Kurzarbeit (Short-Time Work)
Kurzarbeit is a temporary reduction in Pensum (usually 10–50%) where the cantonal unemployment office covers a percentage of lost wages, funded by state insurance. It bridges downturns without layoffs. Your canton and industry GAV set eligibility; you must notify RAV/ORP and document the economic reason.
Kurzarbeit (short-time work) is a formal arrangement where you reduce an employee's Pensum temporarily—typically 10 to 50 percent—and the cantonal unemployment insurance (Arbeitslosenversicherung) subsidises part of their lost earnings. The employer continues to pay the reduced salary; the state covers a fixed percentage of the gap.
This tool exists to preserve employment relationships during genuine economic hardship: supply-chain disruption, market collapse, or temporary demand loss. It is not a discretionary cost-cutting measure and requires documented justification to your cantonal RAV or ORP (unemployment office).
When Kurzarbeit applies and your obligations
Kurzarbeit is available during crises meeting your canton's threshold. Most cantons require proof of 'unforeseen events' (pandemic, supplier failure, major client loss) or temporary market downturns. Some cantons apply stricter tests than others; check your RAV or ORP website before filing.
You must notify your cantonal unemployment office in writing before Kurzarbeit begins, provide financial evidence of hardship, and specify the reduction percentage and expected duration. Employees must be notified in writing and usually agree (though in some cantons collective agreements override individual consent). Keep all documentation for at least five years.
- File a Kurzarbeit declaration with your cantonal RAV/ORP before the reduction starts—retroactive claims are usually rejected.
- Provide proof of economic necessity: bank statements, lost contracts, order cancellations, or auditor reports.
- Reduce hours uniformly across affected roles or justify differential cuts in writing.
- Pay the reduced salary on time; the unemployment office reimburses you later (typically 80% of the social-insurance contribution loss).
- Maintain employment contracts; Kurzarbeit is not a substitute for notice periods.
- Update your RAV if circumstances change: if business recovers early, notify immediately.
Eligibility and cantonal rules
Eligibility varies by canton. Zurich, Bern, and Geneva have well-established Kurzarbeit frameworks; smaller cantons may have tighter or looser criteria. Your industry GAV (collective agreement) may set a floor—some sectors (construction, hospitality) have pre-agreed Kurzarbeit terms.
Typically, you must employ at least three staff, have been registered with the unemployment office for at least two years, and prove the hardship is temporary (not structural decline). Sole proprietors and new startups are often excluded. Confirm eligibility with your RAV before investing time in paperwork.
- Check your cantonal RAV or ORP website for current thresholds and forms.
- Review your GAV: some industries have expedited Kurzarbeit procedures.
- Kurzarbeit cannot extend indefinitely; most cantons set a 12-month limit, renewable once.
- You remain responsible for all statutory deductions (Quellensteuer, AHV/ALV contributions) even though hours are cut.
- Employees do not lose statutory rights: holiday, 13. Monatslohn (where applicable), or sickness benefits.
- Kurzarbeit does not suspend probation periods or shorten notice times.
The single biggest mistake
The most common error is filing *after* the reduction has already begun, or even retrospectively weeks later. Many employers assume they can apply retroactively once approval is granted; most cantons reject backdated claims entirely. The day you reduce hours, your RAV clock starts; late filings forfeit reimbursement.
A secondary mistake is treating Kurzarbeit as a substitute for dismissal. If the downturn is permanent or your business model has structurally changed, Kurzarbeit masks the real decision. Employees expect recovery; if you then lay them off after three months, you face credibility damage and potential unfair-dismissal disputes under the Code of Obligations (Obligationenrecht, OR).
- File your Kurzarbeit declaration *before* you reduce a single hour.
- Document the reason in writing—vague references to 'market conditions' will be queried.
- Do not use Kurzarbeit as a staging ground for hidden restructuring.
- If recovery does not materialise, transition to proper redundancy and give statutory notice.
- Keep dated emails and board decisions showing you explored alternatives first.
- Consult your RAV if unsure; a 10-minute call now saves weeks of wrangling later.
Frequently asked questions
- Do employees have to agree to Kurzarbeit?
- Consent rules vary by canton and whether a GAV covers the role. In most cantons, if you file Kurzarbeit correctly and the unemployment office approves it, the reduction is binding. However, some cantons require written consent; check your RAV. A GAV may preset Kurzarbeit terms, overriding individual negotiation.
- How much does the unemployment office reimburse?
- Typically 80% of the social-insurance contribution loss (AHV, ALV, IV, UVG) for the reduced hours—not 80% of wages. The reimbursement is usually paid 4–8 weeks after month-end. You cover the wage gap yourself; the subsidy tops up only the employer's payroll-tax burden.
- Can I keep someone on Kurzarbeit for a year?
- Most cantons set a 12-month initial limit, renewable once (24 months total). After that, you must return to normal Pensum, restructure, or issue notice. Courts review unusually long Kurzarbeit periods skeptically, as they suggest structural, not temporary, decline.
General information for Swiss employers, not legal advice. Have a lawyer confirm anything with legal consequences.