The measures being used to mitigate the social and economic impact of COVID-19


The measures being used to mitigate the social and economic impact of COVID-19

A focus on Switzerland and an overview of European measures

Facing the consequences of the COVID-19 pandemic, which go far beyond the crucial element of public health, many European countries have prepared and implemented immediate measures in order to mitigate the social and economic impact of the outbreak. We put the measures adopted in the economic, social and employment areas under the magnifying glass, highlighting the most important fields of action across Europe.

Switzerland Legal COVID-19 measures

Switzerland Legal COVID-19 measures

Federal measures

On 13 March 2020, the Swiss Government has declared the extraordinary situation under the terms of the Swiss Epidemic Act and has issued an ordinance on the measures to combat the coronavirus (COVID-19 Ordinance 2).

The main measures were as follows:

  • Ban on gathering of more than 5 people in public areas
  • Closures of school, universities and other education and training facilities
  • Closures of publicly accessible establishments/business with certain exceptions.
  • Ban on public and private events

Exempt were in particular food stores, healthcare facilities, pharmacies, public services, sales points for telecommunication, hotels, social work establishments, funerals within the close family.

  • Travel restrictions for cross-border travellers

In addition, the Swiss Government had requested the population to stay at home and keep a minimum distance of 2 m to other people when outside one’s home. There was no general obligation to wear masks.

Since 26 April 2020, these measures have been eased step by step. As of 19 June 2020, two new ordinances have been issued (COVID-19 Ordinance 3 and  COVID-19-Ordinance Particular Situation). To the extent that  Ordinance 3 does not foresee different rules, it is in the Cantons' responsibility to implement the necessary measures to contain a further spreading.

Current Federal measures (Status 9 July 2020):
  • The public is no longer requested to stay home. The decision whether employees are to work from home or at the office is in the employer’s decision. This also applies to particularly vulnerable employees.
  • Publicly accessible establishments/businesses are open with certain restrictions. All establishments must have protection concepts in place. These should include: regular disinfection, minimum distance of 1.5 m or, if distance cannot be kept, appropriate protection measures (e.g. face masks) resp. attendance list if neither distance nor protection measures can be complied with. Furthermore, in discotheques and dance halls a maximum of 300 guests may be present at the same time. This also applies to restaurants, bars and cafes where consumption does  takes place in a standing position.  At other events with more than 300 attendees, sectors with up to 300 attendees must be established for protection purposes
  • Public events with up to 1’000 participants are permitted while participants at demonstrations have to wear a mask as of 20 June 2020. Public events with more than 1’000 people are banned until 31 August 2020.
  • The minimal distance is reduced to 1.5 m (instead of 2 m) while the general protection and hygiene measures still need to be followed.
  • As of 6 July 2020, face masks must be worn on public transport; children beyond the age of 12 are exempt. In situation, where the minimum distance cannot be kept, it is recommended to wear face masks.
  • Mandatory self quarantine for 10 days upon return from risk countries/areas (for further information see section “next steps").
  • Entry restriction for non-Schengen area members at least until 20 July 2020 (for further information see section “next steps").
  • A tracing app is publicly available for voluntary download.

Given the increase in infections, various cantons have now implemented new restrictions. These  include:

  • Limitation of guests to 100 in  restaurant, bars, clubs and discotheques as well as duty to implement sectors for events with more than 100 visitors (AG, BS, BL, SO, TI)
  • Identity checks with official ID at clubs and bars (AG, BE, BL, BS, LU, SH, SO,  ZH, TI)
  • Ban of gatherings of more than 30 people in the public space (TI)
  • Quarantine for certain areas or facilities  (JU, VD)
  • Mandatory face mask in stores (JU)
  • Announcement of demonstrations with more than 30 participants (JU)

COVID-19 loans for SMEs
  • The Swiss Government has introduced government-guaranteed loans from Swiss banks as an interim measure for Swiss small and medium sized companies (“SMEs”) to help them alleviate their liquidity problems due to COVID-19. It expects to provide SMEs with a total of CHF 40bn in financing:
  • SMEs can apply for loans up to 10 % of their annual turnover, up to a maximum of CHF 2 million:

i. Demands of up to CHF 500’000. They will be guaranteed by the Swiss Government and will carry no interest rate.

ii. Demands in excess of CHF 500’000. They will be guaranteed 85 % by the Swiss Government whilst the primary bank provider will bear the risk for the remaining 15%. The annual interest rate is currently 0.5 %. Therefore, standard credit checks have to be imposed on the borrowing entity and the approval process may be slower.

