Understanding how to apply for short‑time work compensation in Switzerland is essential for any employer facing a temporary business downturn in 2026. Short‑time work compensation, known as Kurzarbeitsentschädigung (KAE), allows Swiss employers to reduce employees’ working hours while the federal unemployment insurance (ALV) covers a portion of the resulting wage loss, thereby preserving jobs during economic disruptions. On 27 May 2026 the Federal Council extended the temporary maximum eligibility period for KAE to 24 months, creating new planning considerations for employers already claiming or preparing to file. This guide provides the complete Kurzarbeit 2026 process: eligibility criteria, the step-by-step application procedure, required documents, timelines, payroll treatment and common pitfalls.

Overview of the Kurzarbeit Process and Who It Applies To

The Kurzarbeit process in Switzerland is governed by the Federal Act on Unemployment Insurance (AVIG, SR 837.0) and its implementing ordinance (AVIV). Its purpose is straightforward: when an employer experiences a temporary, unavoidable reduction in work volume, the ALV reimburses 80 % of the eligible lost earnings directly to the employer, who continues to pay employees their reduced wages. This mechanism avoids redundancies and keeps the employment relationship intact.

The scheme applies to employers with a registered place of business in Switzerland whose employees are covered by Swiss social insurance. Cross-border workers employed and insured in Switzerland may also be included, though employers should verify notification obligations under the SEM guidance for posted and frontier workers.

At a high level, the Kurzarbeit process follows six sequential stages:

Internal decision and quantification of lost hours.
Advance notification (Voranmeldung) to the responsible cantonal office or via Job‑Room.
Employee information and consent collection.
Formal application and eService submission.
Monthly settlement (Abrechnung) and payment processing.
Appeals or corrective measures if the claim is denied or adjusted.

Official forms, eService portals and detailed guidance are published by arbeit.swiss and by SECO via the KMU‑Portal. The sections below walk through each stage in detail.

Eligibility and Short‑Time Working Compensation Requirements

Before filing a Kurzarbeit application, employers must confirm that both the business situation and the affected employees satisfy the eligibility criteria set out in AVIG Art. 31 et seq. and the corresponding AVIV provisions. Failure to meet these prerequisites is the most common reason for claim rejection.

Business-Level Test, When Short‑Time Work Is Justified

The reduction in working hours must be attributable to economic factors that are temporary and beyond the employer’s control, for example, a significant decline in orders, supply chain interruptions or government-mandated restrictions. The employer must demonstrate a reasonable expectation that normal working hours will resume after the short‑time work period ends.

Additional business-level conditions include:

Scope of impact. A significant proportion of the workforce in the relevant operational unit must be affected by the working-hour reduction.
Loss threshold. The expected loss of working hours must be substantial enough to justify the administrative burden of a claim.
No permanent restructuring. KAE is not available to cover structural job losses; employers must show a credible path to recovery.
Employer self-retention (Karenzzeit). The employer bears the cost of the first working day of lost hours per settlement period (one working day per month under the standard rule).

Since the Federal Council decision of 27 May 2026, the temporary maximum claim period has been extended to 24 months. Employers who were approaching the previous ceiling can now consider continuation applications, provided they satisfy ongoing eligibility requirements and submit updated documentation substantiating the continuing business need.

Employee-Level Requirements, Working Time Control and Consent

At the employee level, the following short‑time working compensation requirements apply:

Employment relationship. The employee must remain employed and covered by Swiss social insurance (OASI/DI/UI).
Working time control. The employer must maintain verifiable daily records of ordinary contractual hours, hours actually worked, and economic downtime hours for each affected employee. These records are mandatory for audit purposes.
Employee consent. Employees must agree to the reduction in working hours. Where a collective bargaining agreement (CBA) applies, it may govern the consent mechanism. In the absence of a CBA, employers typically obtain individual written consent declarations.
Apprentices and trainees. Special rules apply. Apprentices may generally not be placed on short‑time work if it interferes with their training obligations. Employers must document training hours separately.
Contribution history. Employees must generally be subject to compulsory unemployment insurance contributions. Persons with a controlling stake in the business (e.g., majority shareholders or managing partners) are typically excluded.

