Sickness and continued salary payment: the rules

When an employee falls ill, who pays the salary? In Switzerland the answer is not “the insurer”, but the employer, at least for a certain period. The Code of Obligations (CO) in fact requires the continued payment of salary in the event of an impediment through no fault of the employee. Let’s look at how this works and why almost every company takes out insurance.

The principle of article 324a CO

If the employee is prevented from working through no fault of their own for reasons connected with their person, the employer must continue to pay their salary for a limited time. This protection covers:

illness and accident;
pregnancy;
the fulfilment of legal obligations (military service, civil protection);
other non-culpable personal impediments.

The protection presupposes an employment relationship that has lasted more than three months or that was concluded for a period longer than three months. In the very first months, therefore, the obligation may not apply.

For how long

In the first year of service the salary must be continued for at least three weeks. After the first year the duration increases according to seniority, on an “equitably” longer basis.

Since the law does not set a detailed table, case law has developed three cantonal reference scales — those of Bern, Basel and Zurich — which indicate how many weeks or months of salary are due depending on years of service. The three scales lead to similar but not identical results; the one in use at the place of work applies. In all cases the starting point is the three weeks of the first year, rising progressively from there.

What “continued salary payment” means

As a rule the obligation covers 100% of the salary for the period due, not 80%. This is a point that surprises many employers: the reduced percentage only comes into play when an insurance policy is involved, as we will see.

The entitlement is calculated per year of service: once the entitlement of weeks due in a year is exhausted, the employer is no longer required to pay, even if the year is not over. With the new year the entitlement is renewed.

Why almost everyone takes out insurance

Continuing to pay a salary in full during long absences is costly and unpredictable. For this reason the vast majority of companies take out daily sickness allowance insurance (collective daily allowance).

This solution is permitted as a substitute for the legal obligation, provided it offers benefits that are at least equivalent. Typical policies provide for:

coverage of 80% of the salary (sometimes more);
benefits lasting up to 720 days within a reference period;
a waiting period (for example 30, 60 or 90 days) during which the employer pays;
a share of the premium often split with the employee, if agreed.

If the insurance coverage is equivalent to the statutory obligation, the employer is discharged by paying the 80% provided by the policy instead of the statutory 100%.

Illness and accident are not the same thing

Be careful not to confuse the two regimes. Occupational and non-occupational accidents are covered by the compulsory UVG/LAA insurance (accident insurance), which pays an allowance equal to 80% of earnings from the third day. The continued salary payment under art. 324a mainly concerns illness, where daily allowance insurance is not compulsory by law (except where collective agreements require it).

What to put in the contract

To avoid disputes it is advisable to regulate:

the existence and conditions of the daily allowance insurance;
the allocation of the premium between employer and employee;
the waiting period and who pays during that period;
the employee’s duty to report the absence promptly and produce a medical certificate.

How we help you

The People division of SIH ONE sets up continued-salary clauses compliant with the CO, coordinates daily allowance insurance with payroll and manages the calculations in the event of absence. Let’s put your sickness rules in order.