Due to the current situation related to COVID-19, Swiss employers face many challenges. One area is salary payments. We have put together seven considerations for Swiss employers.
1. Secure your payroll function
You need to ensure that your payroll function can operate correctly in term of resources, know-how and technology. Your payroll team should have a back-up plan to mitigate the risks.
Due to the current situation, employee data protection and data security are key. As a result, your IT team should arrange to check remote access in light of increased home office work to ensure the right level of security. It is likely that criminals will abuse the current situation to access unsecured information.
If you use a third-party provider for your payroll, you should request a copy of the business continuity plan of your provider to avoid service interruption.
2. Unemployment benefits – reduced working hours (RHT – reduction de l’horaire de travail)
For partial unemployment benefits, up to CHF 8 billion is available from the unemployment insurance fund. The waiting period for partial unemployment has been reduced to one day until 30 September 2020.
In the event of loss of work (partial/technical unemployment) linked to the coronavirus epidemic, a claim for compensation for reduced working hours (RHT) can be filed with the unemployment office.
Further measures are introduced on a cantonal level such as simplification of application forms or faster examinations. Here are some examples of other actions to make this process easier for employers:
- The days of deficiency are eliminated and paid for by the authorities.
- Cash advances could be made after the claim and before the final statement.
Employers can claim these unemployment insurance benefits when the loss of work:
- is inevitable or fleeting
- reaches at least 10% of all hours normally worked
- is unusual in the industry, profession or business
- affects people who have a permanent contract
- is independent of measures affecting the organization of the company
- differs from public holidays or company vacations
- is unrelated to a collective labor dispute
Potential benefits: The amount of compensation covers 80% of the salary taken into account. This maximum salary amount per employee is CHF 12,350 per month (CHF 148,200 on an annual basis).
3. Social security installments (AHV/AVS)
Due to potential cash flow issue, employers should review and reassess the total salary forecast for the year 2020 with the aim of adjusting the social security contribution installments. This measure will have a positive cash flow effect for employers.
4. Reduction of overtime
Employers should start monitoring overtime of employees and, if possible, reduce and/or compensate overtime as much as possible. This measure will immediately reduce personnel expenses (salaries and employer social contributions) in the profit and loss statement of the employers.