Swiss Federal Council plans normalization of short-time work compensation

The Swiss Federal Council is planning a gradual return to standard regulations for short-time work compensation (KAE) due to a more robust economic outlook. Following discussions on October 21, 2026, officials noted that the Swiss economy is developing more strongly than expected, with projected growth of 1.7% for 2026 and 1.6% for 2027.

Currently, the maximum duration for receiving compensation is 24 months, with a waiting period of one day. The Council intends to transition back to the standard 12-month maximum duration throughout 2027. The current 24-month limit remains in effect until January 31, 2027. In December 2026, the Council will review the economic situation to determine if the maximum duration should be extended beyond February 2027 and what the specific duration should be.

While the economic trend supports normalization, the Council remains cautious regarding risks such as geopolitical tensions, high energy prices, and trade policy uncertainty. Officials stated they will continue to monitor economic developments closely and maintain dialogue with social partners and the business community.