When the Swiss Federal Council declared an ‘exceptional situation’ on 16 March 2020 due to COVID-19, many companies that hadn't already done so instructed their employees to work from home – provided home office work was possible. In this blog, we examine the situation with respect to social security liability during periods of home office work.
Just over one year ago, the Swiss Federal Council declared an ‘exceptional situation’ due to COVID-19 and tightened the measures aimed at protecting Switzerland’s population. The Council appealed to the population to avoid any unnecessary social contact and to stay at home whenever possible. Amongst other measures that have already been eased, home office isn’t mandatory anymore but currently still recommended.
For employees residing outside of Switzerland, this raises the question of social security liability during the time they work(ed) from home. The general rule is that these employees are permitted to perform less than 25% of their physical employment activities in their country of residence; otherwise, they become subject to compulsory social security in their country of residence. This is based on agreements between Switzerland and the EU (Art. 13 of Regulation (EC) No. 883/2004). This regulation applies to Switzerland, the EU and its nationalities, and the EFTA countries. Public servants and other special cases/situations, e.g. multiple employers, receive special treatment. Here, employers have to conform with additional detailed requirements.
Agreement on the Free Movement of Persons, EU/EFTA Convention or bilateral social security agreement
Persons who fall within the scope of the Agreement on the Free Movement of Persons, the EU/EFTA Convention or a bilateral social security agreement and have worked in Switzerland prior to being placed on home office work are subject to the ‘flexible application of social security liability rules’. The duration of these agreements with the various individual countries differ, however: While those with Germany, Italy, the Principality of Liechtenstein and Austria were extended until 31 December 2021, the agreement with France is still set to expire on 30 September 2021. The flexible application rules for the other countries also expire on 31 December 2021. Based on these agreements, employees who are instructed to work from the home will not be considered as being employed in multiple countries. In other words, cross-border commuters who have been instructed to work from home will remain subject to the Swiss social security system (e.g. 100% of employment was in Switzerland before Covid). They are not required to have a secondment certificate (A1). The insurance situation also remains essentially unchanged for cross-border commuters who were ordinarily/frequently performing their work in multiple countries and thus subject to fluctuations prior to the coronavirus crisis. The pre-Covid rules for social security liability will come back into force as soon as the epidemiological situation has normalised.
No social security agreement
In normal times, persons who reside in a country that does not have a social security agreement with Switzerland and are employed in Switzerland are subject to the Swiss social security system. This is also the case if, as a result of the coronavirus pandemic, they perform their work temporarily in their country of residence.
Swiss law also covers employees who have started a new job in Switzerland while the home office rules applied. Social insurance liability applies to all branches of the social insurance system, with the exception of health insurance, which is tied to physical presence in Switzerland. More information can be found in the leaflet Corona virus: effects on health insurance in matters with an international context published by the Federal Office of Public Health (FOPH).
Health insurance: insurance liability and option right
Those from certain neighbouring countries have the option to keep their existing insurance in their home country for themselves and their non-working family members. This option must be exercised within three months from the employment contract start date and is only available to cross-border commuters who are subject to social security law. These commuters return to their residence outside of Switzerland at least once a week. The Common Institution under the Federal Health Insurance Act can be contacted for more detailed information.
The FOPH has specified that employees without an option right are categorically excluded from postponing the start date of compulsory insurance in Switzerland.
First day at work in Switzerland is the authoritative criterion for persons from third countries
Different rules apply to persons from third countries. For them, insurance cover is only available after they have physically started their work in Switzerland. Here are two typical scenarios:
- Scenario 1
An employee from Germany should have started his new job in Zurich on 4 May 2021 (contract start date: 1 May 2021), but was prevented from entering Switzerland due to the COVID-19 restrictions. Instead, he spent his first day at work in his home office in Germany. He is required to take out insurance with a Swiss health fund within three months from 1 May 2021. He also has three months’ time to exercise the option of keeping his existing German health insurance cover. - Scenario 2
An employee from Malaysia should have started his new job in Zurich on 4 May 2021 (contract start date: 1 May 2021), but was prevented from entering Switzerland due to the COVID-19 restrictions. Instead, he spent his first day at work in his home office in Malaysia. He will be permitted to enter Switzerland on 20 August 2021 and then take up his position in Zurich. As a result, he will be required to take out insurance with a Swiss health fund starting on 20 August 2021.
