Due to the current situation related to COVID-19, Swiss employers face many challenges. One area is salary payments and related topics. As the situation evolves, new questions are emerging. We explore seven new considerations for Swiss employers.
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Paying salaries in the COVID-19 crisis - Part 2
Paying salaries in the COVID-19 crisis - Part 2
1. Should the Swiss employer continue to pay 100% of salaries to employees on short-time work (Kurzarbeit/RHT)?
In principle, the employer should advance the benefits at 80%, while continuing to pay the social contributions on 100% of the salary. There is no obligation for the Swiss employer to maintain the salary of the employee at 100%. However, a Swiss employer is free to continue paying employee salaries at 100%.
2. How do you compute the employee and employer social contributions for employees receiving short-time work benefits?
During the period of short-time work benefits, the employee and employer social contributions of the relevant employees should continue to be computed based on 100% of the salary.
3. How does it work for cross-border employees working from home in such in France or Germany?
Home office for limited time and in the context of this crisis does not allow foreign authorities to consider that the employee works more than 25% of working hours in the foreign country such as France or Germany. Therefore, cross-border employees remain subject to Swiss social security legislation due to the current crisis.
4. Can cross-border employees benefit from the short-time work benefits?
Yes, employees can benefit from these measures regardless of their place of residence (in Switzerland or in a country of the European Union).
5. What are the key items to take into consideration for the computation of the advance short-time work benefits to be made to the Swiss employer?
- The indemnity will be based on the salary of the relevant employees at 80%
- The maximum basis salary per employee is CHF 12,350 per month (CHF 148,200 on an annual basis)
- Based on recent information, there is no waiting day to claim this benefit
- 6.375% of social contributions will be added to the benefit for short-time work related to the employer social contribution
- Employees with limited employment contract and apprentices can now be included in the claim for short-time work
- Based on the recent information, overtime does not need to be compensated or reduced due to the current situation
- The unemployment office should be in charge of the payment of this benefit
6. What kind of compensation is relevant for determining the benefits for short-time work?
The following types of compensation subject to social security should be taken into consideration when determining this benefit:
- Fixed salary (including 13th month if applicable)
- Benefits in kind
- Holidays payments
- Various allowances
- Variable compensation such as gratuities and/or bonus payment
The following types of compensation should be excluded from the basis when determining this benefit:
- Overtime payments
- Fidelity indemnity or benefits
- Family/children allowances
7. Can I defer payment of my social security installments (AHV/AVS)? How should I proceed?
Swiss employers hit by this crisis will have the possibility of deferring provisionally and without interest the payment of contributions to social insurances (AVS/AHV, AI, APG, AC). They will also be able to adjust the usual amount of installments paid under these insurances in the event of a significant drop in payroll. The AVS/AHV compensation offices are responsible for examining the deferral of payments and the reduction of deposits.
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