Paternity leave: what has changed!

1. What is paternity leave?

The broad term “paternity leave” encompasses two elements that are subject to different conditions. On the one hand, there is a financial right to paternity benefits under the Income Compensation Act (ICA), and on the other, there is a strict right to paternity leave, i.e., release from the obligation to work, under the Code of Obligations (CO).

2. When do fathers receive paternity benefits?

Only men who have a legal relationship with the child at the time of its birth or whose legal relationship with the child is established within six months of the birth are entitled to paternity benefits under Art. 16i para. 1 ICA. The parent-child relationship with the father’s natural child is established by marriage to the mother, by recognition of paternity or by a court decision. In the case of adoption, there is no entitlement to paternity leave based on Art. 16i para. 1 ICA.

To be entitled to paternity benefits, the father must also be (i) employed or self-employed at the time of the child’s birth, (ii) working in the mother’s enterprise and receiving a cash salary for this, (iii) unemployed and receiving a daily allowance from the unemployment insurance, (iv) performing military or civilian service, or (v) unable to work due to illness, accident or disability and receiving daily allowances from a social or private insurance.

In addition, the father must have been compulsorily insured with the Old-age and Survivors’ Insurance (OSI) for a period of nine months immediately before the birth of the child and have been gainfully employed for at least five months during this period. For Swiss or EU/EFTA citizens, periods of employment in an EU or EFTA state may be taken into account. If the child is born before the end of the 9th month of pregnancy, the duration of compulsory OSI is reduced accordingly.

If all conditions are met, the father is entitled to paternity benefits up to a maximum of 14 daily allowances (calendar days) (see section 4).

3. What are the conditions for paternity leave in the strict sense?

In contrast to paternity benefits, the two-week paternity leave pursuant to Art. 329g para. 1 CO is conditional on the employee’s employment contract being subject to Swiss private law and on a legal parent-child relationship with the father existing at the time of the child’s birth or on such a relationship being established within six months of the child’s birth. There are no other conditions to be met to benefit from paternity leave in the strict sense. Therefore, a father who does not qualify for paternity benefits and does not collect any benefits can nevertheless be released from his obligation to work. However, the employer is not legally obliged to continue paying the salary during this period (for more details see section 7).

4. During what period can paternity benefits or leave be taken?

Entitlement to paternity benefits or leave arises, like entitlement to maternity benefits, with the birth of the child.

Entitlement to paternity benefits ends (i) on the expiry of the six-month period from the date of birth, (ii) on the exhaustion of the 14 daily allowances, (iii) on the death of the father, (iv) on the death of the child, or (v) on the repeal of paternity.

Paternity leave (i.e., the days of leave) can be taken within six months of the birth of the child. If the leave days are not taken within this period, they are lost. Due to the clear wording of the law in Art. 329g para. 2 CO, the period for taking paternity leave starts with the birth, even if the legal relationship with the child does not appear until later. In our opinion, even a longer hospital stay of the child cannot justify a later start of the six-month reference period, especially as the legislator had deliberately provided for a long reference period. The end of paternity leave, on the other hand, is not expressly regulated in the CO. It follows from the six-month reference period that there is no entitlement after the expiry of this period. The entitlement to paternity leave also ends before the six-month period expires as soon as the entitlement to compensation ends (e.g., if the child dies shortly after birth).

5. How long is paternity leave?

During the six months following the birth of the child, the father can take paternity leave either for 14 consecutive calendar days (including days that fall on weekends), or by the day (10 working days) or by the week (5 working days each).

If the father takes his paternity leave on a daily basis, the number of daily allowances is calculated based on the number of days of paternity leave taken. For every five days of paternity leave, two additional daily allowances are paid (i.e., if the father takes paternity leave on a daily basis, he receives seven daily allowances after taking five days). Thus, ten working days give rise to 14 daily allowances. If the father takes paternity leave on a weekly basis, he receives seven daily allowances per week.

