As promised, the Council of State provided an update this Friday morning on measures to support the economy and employment. In particular, the government approved the creation of a new cantonal support measure for businesses whose operations have been temporarily suspended due to public health decisions made at the cantonal level.
The Council of State urges the public and businesses to strictly adhere to the precautionary measures in order to ease the strain on the healthcare system and enable the resumption of suspended activities as soon as possible.
Faced with the alarming spread of the pandemic, the Council of State has been forced to implement strict public health measures in recent weeks, which are impacting social life and economic activity. Certain sectors have been shut down in an effort to curb the spread of the virus. Many businesses that were already weakened during the partial lockdown in the spring are now at risk due to the new restrictions, while others are facing difficulties because some of their staff are unavailable due to isolation or quarantine. In this context, government aid plays an essential role in preserving businesses and jobs.
Reduced Work Hours (RWH, Short-Time Work)
Short-time work (RHT) is available to companies experiencing the direct and indirect consequences of the economic crisis and public health measures, under the conditions set by the federal government. It allows companies to retain skills and jobs while reducing working hours. To date, some 1,300 companies representing approximately 20,000 jobs have been granted authorization, across a wide range of industries. To minimize the impact of the notice period, it is important that affected companies submit their applications to the cantonal employment office without delay. The State Council has requested that the eligibility criteria for RHT be further relaxed, specifically by requiring that the wages of apprentices be covered in companies undergoing a temporary closure. If, contrary to expectations, the federal government were to decline to address this issue, the State Council would consider implementing a cantonal solution.
COVID-19 Loss of Earnings Benefits (APG)
Under federal law, compensation for loss of earnings (APG) is available to self-employed individuals whose businesses have been closed by official order or who are affected by the ban on events, as well as to those who must significantly reduce their gainful activity due to public health measures (a loss of revenue of at least 55%). In addition, the Federal Council amended the ordinance on November 4, 2020, to extend eligibility for APG to salaried executives of their own companies who are not eligible for short-time work benefits (RHT) when their company must suspend operations due to public health measures. Finally, APG remains available to individuals who experience a loss of wages or income due to quarantine or childcare responsibilities. Applications for APG must be submitted to the applicant’s own AHV compensation fund.
New Cantonal Aid for Closed Businesses
The Council of State has approved the creation of a new cantonal support program for businesses whose primary activity is temporarily prohibited by the public health measures adopted by the canton. This applies in particular to restaurants, bars, nightclubs, fitness centers, and entertainment and cultural venues. Within this scope, businesses utilizing the short-time work program (RHT) will receive, starting in November, a supplement equivalent to 10% of the compensation they receive under the RHT program, until the cantonal authority lifts the ban on operations. This cantonal support, which supplements federal measures, is intended to cover the monthly waiting period applicable under the RHT program, as well as to help cover the fixed costs associated with each job. The mechanism adopted also serves as a direct and concrete incentive to maintain employment contracts throughout the entire period of the mandated closure. In light of the public health measures currently in effect, the cost of this new non-repayable aid is estimated at nearly 1 million francs for the month of November. Future cost trends will depend on the public health measures implemented. Funding is provided through the employment service’s budget as an exceptional measure to assist employers.
Second Package of Measures to Support the Cultural Sector
To support Neuchâtel’s arts and culture sector, a second package of aid measures—scheduled to run through the end of 2021 and co-financed by the Confederation, the Canton, and the LoRo—has been established, with a total budget of 6.4 million francs. The canton’s share of this funding is the subject of an amendment by the State Council to the 2021 budget proposal. Implementation is currently underway by the Department of Culture, and applications are expected to be accepted starting in late November. Cultural organizations will be eligible for compensation in addition to short-time work benefits (RHT) for events canceled due to the pandemic and government measures taken to contain it. In addition, to help the arts and culture sector adapt to the radical changes brought about by the pandemic, grants will be awarded to support transformation projects. Finally, self-employed individuals whose work is primarily in the cultural sector may—in addition to APG benefits—apply for emergency aid from Suisseculture sociale.
Flat-Rate Deduction from Fees Charged by Public Institutions
The hospitality and restaurant industry has been severely impacted by the pandemic. To provide additional support to this sector, the Council of State has authorized the Department of Consumer Affairs and Veterinary Services to apply a flat-rate reduction to the revenue-based fee for public establishments, in the amount of 2,000 francs per establishment. Consequently, establishments subject to a fee below this amount will not receive a bill, while those with a higher fee will receive a reduction. Since the revenue from these fees is allocated to Tourisme Neuchâtel and to training in the sector, the state will cover the difference, amounting to just over 600,000 francs.
Other measures are still under consideration
The State Council has tasked the Department of Economic Affairs with preparing the implementation of a support mechanism for “cases of hardship” in accordance with the ordinance that the Federal Council plans to adopt on December 1. Based on the documents submitted by the federal government to the cantons for consultation, this mechanism could be allocated approximately 9 million francs, with funding to be shared equally between the federal government and the canton. In addition, several sector-specific measures are still under consideration to supplement the existing range of support tools, particularly in the areas of culture and the local economy.