Unpaid leave in Switzerland: What you should bear in mind

A longer break from work is a big wish for many people. Unpaid leave offers a flexible solution, but it also raises some questions: what happens to your salary and insurance coverage during this time?

Whether you’re resting, taking a sabbatical, training, traveling around the world or simply spending time with your family, unpaid leave is suitable for anyone who wants to take an extended absence from work – but without giving notice. Employees are temporarily released from work by the company. Although they do not receive a salary during their time off, the employment relationship continues. Unpaid leave always requires an agreement between the employer and employee, as there is no legal entitlement to unpaid leave in Switzerland.

Am I entitled to unpaid leave?

No. Whether unpaid leave is possible depends on the employer. Some companies enshrine corresponding regulations in their employment contracts, in a collective employment agreement (CEA) or in internal employment regulations. Such regulations differ depending on the industry, company and individual agreements. A good example is the public service in the canton of Zurich: unpaid leave is clearly defined under personnel law. Employees of the canton can request unpaid leave if there are important personal reasons and the operational situation allows (in German) it.

What obligations do employees and the company have?

However, many companies do not have such detailed regulations. There, you must negotiate unpaid leave directly with your employer. In any case, when it comes to unpaid leave, both employers and employees have certain obligations to ensure that the time off goes smoothly and in accordance with the law.

Obligations of employees

• Employees must apply for unpaid leave at an early stage, ideally in writing and with a clear reason. 
• You should work with your employer to determine the length of absence. This agreement is binding – termination or extension requires the consent of both parties. 
• It is the responsibility of employees to find out about the discontinuation of benefits, such as accident insurance or pension fund and, if necessary, to take out voluntary continuation of insurance. 

Step by step: Your path to unpaid leave

You should take the following steps when planning and organizing unpaid leave: 

1. Notify early and plan: think about how long you’d like to be absent for and how this affects your financial situation. 
2. Submit a request to your employer: submit a written request, stating the reasons and the desired period. Explain your willingness to sign a written agreement. 
3. Conduct a discussion with your employer: clarify in a personal meeting whether unpaid leave is possible, whether there are operational reasons against it, and what conditions should apply. 
4. Record the agreement in writing: have all the key points confirmed in writing: beginning and end of absence, impact on vacation entitlement, pension fund, accident insurance and job guarantee. 
5. Check your salary statement: check your salary statement carefully for the month in question. The unpaid leave must correctly appear as a deduction; any contributions for continued insurance should be listed separately. 
6. Prepare for your return home: be sure to stick to the agreed deadline for returning home and get in touch in good time. If you’re away for a longer period of time, it can be helpful to talk briefly with your team before returning to work. 

Unpaid leave: What about  insurance?

Another important point that you should take care of in good time is your insurance coverage. This is because unpaid leave can change considerably in some instances. In Switzerland, the following types of insurance are affected: 

• OASI/DI/LEC (Pillar 1): during unpaid leave, neither you nor your employer will pay contributions to Old Age and Survivors’ Insurance (OASI), Disability Insurance (DI), or Loss of Earnings Compensation Scheme (LEC). Extended absences result in a contribution gap, which can later lead to a reduction in your OASI pension. To avoid this, you should register with the cantonal compensation office as not gainfully employed and pay contributions voluntarily.
• UI (unemployment insurance): you do not pay any contributions to unemployment insurance either during the period of unpaid leave. Since the period of absence does not count as a contribution period, you are sometimes not entitled to daily unemployment benefits after you have been given notice or have given up your job.
• AIA (accident insurance):  accident insurance is divided into two areas: while occupational accident insurance (OA) ends on the last working day before unpaid leave, non-occupational accident insurance (NOA) remains in effect for 31 days after the last paid working day. Thereafter, this protection also expires. To maintain coverage for non-occupational accidents, you can take out interim accident insurance for a maximum of six months. This is especially important if you are traveling abroad or staying physically active. 
• OPA (Pillar 2 of the pension fund): unpaid leave means that you are not earning a salary and therefore generally no longer pay contributions to the pension fund. This means that not only is your retirement provision suspended, but also your risk protection in the event of death or disability (in some cases, protection remains in place for a certain period of time – often for a month – before it expires). For longer absences, it is therefore a good idea to look into a private pension solution to bridge the gap.

What effect does unpaid leave have?

In addition to insurance, choosing unpaid leave has other legal and financial consequences. 

Employment contract, work performance and salary

In principle, the employment relationship continues during unpaid leave; only your obligation to work and your entitlement to salary are suspended during your absence. There is no entitlement to continued salary payment, not even on a pro rata basis. On a side note, termination of employment during unpaid leave is generally permitted, unless otherwise agreed.  

Accident and sickness risks

As already mentioned, unpaid leave means that your occupational accident insurance no longer applies. If non-occupational accident insurance expires after 31 days, there is no longer any accident protection without supplementary insurance – not even during your leisure time. The same applies to daily sickness benefits coverage: depending on the company and insurance model, this expires either in full or in part. This means that you bear the full risk of illness or accident during your time off unless you take out insurance voluntarily. 

Vacation entitlements and days off

Unpaid leave reduces your vacation entitlement on a pro rata basis, as you will not be working during this time. By law, you are entitled to a minimum of four weeks’ vacation per full year of employment. However, this is reduced accordingly in the event of an extended unpaid absence. Company vacation regulations, such as additional vacation entitlement after years of service, can also be affected by time off. 

Internal work deadlines and periods

Unpaid leave affects the calculation of years of service if the absence lasts longer than one month. In many companies, such time off does not count as eligible length of service, especially if it is voluntary and long-term. This can result in deadlines for certain entitlements being postponed (e.g. longer notice periods, additional vacation leave based on years of service, or anniversary benefits). When calculating notice periods based on length of employment, unpaid leave can also result in an interruption of qualifying time.  

Return to work

After the agreed term, unpaid leave ends automatically and you will resume your work duties. Entitlement to the same job applies only if this has been documented in writing. In the case of longer breaks in particular, it is therefore advisable to talk to line managers early to ensure a smooth return to work. In some companies, a brief interview is held before returning to discuss tasks, working hours or new developments in the team.