"US tariffs' fallout relief": Exploring Switzerland's strategy for softening the blow
In response to the steep customs duties imposed by the Trump administration on Swiss imports, the Federal Council has proposed an extension of short-time work benefits for businesses most affected.
Short-time work, a temporary reduction or complete suspension of work at a company, allows the contractual employment relationship to remain in place. When a company faces financial difficulties due to factors beyond its control, it can apply for short-time working compensation at the responsible cantonal employment office.
During the Covid pandemic, short-time work benefits were crucial for many companies that had to temporarily cease working. Unlike unemployment benefits, the KAE/RHT/ILR is not paid directly to the affected employee. Instead, it is the company's responsibility to submit an application and provide documentation to justify its request.
The KAE/RHT/ILR is designed to help companies facing economic downturns or temporary cessation of work. The system is intended for companies facing temporary financial difficulties out of their control and unable to pay their employees' wages, either wholly or partially.
The aim of short-time work benefits is to prevent redundancies resulting from unusual events, such as economic downturns or temporary cessation of work due to factors beyond the company's control. The KAE/RHT/ILR is paid to the employer, who must continue to pay the workers their full salaries. The amount covered by KAE/RHT/ILR is 80 percent of the loss of earnings attributable to the reduction in working hours.
KAE stands for Kurzarbeitergeld, RHT for Rehabilitations- und Hilfsmittel-Tagegeld, and ILR for Individuelle Leistungserbringung. Employees profit from this financial support in cases of work interruption, rehabilitation measures, and individual adjustments in the work process.
The KAE/RHT/ILR is self-funded through contributions from both companies and employees. The previous ordinance regarding short-time work benefits expired on July 31st, 2025, and the Federal Council is seeking an extension due to the 39-percent customs duties imposed by the Trump administration on Swiss imports.
The Federal Council highlights that short-time work benefits are designed to address situations where companies are unable to pay their employees' wages due to factors beyond their control. Short-time work is a proven instrument for mitigating the consequences of economic downturns and protecting threatened jobs.
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