  • To be eligible for COVID-19 loans, SMEs need to meet the following criteria:

i. Established/incorporated prior to 1 March 2020;

ii. No ongoing debt collection or liquidation proceedings;

iii. Significant negative impact on the turnover due to the COVID-19 pandemic;

iv. Not benefiting from federal financial support measures introduced in the areas of culture or sport;

v. The annual turnover must be lower than CHF 500 million.

  • Restrictions apply for the duration of the guarantee, e.g. no payments of dividends and no transfer of funds to parent-companies abroad.
  • The guarantees by the Swiss Government last for 5 business years with a possibility for extension up to 2 years.
  • Guaranteed loans have to be repaid within 5 business years at the latest.
  • The banks may provide the respective companies/individuals additional loans in connection with the respective government backed loans at their own risks.
COVID-19 loans for start-ups with good prospects
  • The Swiss Government has introduced COVID-19 loans for start-ups with good prospects.
  • Start-ups may be eligible if they:

i. suffer from significant financial and liquidity problems due to COVID-19

ii. are domiciled in a participating canton and were founded before 1 March 2020

iii. are constituted as companies limited by shares (AG) or as company with limited liability (GmbH).

iv. are not operating in the agricultural sector

v. are not in a bankruptcy or composition proceeding or in liquidation.

  • Start-ups can apply for loans of up to a 1/3 of their 2019 running costs (maximum CHF 1 million per company).
  • The loans will be guaranteed at 65 % by the Swiss Government and at 35 % by participating cantons (or third-party). As per 27 May 2020, 19 cantons are participating.
  • Respective Applications can be handed in between 7 May 2020 and 31 August 2020.
Financial help for the aviation sector
  • The Swiss Government has decided on 29 April 2020 to support  Swiss and Edelweiss to bridge liquidity shortfalls. It will guarantee 85 % of the funds drawn (up to a maximum of CHF 1,275bn). The loan is secured by Swiss and Edelweiss shares, but the Swiss Government does not envisage a holding in either company.
  • Aviation-related businesses at national airports and national airports may also benefit  from necessary support provided that the stringent conditions can be met.
  • State funds are subject to the following conditions:

i. Sufficient collateral must be available. Companies and their owners have to implement all reasonable measures to mitigated liquidity shortfalls before being eligible to  state funds are of secondary nature.

ii. Guaranteed funds must be solely used for the Swiss infrastructure, i.e. no funds must be transferred to parent companies abroad.

iii. Funds generated in the future must be primarily used to repay the received loan, i.e. no dividend or intra-group repayments.

  • The Swiss Government has asked Parliament for guarantee credits of CHF 1,875bn in total. 
Financial help for specific sectors
  • Businesses in the culture, sports and tourism sector may access loans, subventions and compensation for loss of income. The financial support for the culture sector has been extended until 20 September 2020.
  • Public transport and rail freight companies should also benefit from financial support. The Federal Council aims to provide CHF 800 million for various measures, which shall ensure that these companies remain solvent and can continue providing their full services. Furthermore, the Federal Railway Company will be supported with additional credits of CHF 550 million to bridge liquidity shortfalls.
Deferral of social security contributions 
  • Since 19 March 2020, Swiss companies and self-employed persons whose turnover has declined due to COVID-19 are able to defer the payment of social insurance contributions (AHV, IV, EO, IV, UI) for 6 months and without interest.
  • They will also be able to adjust the usual amount of the advance payments made in respect of these insurances in the event of a significant fall in the wage bill.
  • Until the end of June 2020, the social security authorities has stopped sending reminders for unpaid contributions and waived interests on late payments.
Contributions to pension schemes
  • Since 26 March 2020, employers may temporarily use the employer contribution reserves to pay employee contributions to pensions schemes for a period of 6 months to allow them to deal with liquidity issues.
  • This measure has no effect on employees. Their employee contribution part are deducted from the salary as in normal circumstances and all contributions are credited to employees by the pension fund.
Tax payments
  • The Swiss Federal Tax administration has waived the late payment interest for direct and other taxes due between 1 March 2020 and 31 December 2020.
  • A majority of cantonal tax administrations have extended payment deadlines or have waived late payment interests for cantonal and communal taxes.
  • Tax laws at federal level and cantonal level, allow taxpayers in case of hardship to request a deferral of payments due without any late interest on open tax payments (e.g. following a final assessment).
Deferral of bankruptcy and temporary deferral in probate proceedings 
  • The Swiss Government has introduced two temporary measures aimed at protecting companies from the threat of bankruptcy as consequence due to liquidity shortfalls:

i. a temporary deferral in probate proceedings, the so-called COVID 19 deferral, for small and medium-sized enterprises that have run into financial difficulties solely as a result of COVID-19.

