Swiss Strategies for Alleviating Impact of American Tariffs via Short-term Work Assistance Programs

Swiss businesses facing temporary financial difficulties due to unusual events, such as economic downturns or tariffs, may be eligible for the KAE/RHT/ILR program. This instrument, known as Kürzarbeitsentschädigung (KAE) in German, Régime de la court-partiel (RHT) in French, and Indennità di Lavoro di Riduzione Orarie (ILR) in Italian, has proven to be a effective tool for mitigating the consequences of economic downturns and protecting threatened jobs.

The Federal Council has expressed support for the extension of short-time work benefits for Swiss businesses most affected by Europe's steepest tariffs, specifically those imposed by the Trump administration on Swiss imports. The previous ordinance regarding short-time work benefits expired on July 31st, 2025, and an extension is being sought to provide relief for businesses currently under strain.

Short-time work benefits are intended for companies facing temporary financial difficulties out of their control and unable to pay their employees' wages. Unlike unemployment benefits, these benefits are not paid directly to the redundant employee. Instead, they are paid to the employer, who must continue to pay the workers their full salaries. The employer is then reimbursed for a portion of the wages paid during the short-time work period.

The amount of reimbursement is not specified in the article, but the unemployment insurance covers employers affected by KAE/RHT/ILR for 80% of the loss of earnings attributable to the reduction in working hours. This means that the employer would only need to cover 20% of the wages during the short-time work period.

The application process for KAE/RHT/ILR involves providing documentation to justify the request. The responsible cantonal employment office processes these applications. KAE/RHT/ILR is self-funded through contributions from companies and employees.

Short-time work benefits were utilized extensively during the Covid pandemic and are currently being considered for businesses affected by the 39-percent customs duties imposed by the Trump administration on Swiss imports. The extension of short-time work benefits is being sought in response to the economic burden imposed by these duties.

The KAE/RHT/ILR program also benefits employees by enhancing their skills, improving efficiency, or better resource management, although precise definitions depend on the company's context. By allowing companies to keep their employees during temporary financial difficulties, the program helps to preserve the skills and knowledge within the workforce, which can lead to a smoother recovery once the difficult period passes.

In summary, the KAE/RHT/ILR program is a valuable tool for Swiss businesses facing temporary financial difficulties. By providing reimbursement for a portion of wages paid during a short-time work period, the program helps businesses to keep their employees and maintain their workforce, ultimately protecting threatened jobs and mitigating the consequences of economic downturns. The Federal Council's support for the extension of the program in response to the economic burden imposed by the Trump administration's customs duties is a positive step towards supporting businesses and preserving jobs during these challenging times.

Swiss Strategies for Alleviating Impact of American Tariffs via Short-term Work Assistance Programs