According to article 324 a of the Swiss Code of Obligations (CO) if an employee is unable to work for personal or physical reasons beyond his or her control, such as sickness, accident, childbirth, fulfilment of a legal obligation or a public duty, the employer must pay wages for a limited period including a fair indemnity for the salary in kind that has been lost. This is applicable if the employment relationship has lasted for more than three months or if there is a contract of more than three month’s duration.
Scale used by the tribunals in Berne (reference scale)
- from 0 to 1 year of employment: 3 weeks (for which wages are to be paid if works reports lasted more than three months or were concluded for more than three months)
- as of the 1st year of employment : 1 month
- from the 2nd to the 4th year of employment : 2 months
- from the 5th to the 9th year of employment: 3 months
- from the 10th to the 14th year of employment : 4 months
- from the 15th to the 19th year of employment: 5 months
- from the 20th to the 24th year of employment: 6 months
- from the 25th to the 29th year of employment: 7 months
- from the 30th to the 34th year of employment: 8 months
- from the 35th to the 39th year of employment : 9 months
- from the 40th to the 45th year of employment: 10 months
Insurance for loss of earnings
The employer may voluntarily take out health insurance to cover the personnel for loss of earnings (optional insurance to compensate the loss of daily earnings). Employees may also take out their own insurance policies.
This type of insurance is not mandatory in Switzerland. The federal Law on health insurance of 18 March 1994 (LAMal) states that anyone domiciled or gainfully employed in Switzerland, who is 15 years of age and not yet 65, may take out a health insurance policy to cover loss of earnings.
The employer can insure the wages of his employees in case of disability to work as a result of sickness, accident or childbirth. If an employee is unable to work, the health insurance covering the loss of earnings pays a daily indemnity for 720 days.
Daily indemnities usually correspond to the amount of cash wages that have been insured (salary in kind is usually not covered). In principle it is possible to cover 100%, 80%, or a percentage less than the cash wages. The provisions of the insurance contract provide for the payment of daily indemnities beginning with the first day of disability, or after a certain lapse of time (one month for example). Each insurer can determine the conditions that are applicable.
Optional coverage: It can be with a healthcare plan (coverage supplementary to health insurance) or with an insurance company.
Premiums: Since the insurance is not obligatory, there are no rules concerning the payment of premiums. Generally speaking premiums, which are usually between 1.5% and 2.5% of cash wages, are split between employer and employee on a 50-50 basis. Premiums vary with the coverage desired (for sickness, accident or childbirth, the amount of wages insured, the time lapse, etc.) and in accordance with the conditions imposed by each insurer.