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COVID-19 and Reduced Hours Allowance

Due to the coronavirus pandemic, the Federal Council adopted an ordinance on unemployment insurance (OCOVID-19-ACI) on March 20, 2020. This ordinance impacts short-time work compensation (RHT).


Nature and Conditions of RHT


Short-time work compensation (RHT) compensates for a temporary reduction in working hours ordered by the employer in agreement with the affected employees. The general conditions for entitlement to RHT are defined in Article 31 al. I LACI. It should be emphasized that not all companies are necessarily entitled to this benefit; the temporary reduction in working hours must be temporary and of an economic nature (LACI 32 I). "Economic" can include COVID-19, but it must have an insurmountable impact on the company: thus, companies that can operate remotely cannot claim RHT, while those subject to Articles 5 to 9 of Ordinance 2 COVID-19 may be entitled to it. For example, educational institutions, stores, or restaurants might be eligible for RHT.


It is also worth noting that RHT aims to prevent layoffs—an insolvent company would generally not be entitled to it—and it must be requested by the employer (LACI 38 I).


Procedure and Exercise of Rights


In the canton of Vaud, the RHT application must be submitted by email to the Employment Service, Unemployment Legal Office, using the simplified RHT notice as indicated by the administration. Subsequently, a monthly form titled "Application and Calculation of Compensation for Reduced Working Hours" must be submitted via email to the competent unemployment fund, attaching all proof of the company's monthly payroll, such as the payroll journal.


Additionally, the OCOVID-19-ACI has modified RHT: broadly speaking, the system has become more generous, for example:

  • No waiting period is deducted from the consideration of work loss, and the employer is not required to observe a notice period (OCOVID-19-ACI 3, 8b I);

  • The duration of RHT, without renewal, is extended to 6 months (OCOVID-19-ACI 8c);

  • Individuals with fixed-term contracts, apprentices, temporary workers (OCOVID-19-ACI 4), and persons whose positions are equivalent to those of an employer, including their spouses working with them, are also entitled to RHT (OCOVID-19-ACI 1, 2).


Two clarifications: First, self-employed individuals are not entitled to RHT but only to income loss compensation, which must be requested from the AHV compensation fund using official forms. Second, given the current situation, the Employment Service may have difficulty responding quickly to requests; however, its response will be faster if the quality of the information provided is high. In this regard, Valentin Legal Consultation can assist you with these procedures.


If you wish to obtain more information on this matter, Valentin Legal Consultation would be pleased to welcome you to our offices at Rue du Valentin 1, 1004 Lausanne, to answer any questions you may have. We have also set up a video conferencing system to accommodate the current situation, available on our website: https://www.consultationjuridiqueduvalentin.ch/. We can also be reached by phone at 021 351 30 00 and by email at info@cjdv.ch.


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