6. What should be considered when taking paternity leave?

The provisions regarding vacation of the CO also apply to paternity leave. Therefore, the employer determines the date of paternity leave. In doing so, the employer takes into account the employee’s wishes insofar as they are compatible with the company’s interests. However, the father’s interests must be considered to a greater extent when taking paternity leave than when taking ordinary leave, since this additional leave was introduced precisely to support the father, mother and child in the initial phase and the period for taking it is limited. The requested withdrawal should only be prohibited in cases of very urgent operational necessity. The father should be able to request paternity leave even at short notice, especially as births may also occur earlier than expected and the father’s support may be important especially in the first weeks. The employer may, however, reduce the number of days of leave requested with the employee’s consent, but in doing so the parties must ensure that the father is able to take the two weeks of paternity leave within the six months.

The employer’s refusal to grant paternity leave because the reference period has expired may constitute an abuse of rights. This is the case, for example, if the employer refuses to grant paternity leave within six months of the birth on the grounds of the company’s interest. The normal holiday entitlement of the father taking paternity leave cannot be reduced because paternity leave and paternity leave days do not replace holidays.

In some cases, the father’s exercise of paternity leave may also be unlawful. For example, if the mother lives abroad and has broken off contact with the father or if his parental authority has already been revoked with respect to a prior common child. On the other hand, if the father provides evidence to the contrary, obtaining paternity leave is not abusive.

7. How much paternity benefits do fathers receive? Who should register?

Paternity benefits for taken paternity leave are paid out in the form of a daily allowance. The father is entitled to a maximum of 14 daily allowances within the reference period of six months.

The calculation is made in the same way as for maternity benefits. The compensation amounts to 80 % of the average gross income before the birth, up to a maximum of CHF 196 per day. In the case of irregular income, an average value is taken as a basis. The relevant reference period for calculating the average value is to be determined in each individual case. The total amount is a maximum of CHF 2,744 for two weeks of paternity leave and 14 paid daily allowances. If the father has no income from gainful employment at the time of the birth, but receives a daily allowance from the disability insurance, compulsory health insurance, compulsory accident insurance, military insurance or unemployment insurance, the paternity allowance is at least equal to the amount of this daily allowance. The paternity allowance is not paid automatically but must be applied for at the competent compensation fund.

For gainfully employed fathers, the application is submitted by the employer. Self-employed fathers register themselves and fathers who are unemployed or unable to work have the last employer fill out the employment relationship and salary information and submit the completed application themselves. If the employer continues to pay wages to the employee, the allowance is paid to the employer. In all other cases, it is paid directly to the father.

Since 2005, maternity insurance benefits under the ICA have replaced the employer’s obligation to continue paying wages during maternity leave. The analogous application for paternity leave does not explicitly result from the new provisions of the ICA or the CO. Because of the requirement of concomitance of the ICA and the CO in the area of maternity benefits and the requirement of the same in the area of paternity benefits, the same rules must also be applied to paternity benefits. Only in this way is the constitutional requirement of equal treatment of men and women fulfilled. Therefore, employers are not legally obliged to continue paying wages during the period of paternity leave. Of course, the employer can still contractually agree to pay a higher compensation and waive a salary reduction.

8. What happens to paternity leave in the event of termination?

If the employer terminates the employment relationship with the father after the birth of his child or if the child is born during the notice period, the notice period (and thus the employment relationship) is extended by the days of paternity leave not yet taken. The extension of the notice period is justified by the fact that the father – unlike the mother – has no protected period and can therefore be lawfully dismissed within the six-month reference period by the employer. On the other hand, if the father gives notice, this does not lead to an extension of the notice period. Termination during the probationary period does not lead to an extension of the notice period either. Neither in the case of termination by the father nor in the case of termination during the probationary period does the father lose the right to paternity leave and can also claim this right from a new employer.

