Fatherhood: vacation joys are already in sight - plan the details!

Anyone who is legally considered the father of the newborn child at the time of birth or who obtains legal recognition of paternity within six months of the child's birth is entitled to claim. In addition, the person concerned must fulfill one of the points listed:

• He is self-employed or employed

• He works in the wife's business and receives a cash salary in return

• He receives a daily allowance from an unemployment, social or private insurance company

Legal recognition of paternity exists:

• If a child relationship arises through marriage to the child's mother

• If there is an acknowledgment of paternity

• If paternity has been confirmed by a court decision

Fathers who adopt a child are not entitled to paternity leave or compensation. However, a corresponding benefit may be provided for in (collective) employment contracts, company regulations or cantonal law.

In order to be entitled to paternity leave or compensation, the following requirements must be met:

• The claimant must have been insured with the AHV for the nine months prior to the birth of their child

• The claimant must have been gainfully employed for at least five months during this period

The Federal Council will issue further provisions for cases in which the expectant father was unable to work for the required five of nine months prior to the birth due to incapacity for work or unemployment.

A special rule should also be noted: If the child is born before the end of the ninth month of pregnancy, the insurance period is reduced accordingly.

The services at a glance

1. Taking leave
   Paternity leave is defined as two weeks' leave taken by the eligible man. These two weeks do not have to be taken in one go, but can be taken flexibly on a daily or weekly basis. However, they must be taken within a period of six months after the birth of the child.

2. Daily allowances
   Paternity compensation refers to the payment of daily allowances during paternity leave. These daily allowances are not paid by the employer, but by the relevant compensation fund. A daily allowance amounts to 80% of the average gross salary before the birth of the child, up to a maximum of CHF 196 per day.

The claim expires:

• At the end of the six-month framework period

• After exhausting the daily allowances

• If paternity is denied

• With the death of the father or child

As already mentioned, salary compensation during paternity leave is basically in the hands of the relevant compensation funds. Nevertheless, companies must also play their part and determine how paternity compensation should be handled in specific cases.
The following three scenarios are conceivable:

1. The full salary is paid as normal. The employee takes their vacation days and continues to receive their full salary from their employer. In return, the relevant compensation fund pays the compensation directly to the employer.

2. Instead of the employee continuing to receive his normal (daily) salary for the days of leave taken, his employer pays him the salary corrected by the daily allowances. The employer in turn receives the daily allowances paid back from the relevant compensation fund at a ratio of 1:1.

3. The employer does not make any payments for the days of leave taken, but only pays the contractual salary minus the salary compensation for the days of leave taken. Consequently, the employee receives the corresponding paternity compensation or daily allowances directly from the compensation office.

A company should carefully weigh up which variant seems most suitable for integration into its own payroll system and determine a solution that suits its individual needs. Nevertheless, it should be noted that the implementation of variant 1 has some advantages from an administrative point of view. On the one hand, payroll accounting remains more manageable due to the normal continued payment of wages and is therefore easier to manage. Secondly, the employee only receives one salary statement, which makes tax declarations easier for the employee. For larger companies with many employees in particular, such lean payroll accounting can therefore be attractive despite any additional costs.

The competent compensation funds pay the leave compensation in the form of daily allowances either directly to the father concerned or to his employer, provided the latter continues to pay the salary during the leave.

If the entire two-week paternity leave is taken in one go, 14 daily allowances are paid once. However, if the days of leave are taken individually or on a daily basis, the payment of daily allowances is handled as follows: For every five days of leave taken, a payment of five daily allowances is made. The remaining two days are then paid out in a separate payment.

Paternity compensation is not paid automatically, but must be applied for at the relevant compensation office. The following is important: An application is only possible after all vacation days have been taken.

Taking paternity leave does not lead to a reduction in vacation or other previous entitlements. In the event of termination by the employer, the notice period is extended by the number of remaining paternity leave days.

To finance paternity leave, the EO contributions will be increased from 0.45 to 0.5 percent.