Step‑by‑Step Procedure for Applying for Short‑Time Work Compensation in Switzerland

The following numbered procedure outlines the employer steps for Kurzarbeit from initial decision through to settlement and appeal. The accompanying timeline table provides a quick reference for responsible parties and typical durations at each stage.

Step	Who does it	Typical duration
1. Internal decision & quantify lost hours	Employer (HR + Finance)	1–5 business days
2. Advance notification (Voranmeldung) to cantonal office / Job‑Room	Employer (submit via Job‑Room or canton)	Immediate, allow 1–10 business days (ordinary = 10 days recommended)
3. Employee information & consent collection	Employer (HR)	1–7 business days (depends on workforce size)
4. Formal application (Antrag) & select unemployment fund	Employer (submit eService / form)	1–7 business days for submission; approval: typically 3–14 business days (varies by canton)
5. Monthly settlement (Abrechnung) & payment processing	Employer (payroll) + Unemployment fund	Monthly, payment lag 2–6 weeks after settlement accepted
6. Appeal / compliance correction	Employer (with counsel if needed)	Typical appeal period: 30 days from decision letter

Step 1: Internal Decision and Documentation

Before any external filing, the employer must formalise the decision to introduce short‑time work. This involves quantifying the anticipated reduction in hours by department, identifying the affected employees, and projecting the expected duration. Finance teams should prepare a payroll holdback model that accounts for the employer self-retention (one working day per month) and the expected KAE reimbursement at 80 % of eligible lost earnings. The internal business case should document the economic reasons (e.g., order book decline, supply disruption) and be approved by the competent management body, whether that is the board, the managing director or the authorised signatory.

Step 2: Pre‑Notification (Voranmeldung) to the Cantonal Office or Job‑Room

The employer must submit an advance notification, the Voranmeldung von Kurzarbeit, to the responsible cantonal employment office (KAST). Under the ordinary procedure, this notification should be filed at least 10 calendar days before short‑time work is scheduled to begin. Some cantons accept electronic submission via the Job‑Room eService portal, while others require a canton-specific form in PDF or XLSX format.

The Voranmeldung must include the company name and UID number, the nature of the economic difficulty, the anticipated period of short‑time work, the number and identity of affected employees, and the expected percentage reduction in working hours. Employers should begin maintaining daily working-time records from the first day of reduced hours, as these records are required for settlement and audit. In emergency situations, such as sudden government-ordered shutdowns, cantons may accept shortened notice periods, but employers must confirm the applicable exception rules directly with the cantonal office.

Step 3: Employee Information and Consent

Affected employees must be informed about the planned reduction and must consent to the working-hour change. Where a CBA governs, the consent procedure may follow collective rules. In all other cases, the employer should obtain a written declaration of consent from each employee. A standard consent template typically states the anticipated reduction period, the adjusted working schedule, and the employee’s acknowledgement that KAE will be claimed. Apprentices are generally excluded from short‑time work where the reduction would interfere with their vocational training; employers must separately document training schedules and hours for any apprentices in the affected unit.

Step 4: Formal Application and eService Submission

Once the cantonal office has processed the Voranmeldung and any approval or acknowledgement has been received, the employer submits the formal application and settlement to the chosen unemployment insurance fund. The primary submission channel is the Job‑Room eService operated by arbeit.swiss. Alternatively, employers may request paper forms from their unemployment fund, the relevant forms are typically referenced as Antrag und Abrechnung von Kurzarbeit.

The formal application requires the employer’s bank account details for reimbursement, a payroll summary showing gross wages and the calculated KAE amount for each affected employee, and a selection of the unemployment insurance fund that will process the claim. Employers must ensure all uploaded documents are complete and reconciled against the daily working-time records, as incomplete submissions are the most frequent cause of processing delays.

Step 5: Monthly Settlement and Documentation

KAE claims are settled on a monthly basis. After the end of each calendar month of short‑time work, the employer submits a settlement (Abrechnung) via the Job‑Room eService or directly to the unemployment fund. The settlement must reconcile actual hours worked, economic downtime hours and contractual hours for each employee, supported by payroll registers and daily time records.

