Under- or over-coverage of short-time work compensation Under- or over-coverage of short-time work compensation
Since the procedure for settling and applying for SWC has been simplified, but at the same time an individual calculation of the short-time work-related wage reduction is required for the calculation of the employee's wages, there may be an under- or over-coverage of SWC.
In order to make it as easy as possible to apply for short-time work compensation (SWC) and have it paid out quickly, the usual administrative procedure for employers has been greatly simplified within the framework of the COVID-19 measures. The simplified procedure for pre-registration as well as the simplified procedure for settlement and application for SWC are expected to apply until 30 September 2021.
Simplified procedure for the settlement of SWC
The summary procedure for the settlement of SWC does not consider employees individually but collectively. Thus, according to the simplified procedure, the percentage loss of working hours is calculated only on the basis of the total lost hours and contractual target hours, which is then offset against the OASI-liable wage total of all eligible employees (see example below). In contrast, when the employer pays the short-time allowance to the affected employees, each payment must be calculated individually and thus each employee must be taken into account individually. This unequal procedure can lead to the short-time work compensation not exactly matching the amount paid out by the employer to the employee.
Example of over- or under-coverage
If, for example, a company whose employees with a rather low wage have many lost hours and employees with a high wage have few or no lost hours, the SWC will tend to be too high. Consequently, there is a surplus in coverage. Conversely, if employees with a high wage have many hours of absence and employees with a lower wage have few hours of absence, the SWC may be too low, resulting in a shortfall in coverage.
Simplified example (without taking social insurance into account):
A company has the following 10 employees who are entitled to SWC
- 6 employees A have a salary of CHF 4,500 per month and 80 lost hours each.
- 4 employees B have a salary of CHF 8,000 per month and 40 hours of absence each.
Simplified statement to the unemployment insurance fund
- Total lost hours: 640h
- Total target hours: 1,600h (assumption: 160 target hours per person in the corresponding month)
- Percentage of work lost: 40%
- Total wages: CHF 59,000
- Short-time work compensation: CHF 18,880
Individual settlement with the employees
- Employee A has an hourly wage of CHF 25.76 (80% for the short-time work portion: CHF 20.61) and receives a SWC of CHF 1,648.85 each.
- Employee B has an hourly wage of CHF 45.80 (80% for the short-time work portion: CHF 36.64) and receives a SWC of CHF 1,465.60 each.
- Total to be paid to employees CHF 15,755.50
In the above example, this results in a surplus of CHF 3’124.50.