Loss of earnings insurance
Loss of earnings insurance
The purpose of loss of earnings insurance is to provide employees with an income when they find themselves in specific situations where they are unable to work. Initially designed to ensure that employees receive part of their salary during compulsory military service, this insurance has been extended over time.
Since 2005, Swiss women employees have been entitled to maternity leave. They are covered by loss of earnings insurance and receive benefits during their maternity leave. In principle, only women who are gainfully employed at the time of childbirth are entitled to loss of earnings benefits. Under certain conditions, women who are unemployed, have had an accident or are off sick are also entitled to this benefit.
These young mothers receive loss-of-earnings benefits for a certain number of weeks after giving birth. This period is longer in some cantons. The right to benefit arises if the child is born alive. If the baby is stillborn, the employee is entitled to it if the pregnancy lasted a certain number of weeks.
However, these loss of earnings allowances only cover a part of their salary. In addition, there is a ceiling on the amount of this benefit. Female managers who receive a higher salary will not be fully covered as the amount of EOA is capped by law. It is controversial whether the employer should make up this shortfall.
During the Covid-19 pandemic, the authorities took drastic measures to try to stop the spread of the disease. Employees who had to keep their children because of school closures, employees who were quarantined or too vulnerable to be exposed to the disease... There were many reasons why employees did not come to work.
During the Coronavirus pandemic, the authorities decided to set up a loss of earnings insurance system for some of these situations. The duration of the payment of these benefits is limited.
Many fathers want to take intensive care of their babies and wives immediately after giving birth. Paternity leave was adopted in 2020 by the Swiss people. From 1 January 2021, employees will be given days of leave that they can freely determine during a certain period after the birth of their child. They will receive benefits from the loss of earnings insurance, which will cover part of their salary during these days of leave.
Illness/accident of a minor child
Sometimes a child suffers a serious illness or a very serious accident. In such cases, the parents must be able to provide intensive care. From 1 July 2021, the loss of earnings insurance will cover such cases and, under certain conditions, will pay loss of earnings allowances that can be shared between both parents.
Swiss companies have many expatriates working in subsidiaries abroad. These are sometimes countries where social security is not optimal. Under certain conditions, employers and employees can decide to continue paying contributions for loss of earnings insurance in Switzerland.