Since the existing Liechtenstein regulations did not provide the possibility of granting short-time-working in case of a pandemic, the Government of the Principality of Liechtenstein has now issued an executive order on March 17th 2020 concerning the governmental payment of short-time working, to compensate for the economic consequences of COVID-19. The executive order comes into force with its announcement and is provisionally valid until June 30th 2020. It allows companies that suffer loss of workload as a result of COVID-19 and its effects to claim short-time compensation for their employees.
How is "Short-Time-Work" defined?
Short-time-work means that workload in a company is temporarily reduced or completely stopped in agreement between employer and employee. However, the contractual relationship under labor law remains in place. The aim is thus to prevent unemployment and to preserve jobs.
Legal Requirements
In connection with COVID-19, compensation may be paid for the loss of working hours caused by economic reasons and which are unavoidable, i.e. if the employer cannot avoid the loss of working hours by taking appropriate measures or cannot hold a third party liable for the damage, in particular epidemic insurances.
The employer must provide a credible explanation as to why the absence from work to be expected in his company is due to the occurrence of the COVID-19 pandemic disease. The loss of working hours must be specified individually by department and affected employees. From the beginning of short-time-work, it is important to carry out an operational working time inspection, which means that a monthly report must be kept for each employee for whom short-time work compensation has been applied for, showing the loss of working hours in detail.
Simplified Application
According to the new regulation, an application for short-time-work must be submitted to the Office of Economic Affairs (Amt für Volkswirtschaft), Unemployment Insurance Division, at minimum only one working day before the start of the economically induced short-time-work, instead of one week according to the previous legal provision. There is no entitlement to compensation for short-time work if the employee does not agree with short-time working or if the employee is in a fixed-term or temporary employment relationship. Trainees are also excluded from the regulation.
In general, all employees liable to contribute to unemployment insurance are entitled to short-time-work compensation. Exceptions are employees whose working hours cannot be determined or controlled, the employer's assisting spouse, employees whose employment relationship has been terminated, shareholders, as well as members of a supreme body and their assisting spouses.
Unemployment insurance pays 60 percent of the creditable loss of earnings and the employer 20 percent. The short-time-work compensation is a payment to be made to the employer retrospectively. The employer is obliged to pay the contractually agreed salary of at least 80 percent on the regular payment date and to advance it in full. The basis for the short-time-working compensation is the agreed salary for the last payment period before the start of short-time-working (maximum limit here: CHF 10'500 monthly or CHF 477 per day). The employer must also pay the full statutory and contractual social security contributions in accordance with normal working hours. Within one month of the end of the previous payroll period and after submission of the payroll, the employer will receive the short-time work compensation.
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