Any interim employment income earned by affected employees during their reduced hours must be declared, as it reduces the KAE entitlement. Records must be retained for the minimum period specified by the unemployment fund (typically five years, though employers should confirm with their fund). Employers should reconcile the KAE reimbursement received against the amounts claimed and flag any discrepancies promptly.

Step 6: Appeals and Corrective Measures

If a claim is denied or adjusted, the cantonal office or unemployment fund will issue a formal decision letter (Verfügung) stating the grounds. Typical reasons for rejection include insufficient evidence of a temporary business downturn, incomplete documentation, late filing or inclusion of ineligible employees. The decision letter will specify the appeal period, usually 30 days. Employers facing a denial should review the stated grounds, gather supplementary evidence and, where the claim involves significant amounts or complex cross-border situations, consider engaging specialist Swiss labour counsel.

Documents Needed for a Kurzarbeit Application

Employers preparing to claim Kurzarbeit must compile a specific set of documents. The table below lists each required document alongside notes on the issuer, format and retention requirements.

Document	Notes (issuer, format, retention)
Advance notification (Voranmeldung von Kurzarbeit)	Employer: use canton-specific form or Job‑Room eService. Keep signed copy. Typically PDF or XLSX format.
Formal application & settlement (Antrag und Abrechnung von Kurzarbeit)	Employer: submit via Job‑Room eService or request form from unemployment insurance fund. Includes payroll summary and employer bank details.
Employee consent declaration	Employer: signed by each affected employee (where required by company policy or CBA). Store electronically or in personnel file.
Daily working-time records	Employer: daily records of contractual hours, hours actually worked, economic downtime and any overtime. Required for audit. Retain for a minimum of five years (confirm with fund).
Payroll registers (gross wages & social contributions)	Employer: monthly payslips and payroll journal entries for each settlement period.
Evidence of interim employment income	Employer/employee: any salaries from interim employment must be declared and deducted from the KAE entitlement.
Apprentice training hours evidence	Employer: training contracts and time records. Special rules apply to vocational training during short‑time work.
Decision / communication from canton or fund	Authority: approval or denial letters. Retain for appeals and compliance records.

Incomplete documentation is the single most frequent cause of delayed or reduced payments. Employers should treat the document checklist above as a minimum and verify canton-specific requirements with their responsible cantonal office or unemployment fund.

Kurzarbeit Timeline and Key Deadlines

The Kurzarbeit timeline involves several fixed and variable deadlines. The table below summarises the critical milestones.

Event	Typical deadline / timing	Notes
Pre-notification (Voranmeldung)	At least 10 calendar days before short‑time work begins (ordinary procedure)	Emergency exceptions may shorten this, confirm with canton.
Decision by cantonal office / fund	Typically 3–14 business days after complete application	Varies by canton and complexity.
First settlement submission	Monthly, after end of each calendar month	Use Job‑Room eService or form; payroll evidence required.
Payment to employer from fund	Typically 2–6 weeks after settlement accepted	Depends on fund processing and documentation completeness.
Appeal period on denial / adjustment	Usually 30 days from decision letter	See decision letter for exact period.
Maximum eligibility period (temporary)	24 months, extended by Federal Council on 27 May 2026	Applies until 31 January 2027 per SECO guidance. Amended Ordinance in force since 1 November 2025.

Employers with ongoing claims who were approaching the earlier maximum should note that the 27 May 2026 extension applies automatically to claims that remain within the eligibility window, but continued eligibility must still be demonstrated monthly through up-to-date settlement documentation and evidence of a persisting temporary business downturn.

Costs, Fees, and Kurzarbeit Payroll Treatment

Employers should budget for their net exposure carefully. While KAE reimburses a significant share of wage costs, the employer bears several direct and indirect costs.

Item	Amount / rule	Notes
Employer self-retention (Karenzzeit)	1 working day per month (standard rule)	Employer absorbs this first loss of earnings each settlement period.
Kurzarbeitsentschädigung rate	80 % of eligible lost earnings	Paid by unemployment insurance to employer; subject to insured salary maximums.
Employer social contributions	Employer continues to pay employer portions of OASI/DI/UI/EO	ALV reimburses certain employer contributions, check SECO guidance for current scope.
Payroll admin / compliance cost	Varies (internal time or external provider fee)	Factor into cost-benefit analysis versus redundancy.

