In the event of an employer becoming insolvent, insolvency compensation (IC) covers employees’ open salary claims. In principle, IC may only be claimed for work that has been carried out.
Who is entitled to claim?
Employees obliged to make contributions who work for employers that are subject to enforcement proceedings in Switzerland or employ staff in Switzerland are entitled to IC if ...
- bankruptcy proceedings have been opened against their employer; or
- the only reason bankruptcy proceedings have not been opened is that no creditor has declared their willingness to cover the costs in advance as a result of obvious over-indebtedness; or
- they have made a demand for seizure of salary claims against their employer; or
- a provisional debt-restructuring moratorium has been granted; or
- a judicial deferment of bankruptcy has been granted.
There is no entitlement to IC for people who, in their capacity as a shareholder, as a stakeholder with a financial interest in the company or as a member of the most senior executive decision-making committee, can make or have a significant impact on the employer's decisions, as well as their spouses or registered partners working at the company.
Application for insolvency compensation
Applications for IC must be made by each individual employee to the responsible public unemployment insurance fund (at the company’s domicile).
Antrag auf Insolvenzentschädigung (PDF, 550 kB, 02.10.2017) (in German)
The application for IC must be made within 60 days of ...
- the bankruptcy being published in the SHAB;
- the provisional or definitive debt-restructuring moratorium being published in the SHAB;
- the judicial deferment of bankruptcy being published in the SHAB;
- the enactment of the seizure/the day on which certification of seizure is issued; or
- notice that the deadline for providing an advance payment of costs has expired unused pursuant to Art. 169 para. 2 FDEBA (in the case of obvious over-indebtedness).
Insolvency compensation benefits
Insolvency compensation covers open salary claims for an employment relationship for a maximum of four months at a rate of 100%. Any 13th month salaries or bonuses, vacation or public holiday compensation are considered on a pro rata basis. However, a maximum salary of CHF 12,350 per month can be compensated.
Information on insolvency compensation
Further basic information can be found in the guidance document:
Insolvenzentschädigung - ein Leitfaden für Versicherte (PDF, 131 kB, 01.07.2021) (in German)
The competent public unemployment insurance fund can answer specific questions on insolvency compensation.