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Employment impacts Companies seek to cushion the economic blow of coronavirus

factory

Some companies have had to cut back on working hours because of supply chain disruptions for goods coming from China.

(Keystone / Alex Plavevski)

As some Swiss businesses are forced to cut back on working hours due to the coronavirus, more are requesting financial support from authorities to keep paying employees.

Most of the companies that have filed applications with local authorities are in the tourism, retail and gastro industries; however, those with manufacturing operations in China have also filed requests according to a survey by the Keystone-SDA news agency.

In Switzerland, employers can reduce employee working hours if a business temporarily has too little or no work. Under the scheme the employer can receive financial support from cantonal authorities in order to continue to pay workers. Employees receive partial employment benefits for working reduced hours that amounts to 80% of lost earnings.

Some cantons have created special coronavirus websitesexternal link to help facilitate requests and answer common questions. It also specifies what documentation companies need to provide to prove that they were affected by the coronavirus.

In addition to production slumps, official measures taken by the government is also a reason to request compensation. After the government’s announced a ban on gatherings of more than 1,000 people last Friday, cantons expect more requests to come in.

Thus far, companies that have requested support largely come from the tourist industry as well as retail, especially in Lucerne and Bern, which are popular destinations for Chinese tourist groups.

Supply chain disruptions

Some cantons have also received requests from companies suffering from manufacturing and logistical disruptions. Four companies have applied to the canton Aargau authorities for support due to supply bottlenecks for goods from China, Korea or Italy.

According to a report from the Swiss public television, only five companies applied for reduced-work compensation in February from the Zurich region, but this is expected to rise as the office has received many requests for information about the requirements to reduce hours.

On Saturday, the Swiss government announced that it will lower its economic growth forecast because of the coronavirus outbreak. The last forecast published in December predicted gross domestic product growth of 1.7% this year. The revised forecast is expected on March 17.

Keystone-SDA/jdp

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