For Kurzarbeit payroll treatment, employers must record the full contractual gross wage, the KAE-eligible lost-earnings portion and the ALV reimbursement as separate line items. An illustrative payroll journal entry for a month with short‑time work might appear as follows (example, adapt to your company chart of accounts):

Dr. Wage expense (regular gross for full contractual hours), CHF XXX
Cr. Cash / bank (net pay to employees), CHF YYY
Cr. Employer social contributions payable, CHF ZZZ
Cr. Short‑time compensation receivable (ALV claim at 80 % of eligible lost earnings), CHF AAA

This separation ensures transparent audit trails and correct reconciliation against monthly settlements received from the unemployment fund.

What Changes in Kurzarbeit 2026

The most significant procedural change for employers in 2026 is the Federal Council decision of 27 May 2026 to extend the temporary maximum eligibility period for KAE to 24 months. The underlying Ordinance amendment entered into force on 1 November 2025, and the 27 May 2026 extension applies until 31 January 2027.

The operational impacts for employers are substantial:

Ongoing claims. Employers who were approaching the previous maximum (12 or 18 months) can now file continuation applications, provided they submit updated evidence that the business downturn remains temporary and that a return to normal operations is still expected.
Re-checking eligibility. The extension does not exempt employers from ongoing eligibility checks. Each monthly settlement must still demonstrate that the conditions under AVIG Art. 31 et seq. continue to be met.
Accounting and budgeting. Finance teams should update their projections: the extended claim window may alter cash-flow models, provision calculations and workforce planning timelines.
Training and apprentices. For employers with apprentices, extended periods of short‑time work increase the risk of training non-compliance. Employers should review training schedules proactively and consult with the cantonal vocational training office if necessary.

Industry observers expect SECO to issue updated practice circulars reflecting the 27 May 2026 decision. Employers should monitor the SECO publications page for revised Weisungen AVIG KAE guidance.

Common Pitfalls and How to Avoid Them

Even experienced employers encounter procedural errors when filing Kurzarbeit claims. The following pitfalls are the most frequent causes of delays, reductions or outright denials.

Incomplete or missing daily time records. The unemployment fund requires granular daily records of ordinary, worked and downtime hours per employee. Generic timesheets or monthly summaries are insufficient. Implement a compliant time-tracking system before the first day of short‑time work.
Late or omitted Voranmeldung. Filing the advance notification after short‑time work has already begun forfeits entitlement for the uncovered period. Always submit the Voranmeldung at least 10 calendar days in advance under ordinary procedure.
Incorrect lost-hours calculation. Employers sometimes miscalculate the eligible lost earnings, for example, by including overtime hours, holiday entitlements or already-compensated absences. Follow SECO guidance precisely.
Missing employee consent. Failure to obtain and retain written consent from each affected employee can invalidate the claim. Collect consent declarations before implementation begins.
Undeclared interim employment income. If affected employees take on temporary side work, this income must be declared and deducted from the KAE entitlement. Non-disclosure may trigger fund reclaims.
Incorrect payroll treatment. Recording KAE reimbursements incorrectly in the accounting system, for example, netting them against wage expense without a separate receivable, creates reconciliation problems and potential audit findings.

Employers facing complex situations, such as cross-border worker claims, fund reclaims of previously paid amounts, or large-scale denials, should seek advice from qualified Swiss labour lawyers without delay.

Conclusion

Knowing how to apply for short‑time work compensation in Switzerland, and executing each step correctly, is the difference between a smooth reimbursement cycle and costly delays or claim denials. The 2026 extension of the KAE maximum duration to 24 months gives employers additional runway, but it also demands rigorous ongoing documentation and monthly eligibility checks. By following the step-by-step procedure outlined above, maintaining complete daily time records from day one, and monitoring SECO guidance for updated practice circulars, Swiss employers can navigate the Kurzarbeit process with confidence and preserve their workforce through temporary downturns.

Need Legal Advice?

This article was produced by Global Law Experts. For specialist advice on this topic, contact Audrey Pion at Locca Pion & Ryser, a member of the Global Law Experts network.