of schools, shops and restaurants, among others. The economic impact of the COVID-19-related measures was cushioned by short-time working compensation and loans for companies impacted by the pandemic. Many employers consciously decided to rent smaller premises in search of office space and quickly switched to home office (remote work) arrangements for their employees. Indeed, 50% of the Swiss workforce was working from home during the peak of the epidemic. Experience in this regard has been consistently positive, so that homeworking will very likely continue even after the COVID-19 crisis has ultimately passed. While many companies are struggling with liquidity problems as a result of the crisis, the large waves of redundancies that had been predicted, have, fortunately, not yet materialised. However, only in the months to come, will we be able to accurately assess the true economic consequences of COVID-19.

Decrees, orders or guidelines in effect and pertaining to reopening facilities.

In March, the Federal Council issued measures to combat the spread of the coronavirus (COVID-19 Regulation 2) – legal restrictions and requirements such as bans and rules of hygiene and conduct were implemented. Since 27 April 2020, the Federal Council has gradually relaxed the measures and re-opened establishments and facilities that had to be closed during the lockdown.

Every facility which is accessible to the public needs to have a protection concept in place that minimises the risk of transmission. The obligation to draw up a protection concept also applies to those establishments and facilities that did not have to interrupt their activities. Standard protection concepts are available on the website of the State Secretariat for Economic Affairs. The website is available in German, French and Italian: https://backtowork.easygov.swiss/

Optimal approach to keep track of the latest updates.

The website of the Ministry of Health contains updated information on the current situation in Switzerland and abroad, with the news about the latest measures and regulations, including explanations, contact information and links to instructive websites. The site is available in German, French, Italian and English: https://www.bag.admin.ch/bag/de/home.html

The website of the State Secretariat for Economic Affairs contains an overview of all press releases on the coronavirus as well as information on financial aid for companies, short-time work, measures for job seekers, compensation for loss of earnings for self-employed persons and employees, measures in the area of labour law, health, protection at the workplace, information on protection concepts and more. The site is available in German, French and Italian: https://www.seco.admin.ch/seco/de/home/Arbeit/neues_coronavirus.html

2. State Aid

Government subsidies and special relief resources allocated to support employers, and workers, in their efforts to maintain employment and pull through the crisis.

The following government subsidies and special relief resources have been put in place in Switzerland to support employers and workers in their efforts to maintain employment and pull through the crisis:

  • Financial Support For Companies

Emergency Aid by Means of Guaranteed COVID Bridging Loans – With bridging loans (COVID-19 loans), affected companies are supported as unbureaucratically, specifically and quickly as possible. Applications for loans can be submitted until 31 July 2020. Loans of up to CHF 500,000 are disbursed within a short period of time and are 100% secured by the Confederation. The interest rate on these bridging loans is currently 0%. Bridging loans exceeding the amount of CHF 500,000 are 85% secured by the Confederation. The lending bank contributes 15% of the loan. Such loans can amount to up to CHF 20 million (including CHF 500,000 from COVID-19 loans) per company and therefore require a more comprehensive bank audit. For these loans, the interest rate is currently 0.5% on the loan secured by the Confederation.

Deferment of Payment of Social Security Contributions – Companies affected by the crisis are granted a temporary, interest-free deferral for the payment of social security contributions.

Liquidity Buffer in the Tax Area – Businesses have the possibility to extend payment periods without having to pay interest on arrears. For this reason, the interest rate for value added tax, customs duties, special excise taxes and incentive taxes is waived during the period from 21 March 2020 to 31 December 2020. The same regulation applies to direct federal taxes from 1 March 2020 until 31 December 2020.

Measures in the Area of Occupational Pension Schemes – The Federal Council has also decided that employers may temporarily use the employer contribution reserves they have built up to pay employee contributions to the occupational pension scheme. This measure should make it easier for employers to bridge liquidity shortages. The measure has no effect on employees; as under normal circumstances, the employer deducts their contribution share from their wages and the entire contributions are credited to them by the pension fund.

  • Short-Time Work

A company may temporarily reduce the working hours of its employees or cease operations completely if the company gets into financial difficulties, without fault. Employees affected by short-time work receive compensation from the unemployment insurance, amounting to 80% of the wage loss. The maximum annual salary insured, amounts to CHF 148,200 per year.

Due to the coronavirus pandemic, the application process for short time work has been simplified and the range of beneficiaries widened. Some short-time work emergency measures have already been lifted and others will end on 31 August 2020. However, companies will continue to apply for short-time work to safeguard jobs that are at risk due to the COVID-19 crisis.

  • Compensation for Loss of Earnings for Self-Employed Persons

Self-employed persons who suffer loss of earnings due to official measures to combat COVID-19 are compensated in the following cases: i) medically prescribed quarantine; and ii) forced business closure. The compensation corresponds to 80% of the income and amounts to a maximum of CHF 196 per day.

3. Health and Safety Measures

Requirements mandated by law or any official guidance.

According to article 6a of the COVID-19 Regulation 2, establishments and businesses which are publicly accessible, must prepare and implement a plan for precautionary measures. Such measures include home office, social distancing, hygienic actions, etc.

Measures typically implemented by employers and the associated legal risks, limitations, obligations and issues to consider.

