Unemployment Insurance in Switzerland (AVIG/LACI)
The Federal Act on Compulsory Unemployment Insurance and Insolvency Compensation (AVIG/LACI) of 25 June 1982 protects Swiss workers against the economic risk of unemployment. Mandatory for all employees, unemployment insurance provides a temporary safety net during the search for new employment. Disputes regularly arise regarding conditions of entitlement, suspensions of rights and labour market measures. PBM Avocats assists insured persons in Geneva and Lausanne.
Conditions for Entitlement to Unemployment Benefits
To be entitled to unemployment benefits, the following cumulative conditions must be met (art. 8 AVIG/LACI):
- Loss of work: total or partial loss of employment resulting in a loss of earnings
- Contribution period: at least 12 months of contributions in the 2-year framework period
- Fitness for placement: being available and able to work (not totally incapacitated)
- Domicile in Switzerland: or equivalent situation
- Non-culpability: not being responsible for one's own unemployment (no resignation without good cause)
Maximum Benefit Duration
| Situation | Max. benefit duration | Conditions |
|---|---|---|
| Standard (under 55 years) | 400 daily allowances | 12-24 months of contributions |
| Long contribution period | 520 daily allowances | 22-24 months of contributions |
| 55 years and over, or disabled ≥ 40% | 520 daily allowances | 18-24 months of contributions |
| Short contribution period | 200 daily allowances | 12-17 months of contributions |
Calculation of Insured Earnings and Daily Allowances
The insured earnings are calculated on the basis of the average monthly salary of the last 6 or 12 months of contribution-paying activity, depending on the situation (art. 23 AVIG/LACI). The maximum salary taken into account is CHF 12,350 per month (maximum annual earnings: CHF 148,200). The daily allowance represents:
- 80% of insured earnings: for insured persons with dependent children or whose earnings are below CHF 3,797/month
- 70% of insured earnings: for other insured persons
Unemployment benefits are subject to income tax and social security contributions (AHV/AVS, IV/AI, EO/APG).
Suspensions of Entitlement to Benefits
The unemployment fund may suspend entitlement to benefits in case of culpable conduct by the insured person. The main grounds and durations:
- Resignation without good cause or job abandonment: 31 to 60 days suspension
- Dismissal for serious fault: 16 to 35 days suspension
- Insufficient job searches: 1 to 35 days suspension
- Refusal of a suitable job offer: 16 to 35 days suspension
- Refusal to participate in an LMM: 31 to 60 days suspension
Labour Market Measures (LMM)
LMMs (art. 59 et seq. AVIG/LACI) aim to improve the employability of unemployed persons. They include:
- Training and professional retraining courses
- Development or skills assessment internships
- Temporary employment programmes
- Employment cooperation and travel cost contributions
Refusal to participate in an LMM considered appropriate may lead to a suspension of benefits. It is possible to challenge the obligation to participate if the LMM is not appropriate to the insured person's personal or professional situation.
Short-Time Work Compensation (RHT/KAE)
Short-time work compensation (RHT/KAE) allows an employer going through a difficult period to reduce employees' working hours without dismissing them. Unemployment insurance compensates for the loss of earnings resulting from the reduction in working hours at 80%. The conditions are strict and the employer must file an application with the cantonal authority.
How many contribution days are required under AVIG/LACI to be entitled to unemployment benefits?
To be entitled to ordinary unemployment benefits, one must have contributed to unemployment insurance for at least 12 months during the last 2 years (contribution framework period). Exceptions exist in particular for persons completing studies, an apprenticeship or on maternity/paternity leave.
What is the amount of unemployment benefits in Switzerland?
Unemployment benefits represent 70% of the insured earnings (or 80% for insured persons with a child maintenance obligation or whose insured earnings are below CHF 3,797 per month). The insured earnings are based on the average salary of the last 6 or 12 months, capped at CHF 12,350 per month. The maximum duration is 520 daily allowances.
What are the obligations of the insured unemployed person?
The insured person must: register with the RAV (regional employment office) as soon as possible; be fit for placement (available and able to work full or part time); conduct sufficient job searches (generally 8-10 per month); participate in labour market measures (LMM) proposed by the RAV; attend RAV appointments.
Can my employer challenge my entitlement to unemployment benefits?
The employer does not have standing to directly challenge the former employee's entitlement to unemployment benefits. It is the unemployment fund (SECO or cantonal fund) that decides. However, if the employer states that the employee resigned or committed a serious fault, the fund may open an investigation and impose a suspension. The insured person may challenge any suspension decision by way of objection.
What should one do in case of suspension of entitlement to unemployment benefits?
In case of suspension, you have 30 days to file an objection with the unemployment fund. The most common grounds for suspension are: job abandonment or resignation without good cause (up to 60 days suspension), insufficient job searches (12-35 days), refusal of a job offer or LMM. It is advisable to consult a lawyer to prepare the objection.