For the extension of the notice period, the decisive factor is the number of days of paternity leave that the father has not yet taken when the notice period ends. Therefore, if the employee becomes a father during the notice period (even on the last day of the notice period), the notice period and thus, of course, the employment relationship will be extended. However, the father can waive the extension of the notice period, especially since he can also assert his right with a new employer. It is not clear whether the extension of the notice period leads to an extension of the employment relationship until the subsequent end of the month within the meaning of Art. 335c para. 1 CO. It is clear from the legislative documents that the extension of the notice period is intended to allow paternity leave to be taken while employed by the former employer. For this reason, we believe that the legislator did not intend a further extension until the end of the following month. However, the issue will have to be clarified by the courts.

What happens to the entitlement to paternity leave and paternity benefits if the father changes jobs before taking all the days of leave is not addressed in the CO or ICA. Art. 16j para. 3 lit. a-e ICA regulates the reasons for the termination of the entitlement to compensation exhaustively and does not provide for a termination due to a change of job because a cessation of the entitlement to benefits also leads to a cessation of the entitlement to paternity leave, in the opposite case, if there is an entitlement to benefits, an corresponding entitlement to paternity leave must thus be assumed. This understanding of the current regulation is supported by the fact that the legislator did not want to place the employee who terminates the employment relationship himself in a more unfavourable position than the dismissed employee. Therefore, the right to paternity benefits and paternity leave does not end even if the employee terminates his employment. On the contrary, it is possible for the father to take his paternity leave during a transitional period without employment or even during the new employment relationship. The latter, however, is only possible if the new employer agrees.

If the employee does not take all the days within the six-month period foreseen for paternity leave, the current legal situation does not clarify how to proceed with the remaining entitlement (e.g., forfeiture).

9. How is paternity leave funded?

Paternity leave is funded by contributions to the Compensation for Loss of Earnings system under Swiss social security. These contributions are levied simultaneously as contributions to the Old-age and Survivors’ Insurance (i.e., retirement contributions). Employers and employees share the contributions. For the self-employed, the income earned in the contribution year is used as the basis for calculation. People who are not in gainful employment also pay contributions. Due to the introduction of paternity leave, the contribution rate will be increased by 0.05 %. Contributions will be adjusted from 0.45 to 0.5 per cent of salary. This corresponds to an increase of CHF 0.50 per CHF 1,000 of salary. The cost of paternity leave is expected to be around CHF 230 million per year.

10. The main takeaways in a nutshell

Paternity leave brings with it new rights and obligations for both employers and employees. The employer decides the time at which paternity leave is to be taken. However, in doing so, the employer must safeguard the father’s interests and may only deny the requested time off in urgent cases. In particular, the father’s standard holiday entitlement cannot be reduced by paternity leave. Paternity leave does not replace holiday time. If the employer terminates the employment relationship and the father has not yet taken the full paternity leave, the notice period and thus the employment relationship is extended by the number of paternity leave days not yet taken.

Paternity benefits, like maternity benefits, are handled by the compensation fund. Because benefits are not paid automatically, the father (or the employer) must apply to the compensation fund for the entitlement. The father must then apply for the benefit from his employer. In practice, the employer submits the father’s application to the competent compensation fund, advances the daily allowance and claims the benefit himself, since paternity benefits is only paid once in arrears after the entitlement has ended. Self-employed and unemployed fathers apply to the cantonal compensation fund themselves and receive the paternity benefits directly.

The law does not expressly address what happens to an employee’s right to paternity leave if he changes jobs or terminates his employment. Nonetheless, in our opinion the employee should be able to take paternity leave under either the previous or new employment relationship provided there is an entitlement to paternity benefits.

As described above, there are still several unresolved issues concerning the right to paternity leave, especially when fathers are dismissed and hired within six months of the child’s birth. It is therefore necessary to address this jointly early on, not least for the employer, but also for the father. Other issues will most likely be clarified by the courts in the coming years.

If you have any queries about implementing paternity leave in your organisation, our specialists Philipp Bachmann and Simon Fricke will be pleased to assist you.