• Adrian Tüscher, Partner |

As of 1 January 2021, Switzerland will have a new law concerning paternity leave.
Below is a round-up of the most important aspects of the new paternity leave:

What is the difference between paternity leave and paternity compensation?

From 1 January 2021, the amended legislation foresees the following:

(i) on the one hand, a paternity compensation of a maximum of 14 days’ allowance enshrined in the Income Compensation Act (see below for further details) and
(ii) on the other hand, 2 weeks of paternity leave for fathers employed under Article 329g(1) Swiss Code of Obligations (CO) (fathers may claim this independently of the conditions in place for the paternity compensation).

Who is entitled to paternity compensation/leave?

The child's legal father is entitled to paternity compensation and paternity leave. No such entitlement exists in the case of an adoption of a child.

For the paternity compensation, the father must meet all of the following conditions cumulatively:
 

  • He must be gainfully employed at the time of the birth (either as employee or self-employed) or draw benefits from a social or private insurance (e.g. daily allowances from the unemployment or disability insurance).
  • He must have been enrolled in the social insurance program AHV for at least 9 months prior to the birth.
  • He must have been employed for at least 5 months during this period.

On the other hand, the 2-week-long paternity leave only requires that the employment contract of the legal father is subject to the Swiss Code of Obligations (CO).

The father may claim this if his child is born after 31.12.2020.

How long does the paternity leave last?

Paternity leave lasts 2 weeks, i.e. 10 work-free days. (Paternity leave may not be deducted from the vacation balance.)

When can the paternity leave be taken?

Paternity leave may be taken within the first 6 months after the birth of the child. The leave may be taken in two solid weeks or as single days.

How is the paternity compensation financed?

Just like the maternity compensation, the paternity compensation is financed through the Income Compensation Scheme (ICS). For this purpose, the ICS contribution will increase from 0.45% to 0.50%. as of 1 January 2021. Accordingly, this will bring with it an adjustment to payroll systems.

What is the compensation for loss of income?

The compensation will be paid in the form of a daily allowance and amounts to 80% of the gross income prior to the birth of the child. It is capped at CHF 196 per day. As such, the maximum compensation for two weeks of paternity leave will be CHF 2,744.

Example of an employee: In case the monthly salary was CHF 5,000 before the birth, the compensation will be about CHF 133 per day (5,000*0.8/30).

Example of a self-employed person: In case the annual salary subject to OASI (AHV) was CHF 70,000, the compensation will be about CHF 155 per day (5,000*0.8/360).

How does one apply for paternity compensation?

Paternity compensation must be applied for at the relevant compensation office. Generally, the compensation is applied for by the employee through the employer. This is possible as soon as the leave has been taken in full. The compensation is thus paid only once.

What should employers know about these new requirements?

  • Obligation to continue paying a salary: The employer is not obliged to continue paying the employee’s salary during the paternity leave; the deductible for loss of income is paid by the ICS. However, employers are free to waive the “salary reduction” of 20%, provided they do the same for maternity leave. Depending on the situation, the payroll accounting will need to be adjusted (correct payment during the leave).
  • Requesting income compensation: Income is not compensated automatically. The compensation has to be applied for from the relevant compensation office as soon as the leave has been taken in full. The compensation takes on the form of a daily allowance, which is paid either directly to the father or the employer – depending on whether the latter continues paying the salary during the leave.
  • Prohibited deduction from the vacation balance: In accordance with the Swiss Code of Obligations, employees must be given two weeks of paternity leave in addition to the vacation days due to the employee.
  • Arranging the leave: As a rule, employers may determine the time when the employee may take paternity leave but will have to take into consideration the father’s needs more than in other situations. Moreover, they must make sure that the employee can take the two weeks of paternity leave within the six-month period.
  • Extension of the notice period: For employers who give their employee notice after the probationary period, the notice period will be extended by the number of days of paternity leave not yet taken. Unless there exists an agreement between the employee and the employer to the contrary, the employee has no right to claim the full salary during this notice period. Instead he directly receives the paternity compensation.

Can a father have his insurance and employment time abroad be credited?

Fathers who are Swiss citizens or EU/EFTA citizens may claim the time they were insured/employed abroad in an EU/EFTA member state to count towards the minimum insurance or employment period.

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