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 goal is to halt redundancies due to decreased activity.
The RWH engenders the right to compensation over a certain time span which is covered by unemployment insurance (AC). The maximum duration of compensation is currently set at 18 months (limited in time to 31.12.2021).
Therefore, 80% of the payroll costs are taken into consideration for employees whose normal working hours are reduced.
What conditions must the employer fulfil?
In principle, two conditions must be met in order to claim compensation for lost time:
- The compensation in case of RHT supports the loss of work due to measures of the authorities or other circumstances beyond the control of the employer. This principle applies provided that the employer cannot avoid the loss of work by appropriate and economically bearable measures or make a third party liable for the damage.
- The compensation in the case of RHT allows for unavoidable losses of work due to economic reasons. These include both cyclical and structural causes that lead to a decline in demand or turnover.
In both cases, the following conditions must be met in particular for an employee to be entitled to compensation in the event of an RWH:
- The employment relationship must not have been terminated
- The loss of work is likely to be temporary and the compensation for reduced working hours can be expected to maintain the jobs
- The work schedule is controllable
- The loss of work constitutes at least 10% of the total hours normally worked by the workers during the period for which the count is made
- The loss of work is not attributable to circumstances that fall within the normal risk of operation
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.
On January 20, 2021, the Federal Council again extended the right to compensation in the event of RWH to persons in fixed-term employment and to apprentices. This extension applies from January 1, 2021 to June 30, 2021.
As of January 18, 2021, persons considered vulnerable are once again entitled to RWH benefits due to measures ordered by the authorities, provided that the company meets the overall requirements for RWH benefits. This right is currently limited to March 31, 2021.
On October 28, 2020, the Federal Council amended the ordinance COVID-19 unemployment insurance. With this amendment, the right to compensation for reduced working hours is granted to on-call workers under certain conditions. The amendment comes into effect retroactively on September 1, 2020 and remains valid until June 30, 2021.
The evolution of the beneficiaries can be found in the table below (in French).
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”
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).
On February 19, 2021, the Federal Council decided to extend the simplified procedure for compensation for reduced working hours and the abolition of the waiting period until June 30, 2021. The corresponding amendments to the COVID-19 Unemployment Insurance Ordinance will come into force on April 1, 2021.
The notice period is temporarily suspended. A notice must still be submitted by the 1st day of the RHT. The duration of new permits is set at a maximum of six months. Retroactive removal of the notice period for the period from September 1, 2020 to March 20, 2021 is not automatic and requires a written request to the relevant authorities by April 30, 2021.
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