Where an employee falls ill in Switzerland, payment of his remuneration does not stop at once.
Employment law imposes on the employer a temporary maintenance obligation intended to compensate the loss of earnings of the employee who is prevented from working through no fault of his own.
This statutory obligation depends, however, on precise conditions for it to arise, and it may be replaced by a collective daily-allowance insurance scheme.
The conditions for the obligation to arise and the duration of the statutory obligation
Continued payment of salary by the employer requires strict statutory criteria to be met, and its duration changes according to the employee’s length of service:
- The prior conditions of access: The employee must be prevented from working by a cause inherent in his person, through no fault of his own; in addition, the incapacity must arise when the contract has already lasted more than three months or was concluded for a term of more than three months (from the first day of work in this second case), and the impairment of health must make performance of the work concretely impossible to require.
- The minimum duration of payment: During the first year of service, the employer must pay 100% of the salary for a statutory minimum of three weeks; thereafter, payment extends for a longer period fixed equitably according to the years of service and the practice of the cantonal scales (the Bern, Basel or Zurich scales). The obligation ends in principle when the contract comes to an end.
Replacement by a daily-allowance insurance
In ordinary practice, most Swiss employers depart from the statutory scheme by taking out a specific insurance cover:
- The requirement of equivalent benefits: The employer may release himself from his direct obligation to pay the salary by providing, through a written agreement, a standard employment contract or a collective employment contract, for a daily-allowance insurance in the event of illness offering benefits that are at least equivalent; under the recognised criteria, this equivalence is generally accepted where the insurance guarantees payment of at least 80% of the salary for 720 days within a period of 900 days, with a reasonable waiting period and an employer contribution of at least half the premiums.
- Substitution of obligations and the continuation of compensation: Once such a collective insurance has been validly taken out, the insurer takes the employer’s place for the payment of benefits in the event of illness; depending on the terms of the agreed cover, daily-allowance benefits may continue to be paid to the person who is ill even after the end of the employment contract.
This obligation rests on Article 324a CO. For as long as the incapacity lasts, the employee also benefits from a protection period against dismissal. These questions are to be read with the precautions described in legal AI for individuals.
Legal sources
Federal legislation:
- Art. 324a CO (obligation to continue paying salary in the event of non-culpable prevention from working, conditions as to length of service, statutory minimum duration and equivalence of substitute insurance)
- Art. 72 HIA (framework conditions for daily allowances under health insurance, payment for 720 days within 900 days)
Federal case law:
- Federal Supreme Court judgment 4C.193/2005 (strict application of the time condition of three months of actual work or of a contract concluded for more than three months)
- Federal Supreme Court judgment 4A_221/2025 (requirement of a causal link between the medical impairment and the incapacity for work in order for the right to salary to arise)
- Federal Supreme Court judgment 4A_428/2014 (conditions for replacing the obligation to pay salary by a collective loss-of-earnings insurance that meets the equivalence requirements)
- Federal Supreme Court judgment 4A_50/2011 (fundamental distinction between the employer’s direct obligation, which ends with the end of the contract, and the continuation of the insurance benefits beyond the end of the employment relationship)