ii. a temporary exemption from reporting over-indebtedness for any company, which was financially healthy at the end of 2019 and where there is a chance that over-indebtedness can be remedied after the current crisis.

Short-time work compensation for COVID-19
  • Employers who suffer loss of work amounting to at least 10 % of the hours usually worked can apply for short-time work compensation if

i. the work of loss is due to economic reasons or official measures with an adequate causal link to COVID-19; and

ii. is likely to be of temporary nature and it can be expected that short-time work will maintain jobs.

  • Short-time work requires the consent of each employee.
  • The compensation paid by the unemployment fund is at 80 % of the loss of earnings attributable to the loss of work hours.
  • The maximal insured annual salary is CHF 148’200.
  • Social security contributions on employer’s side are still due on the full salary, but will be reimbursed at 6,225% of the compensation. Social security contributions on the employee’s side are also due on the full salary, unless there is a different agreement  between employer and employee.
  • Short-time work compensation is possible for up to 12 months  (as of 1 September 2020: 18 months)  within a 2 years' period.
  • Covered are all employees in a unterminated employment, who have not yet reached the retirement age, incl. employees with a fixed-term contract, on-call workers, apprentices (only until 31 May 2020) and temporary workers.
  • As of 1 June 2020, persons in an employer-like position (e.g. CEO of a limited company) and their spouses can no longer benefit from short-time work compensation.
  • The Swiss Government has extended the circle of covered persons to Employees in an employer-like position (e.g. CEO of a limited company)  and their spouses. In these cases, the compensation is a lump-sum of CHF 3’320 for a full-time employment.
  • The Swiss Government has also ruled that no waiting period or grace period apply and that overtime does not need to be compensated before short-time work compensation is applied for. As of 1 June 2020, a waiting period of 10 days is re-established. This only applies to new pre-notification, but not valid pre-notifications. As of 1 September 2020, a grace period  of 1 day as well as  the need for  compensation of overtime prior to short-time work will be re-implemented.
  • The application process has two stages: It requires an initial pre-notification to the competent cantonal authority (valid for 6 months) followed by monthly applications for reimbursements with the unemployment fund.
  • The Swiss Government has decided on 20 May 2020 on a staggered exit of the short-time work compensation for COVID-19.
Special protections for employees at high risk (“particularly vulnerable employees”)
  • Employees at high risk are entitled to home office. Where they cannot perform their role from home, the employer has to provide them with equivalent work performable from home. In either case, the employer has to take all appropriate measures to ensure remote work.
  • If operational reasons require the full or partly presence of employees at high risk at the employer’s premises, the employer has to meet the following requirements:

–    All contact to other persons must be omitted, either by a separate office in a single room or separated work place with at least 2 metres distance.

–    Where close contact to other persons cannot be avoided, all appropriate protection measures need to be put in place (in particular personal protection gear as other technical/organisational measures).

  • Where neither remote work from home (regular or equivalent role) nor regular role with the above listed safety precautions are possible, the employer has to provide an equivalent role at its premises in which he can ensure the above safeguards. Before taking the prescribed measures, the employer must consult with the employees in question.
  • In case none of these options are feasible or where the concerned employee does not agree with the measures, the employer is required to put the employee on paid leave.
  • According to the legal definition, a particularly vulnerable person is in general any person, who is beyond the age of 65 or who has a pre-existing medical condition, i.e. high blood pressure, diabetes, cardiovascular diseases, chronic respiratory diseases, cancer or other diseases or therapies, which weaken the immune system. The Federal Office for Public Health (“FOPH”) has now published a list specifying the categories of particularly vulnerable employees.
  • These protective measures remain applicable regardless of the adopted relaxations.
Protection concepts
  • Businesses that are allowed to run or take up their operations are required to have protection concepts in place for the protection of clients, visitors and any person working at their premises. The requirements for these concepts have been relaxed and are no longer defined on trade-/sector basis. Special rules however apply for the event sector as well as for bars, clubs and discotheques.
Compensation for loss of income of employees
  • The loss of earning insurance covers the loss of income for employees,

iii. who cannot come to work because they have to take care of their children (beyond the age of 12); or

iv. who have been put under medical quarantine.