According to Article 6 of the Swiss Labour Law Act, the employer is obliged to prevent any impairment to the health of his employees. He therefore has to take all measures which are appropriate and reasonable under economic circumstances. The employer must additionally ensure that the measures provided by the Federal Council and the Ministry of Health are observed and implemented at the workplace. These measures include:

  • home office (if possible)
  • social distance at the workplace (at least 2 meters or additional measures such as minimising contact time, etc.)
  • hygiene measures (regular washing and disinfecting of hands, work surfaces, doorknobs, elevator buttons, stair railings, coffee machine and other work equipment, especially if used by various employees, as well as routine ventilation).

In particular situations, the use of protective equipment such as gloves, masks or goggles may be advisable. However, such equipment, unlike in other countries, is not generally required in Switzerland.

Special regulations apply for employees at high risk. Persons over 65 years of age and all persons with high blood pressure, chronic respiratory diseases, diabetes, diseases and therapies that weaken the immune system, cardiovascular diseases and cancer are considered as particularly at risk. Employers must allow employees at high risk to work from home. If a person at high risk is only able to perform his/her work at the workplace, the employer must adapt the workplace or working procedures accordingly, to ensure that the person is adequately protected. If the employer fails to do so, the employee at risk must be placed on leave with continued salary. Employees at high risk must provide their employer with a personal declaration to that effect. The employer may request a doctor’s certificate.

4. Teleworking

Policies and procedures for telework once the business reopens.

The Federal Office of Public Health recommends that home offices be approved and made possible during the pandemic. Swiss law does not have any special provisions in place regarding the home office. The Swiss Supreme Court recently ruled that an employer must contribute to rent and other costs of the home office such as internet, if the employee is not provided a working space at the employer’s premises and therefore, is obliged to work from home. Whether this also applies to the home office during the pandemic is unclear. We highly advise to regulate the conditions of working at home in a separate agreement with the employees.

5. Managing COVID-19-Related Employee Issues

Management of quarantine, childcare and medical leave for employees affected by COVID-19.

Quarantine – Employees are entitled to compensation in the event of interruption of employment due to a quarantine ordered by a doctor or a public order. Loss of earnings is regulated in accordance with the Income Compensation Act and paid as a daily allowance. The daily allowance corresponds to 80% of the income and amounts to a maximum of CHF 196 per day. The compensation is limited to 10 daily allowances.

Child Care – Parents who had to interrupt their employment due to school closures in order to care for their children were entitled to compensation. On 11 May 2020, it became mandatory for public schools in Switzerland to have been re-opened, and since  6 June 2020, grandparents are no longer advised to stay away from their grand-children. Therefore, the special compensation for childcare is, for the moment, no longer in place.

Medical Leave – Employees suffering from COVID-19 receive paid medical leave. The length of the paid medical leave is dependent on whether the employer has a daily per diem sickness insurance in place, which normally covers 80% of the salary for a maximum of 720 days. If no such insurance is available, the length of the paid medical leave depends on the years of services. In the first year of service, the entitlement amounts to three weeks of full pay.

Employees who fear infection and refuse to work.

Healthy employees who do not belong to a risk group may not simply stay away from work for fear of infection. However, employers have a duty to protect the health of their employees and need to take the necessary appropriate measures (see section III. Health and Safety Measures, above). If home office is not an option and the employee refuses to work despite the fact that adequate protection measures have been put in place, the employer does not need to continue paying the employee’s salary. Whether or not a termination for cause may be justified depends on the specific circumstances.

Disclosure of employees who are infected.

There is no mandate for the employer to notify authorities if an employee is infected. If possible, we advise to obtain permission from the infected employee to inform members of the workforce and co-workers about the infection.

Other issues.

Canceling of holidays due to travel bans – In principle, the employer can insist that an employee already takes planned vacation days, as long as the vacation allows the employee to recover, even if the employee cannot pursue his/her original holiday plan due to travel bans.

6. Cost-Reduction Strategies

To what extent can employers implement the following cost-reduction strategies as a result of COVID-19, and what are the primary limitations on each? 

  • Furloughs.

According to Swiss employment law, the employer may in principle, determine the time of the holidays. In doing so, he must take into account the wishes and needs of the employees. If the employer determines the time of the holidays, he must give sufficient advance notice. Under normal circumstances, holidays must be determined at least three months in advance. Some scholars argue that during the pandemic the three months rule does not apply. As of today, there is not case law or pending claims before the courts on this issue.

  • Salary reductions.

Salary reductions cannot be introduced unilaterally by the employer. The employer either needs the consent of the employee or is required to introduce a salary reduction by giving notice, and at the same time, offer new employment with a lower salary. Salary reductions need to be economically justified.

  • Redundancy.

There are no special regulations on redundancy during the pandemic. Swiss labour law upholds the freedom of both parties (employer and employee) to terminate the employment in accordance with the contractual arrangements. Special consultation obligations apply in case of collective redundancies.

  • Facility closure.

There are no special regulations regarding facility closures during the pandemic.

7. Best Practices

Tips, recommendations and common pitfalls.

The “best practice” depends on many factors such as industry, size of company, possibility to work from home, etc. for many companies, one very helpful measure of support was the possibility to apply for short time work compensation and the possibility to work from home. The latter should be accompanied by clear instructions regarding work time, workplace environment, expense regulations and reporting.

Any questions

Ask our member firm lelex Attorneys at Law in Switzerland