Short-time work compensation (KAE)

With short-time compensation, unemployment insurance covers part of the wage costs over a certain period of time. This is intended to prevent layoffs in the event of short-term and unavoidable work stoppages. 

Unlike unemployment compensation, benefits are paid to the employer. However, each employee has the right to refuse short-time compensation. The employer must continue to pay these employees their full wages. For the employees, however, there is then an increased risk of receiving notice of termination.

The reduction in working hours must be temporary and serve to preserve the jobs affected. In addition, the loss of work must be unavoidable; thus, the company must prove that it has taken all appropriate measures to minimize the damage. The loss of work can either be caused by economic factors or be due to other circumstances that cannot be avoided by the company. Regardless of the exact nature of the work stoppage, it must always be an extraordinary situation (i.e. it must not be part of the normal operational risks). The affected employees must have agreed to the reduction in working hours. Further information can be found in the Guidance Pre-notification and Guidance Settlement Form.

A loss of working hours cannot be taken into account if it is caused by operational organizational measures (such as cleaning, repair or maintenance work) and is attributable to other usual and recurring interruptions to operations. Work loss caused by circumstances that are part of the normal operating risk or by seasonal fluctuations in employment is also not chargeable. The work loss may not fall on holidays or result from company vacations. In addition, the employer may not claim it exclusively for a few days immediately before or after holidays or company vacations. The loss of work may not be claimed for persons who are not entitled to short-time work compensation.

No; the temporary support measures related to coronavirus ended as of June 30, 2022. 

In principle, all contributory employees who are in a non-terminated employment relationship, have not yet reached the AHV retirement age and are employed for an indefinite period at a fixed workload are eligible.

No entitlement has persons who:

• are in an apprenticeship relationship;
• are in the service of an organization for temporary work;
• in an employment relationship for a definite period;
• already receive an AHV pension or have reached the ordinary retirement age;
• in their capacity as shareholders, as financially involved in the business or as members of a supreme operational decision-making body can determine or significantly influence the decisions of the employer, as well as their collaborating spouses;
• are in a terminated employment relationship.

Yes, provided that all requirements are met. The same eligibility requirements apply to hourly-paid employees as to monthly-paid employees. In principle, there is only an entitlement to short-time compensation if there is a contractually agreed working time or if, in an employment contract on call, the workload shows only minor fluctuations and thus proof of the chargeable loss of working hours can be provided.

In principle, there is no entitlement to short-time work if the loss of working hours cannot be determined due to a lack of fixed working hours.

For employment relationships that over a longer period of time (at least 6 months), show only minor fluctuations, claims for compensation can be made if necessary.

Short-time compensation can only be claimed for persons who are in an employment relationship that has not been terminated, since short-time work should serve to preserve jobs. 

In the event of a plant closure, the employee is entitled to KAE until the plant closure has been decided, e.g. by the Board of Directors or the Executive Board.

As soon as bankruptcy must be assumed, the loss of work for the employees can no longer be considered temporary and the  short-time compensation no longer serves to preserve the jobs. From this point on, therefore, the entitlement to short-time work compensation ceases.

The employer is obliged to advance the short-time compensation and to pay the affected employees 80% of the chargeable loss of earnings on the ordinary payday. The short-time compensation corresponds to 60% of the actually proven loss of earnings. 

During short-time work, the employer shall pay the full statutory and contractually agreed social security contributions corresponding to normal working hours. He is entitled to deduct the employees' full contribution shares from their wages, unless otherwise agreed. 

The employer is obliged to keep the originals of all forms and documents relevant to the registration and settlement of bad weather compensation for five years and to submit them to the Office of National Economy (AVW) upon request. The AVW is entitled to carry out or have carried out an inspection at the employer's business at any time within the retention period.