Do Employers Have to Pay Wages During a Business Closure?
There are various situations in which an employer is required to pay wages, although no work is being undertaken in return.
Ongoing payment of wages in the event of no-fault inability to work
If an employee is unable to work for reasons relating to his person, such as sickness, an accident or complying with legal duties, he will be entitled to ongoing payment of wages for a certain period (Art. 324a Swiss Code of Obligations).
A further condition for ongoing payment of wages is that the inability to work is not the employee’s fault. In this regard, traffic or sporting accidents are not normally considered to be the employee’s fault. However, on an individual basis or where particularly risky activities are involved, an employee can be considered at fault for an accident-related absence. In this case there will be no right to ongoing payment of wages.
In addition, there is no duty to continue to pay wages for reasons not relating to the employee’s person, such as natural disasters, bad weather, traffic blockades or other similar reasons.
Failure by the employer to accept work
If it is the employer’s fault that work cannot be undertaken, it must still continue to pay wages. In principle, the employer is responsible for providing suitable conditions to ensure that an employee can undertake his work. For example, if the workplace is not ready in time for the employee, the employer must still pay wages, even if the employee cannot work. There is no obligation to make up the missed work in this case.
Even if the employer is not at fault, but the reason for the failure to accept the work lies within its area of risk, there will still be a duty to pay wages.
For example, this will be the case if the employee cannot be assigned any work due to a lack of orders, or if work cannot be carried out because of operational disruption.
In all cases, to be entitled to payment of wages an employee must fulfill his obligations and offer to work, meaning that he must be available to work and, where appropriate, undertake work other than that originally envisaged.
Business closures by public authorities do not automatically fall under the employer’s area of risk
As a general rule, employers bear the business risk and cannot pass this on to their employees. If a business has to close temporarily due to an order of a public authority, it should be checked whether this type of business closure falls within the employer’s area of risk in the specific case. Personal reasons on the employer's side come under its area of risk. This could include a temporary business closure due to the conditions for a required operating license not being met.
In contrast, objective reasons which affect everyone in the same way and not only the employer’s business would not be included in this. For example, according to a decision of the Swiss Federal Supreme Court of August 30, 2023 (4A-53/2023), business closures by public authorities due to the coronavirus are to be considered an objective reason which does not give rise to a duty for an employer to continue to pay wages.
However, it should be considered in each individual case whether, despite closure of the business, it is still possible for employees to continue to work under the specific circumstances, which could avoid an hours deficit (e.g., by implementing online teaching if a private school is closed due to the coronavirus).