  • The compensation is 80 % of the lost salary up to a maximum daily allowance of CHF 196.
  • The compensation will be paid for a maximum of  10 days in case of a quarantine. In case of childcare, the entitlement cedes either when alternative childcare is guaranteed again or with the end of the measures due to COVID-19.
Compensation for loss of income of self-employed persons
  • Self-employed persons, who suffer directly or indirectly a loss of income due to official measures (school closures, business closure, medical quarantine) can apply for loss income compensation unless they are compensated by a separate insurance scheme. In case of self-employed persons that are affected indirectly, their annual salary must be within the range of CHF 10’000 to CHF 90’000.
  • The compensation is 80 % of the lost income up to a maximum daily allowance of CHF 196 and for a maximum of 30 days (if due to childcare). In any other case, their entitlement ceases at 16 September 2020. The Federal Council has extended the entitlement period as many self-employed persons still suffer from loss of  income.
  • Owners of a limited company or of a company with limited liabilities in the event sector, who are employed in their own company, will be entitled to loss of compensation at equal terms as for self-employed employed persons, who are indirectly affected by official measures.

Additional criminal measures

Art. 83 of the Swiss Epidemic Act (EpA) and COVID-19 Ordinance Particular Situation foresee criminal measures in addition to the Swiss Criminal Code.

According to Art. 83 EpA, a fine of up to CHF 10'000  may be opposed among others on anyone who:

  • evades an ordered quarantine or isolation or medical supervision
  • withdraws from an ordered medical examination
  • opposes measures against the population
  • violates the regulation on entry or exit,

In case of negligence, the maximum fine is CHF 5'000.

Art. 13 of COVID-19 Ordinance Particular Situation also foresees fines for

  • the organiser/operator, who does deliberately not comply with the rules on protection concepts and/or the special social measures on public or private events.
  • the person, who organises or performs an event with more than 1'000 visitors or participants.

Entry Restrictions
  • Entry restrictions still exist for all third-country nationals traveling to Switzerland from a risk country (all non-Schengen member states) for stays beyond 90 days, in particular tourists, short-time visitors, business travellers.
  • Since 15 June 2020, the borders between Switzerland and Schengen Member states are open. As a consequence, the normal entry requirements apply for the following travellers:

i. citizens of a Schengen member state;

ii. persons benefitting from the free movement of persons

iii. third country nationals exempt from the duty to hold a visa, which are residing in a Schengen member state;

iv. third country national not exempt from the duty to hold a visa, who are in possession of a valid Schengen visa or valid residence permit of a Schengen member state.

  • On 20 July 2020, the entry restrictions for the following countries will be revoked: Algeria, Australia, Bulgaria, Canada, Croatia, Cyprus, Georgia, Ireland, Japan, Morocco, Montenegro, New Zealand, Romania, Ruanda, South Korea, Thailand, Tunisia and Uruguay. This means that citizens of these countries can again enter Switzerland.
Self Quarantine
  • Persons, who have been staying in a risk country/area 14 days prior to their travels to Switzerland, must self-quarantine for 10 days and register within 2 days upon entry with the competent cantonal  authorities.
  • Exceptions may apply, e.g. for transit passengers, health service workers or persons, who transport business/goods professionally by road, railway, ship or plan.
  • A risk country/area is defined as a country/area in with there is heightened risk for infection. The list of risk countries/areas is updated on a regular basis. It currently includes among others Belarus, Brazil, Iraq, Israel, Russia, Saudi Arabia, Sweden, South Africa and the United States of America.
  • Non-compliance will be sanctioned with fines up to CHF 10’000.

All applications are again being processed (subject to the legal requirements:

  • for residence or cross-border permits of EU/EFTA nationals (local hires) and notification procedure  for local hires;
  • for work and residence permits for EU/EFTA nationals (assignees) as well as notifications procedures for cross-border services;
  • for the employment or assignment of non-EU/EFTA nationals;
  • for residence permits of EU/EFTA and third-country national who are not employed, e.g. pensioner;
  • for family reunions with persons with a Swiss residence permit;
  • for foreign school pupils/students for studies with a duration of more than 90 days.

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