What is RWH?
The Reduction of Working Hours (RWH) is a temporary reduction or a complete interruption of the company’s activity due either to a decision on the part of the authorities or for economic reasons.
The RWH engenders the right to compensation over a certain time span (max. 12 months; the decision framework is valid for 6 months in the case of Covid-19*) which is covered by unemployment insurance (AC).
Therefore, 80% of the payroll costs are taken into consideration for employees whose normal working hours are reduced. The goal is to halt redundancies due to decreased activity.
* If the reduction in working hours is greater than 85%, the measure is valid for a maximum of 4 months.
What conditions must the employer fulfil?
The employer must fulfil the following conditions:
- The reduction must be due to economic reasons
- The loss of work is not due to corporate risk
- The loss must be at least 10% of the total hours normally worked in the company – an average of the whole company
- The reduction must be temporary
- The employment contract has not been cancelled
- The working hours must be controllable (a record kept of the hours worked)
Who is entitled to daily indemnities (IJ) for reduced working hours (RWH-RHT)?
The “classic” beneficiaries, mentioned in Art. 31 LACI, are the employees:
- Whose normal working hours have been reduced or suspended
- Who have the obligation to contribute to the UI (AC) or have not yet reached the minimum age for contributing to the AVS
- Whose employment has not been terminated
Cross-border employees are also covered by this measure.
Within the framework of the exceptional measures taken by the Confederation due to Covid-19, new categories of employees are eligible to receive indemnities:
- Apprentices under the age of 18 years, even if they have not yet reached the minimum age for contributing to the AVS.
- Business leaders: those who determine or have considerable influence over the decisions taken by the employer. N.B. for these persons, the RWH shall be calculated on the basis of a determining flat-rate monthly wage of a maximum of 3320 francs for full-time employment.
- Employees with a fixed-term contract and temporary employees (on assignment for a temporary employment agency)
Which categories are excluded from the RWH (RHT) procedure?
The RWH is not valid for:
- Employees whose employment contracts have been terminated
- Employees absent with a medical certificate (who are covered by loss of earnings insurance)
- Employees who have reached retirement age (64/65 years old)
- Employees who do not accept the reduction in working hours
- Employees on maternity leave
- Employees on holiday
- Employees without a childcare solution: Cf. following § “Allowance for loss of earnings and Covid-19”
- Employees with an on-call contract
Can staff members eligible for RWH refuse to accept the daily RWH indemnities?
Each of the eligible employees has the right to refuse the indemnities when RWH occurs; the employer must then continue to pay the employee their full salary. However, this entails an increased risk of future loss of employment for this employee.
Is the company obligated to make up the salary to 100%?
There is no obligation for a company to make up the RWH indemnities to 100% (meaning an additional 20%), however it has the right to do so. This has no influence on the unemployment insurance’s decision.
Must the employer provide proof of the employee’s agreement?
Those employees touched by the RWH measure must be informed and give their agreement with the introduction of reduced working hours. An RWH attestation or an e-mail confirming the employee’s agreement may be good practice.
What about social security payments?
Although the daily indemnities for RWH cover 80% of the salary, all the social security contributions remain due on 100% of the salary.
Which hours must be reported?
Within the framework of Covid-19, it is mandatory to report the hours actually worked.
Why is accounting for the hours actually worked compulsory?
A control of the hours worked is required to be able to prove the reduction of hours per employee to the SECO [State Secretariat for Economic Affairs] to justify the daily indemnities for RWH.
Does the period of RWH entail a right to vacation days?
The compensatory allowance scheme for the reduction of working hours does not give rise to a suspension of the employment contract. The right to vacation days therefore continues during the period that the company receives indemnities for RWH.
N.B.: If an employee takes vacation days during the period in which their company receives indemnities for RWH, it will not receive indemnities for these vacation days. During this vacation time, the employee receives their full salary, as though the compensatory allowance scheme for RHT was not in place.
How should RWT (RHT) be declared and a request for indemnities submitted?
In order to provide simple and rapid support for employers who are encountering difficulties due to the novel coronavirus, the SECO has simplified the administrative steps linked to the notification of reduced working hours in relation to the coronavirus. A guide and the necessary forms are available by clicking on the following
link (in French).
Please note: The Federal Council has abolished the notice and waiting periods.
Some points to verify
- Correctly establish to causal connection between Covid-19 and the impact on the company in the notification
- Make no mistakes in the calculation bases
- It is compulsory to maintain an accounting of all the hours worked by each employee
- Send the request for reimbursement within a period of 3 months maximum, without which no indemnities may be claimed