ALV reform: When entrepreneurs pay contributions but come away empty-handed
On June 1, 2026, the National Council will vote on parliamentary initiative 20.406 - and could thus correct a decades-old flaw in the unemployment insurance system. This was triggered by the case of François Cochard, whose personal fate is a prime example of how the current system lets down SME owners. The change in the law affects around one million employees in Switzerland.
After years of political and legal wrangling, the Swiss parliament is on the verge of correcting a fundamental flaw in the unemployment insurance system on June 1, 2026: In future, entrepreneurs who pay compulsory unemployment insurance contributions should also be entitled to benefits under clearly defined conditions. The issue affects an estimated one million employees in Switzerland - including not only people in an employer-like position, but also their spouses who work for them.
A case that exposed a system
This reform debate originated with the case of François Cochard. As the main shareholder and managing director of the concert event organization Divus Modus, he lost his job in 2010 after the fire police of the canton of St. Gallen banned the «Eine Nacht im Bergwerk» festival at short notice - six weeks before it was due to take place. The decision was made in a panic reaction to the Love Parade disaster in Duisburg, although, as it later turned out, the cause of the accident in the Hagerbach Test Gallery could not have occurred.
Cochard had previously coordinated all safety measures with the fire department, ambulance service and police. Nevertheless, he not only lost his job at Divus Modus as a result of the state-ordered ban on events, but also his job at Starticket shortly afterwards. As a young family man, he found himself without an income and without entitlement to unemployment insurance benefits - the insurance company refused to support him, citing possible intent to abuse his previous employer-like position.
Federal Court confirms the dilemma
Although Cochard subsequently sold all company shares and gave up his management position, the Office of Economy and Labor of the Canton of Zurich maintained the exclusion of benefits. In 2012, the Federal Supreme Court confirmed in its ruling 8C_143/2012 that personal contacts could represent a theoretical potential for abuse even after a complete departure from a company. An argument that applies to practically every SME.
The conclusion was absurd: in order to receive benefits, Cochard would have had to let Divus Modus go bankrupt - which would have meant the loss of more jobs. Because he tried to protect other jobs instead, he was punished with expulsion.
Political solution: a long march through the courts
The Cochard case led to a political process that lasted for years. An initial motion by GLP National Councillor Thomas Meier (14.4195, submitted on December 11, 2014) was written off by the Federal Council without being dealt with. The same happened in 2017 with motion 17.3580 by GLP National Councillor Jürg Grossen. A third motion from 2018 - also by Grossen, this time on the situation of assisting spouses (18.3662) - failed in the same way.
It was only when FDP National Councillor Andri Silberschmidt was elected on March 12, 2020 that the Parliamentary initiative 20.406 Parliament took matters into its own hands. Four days later, the Federal Council declared the first coronavirus lockdown - and suddenly made it clear how urgently the loophole in the law needed to be closed: thousands of entrepreneurs were suddenly faced with the same problem as Cochard a decade earlier.
Parliamentary majority in favor of the reform
On June 13, 2024, the National Council adopted a proposal to amend the law based entirely on François Cochard's draft. The Council of States referred the matter to its committee for further examination on September 16, 2024. Extensive clarifications subsequently confirmed the scope of the issue. The bankruptcy offices also spoke out in favor of the reform, as it creates a better framework for the orderly liquidation of companies.
On March 3, 2026, the Council of States approved the revised proposal of its committee. The Social and Health Committee of the National Council (SGK-N) also approved the proposal on May 7, 2026. The National Council will now hold a final vote on the proposal on June 1, 2026.
What should change in the future
The planned legislative solution creates legally clear and practicable conditions for employer-like persons for the first time. In future, they will have access to unemployment insurance under certain conditions - for example, if the company is in liquidation or no longer has a controlling position. The OFKS (Organization for Fair Social Insurance for SMEs), which accompanied the debate with legal analyses and political networking, sees this as an important economic and regulatory step.
François Cochard comments: «It is unacceptable for entrepreneurs to have to pay compulsory contributions for years and still not receive insurance cover at the crucial moment. It is precisely this problem that is now finally being corrected. Parliament is also sending an important signal to SMEs and the self-employed in Switzerland.»
For the OFKS, the bill goes beyond a socio-political adjustment: it is a signal in favor of fairness, entrepreneurship and economic common sense. SMEs account for a significant proportion of value creation and jobs in Switzerland - those who pay insurance contributions should not be systematically excluded in the event of an emergency.
Further information on the parliamentary initiative and the associated analyses and expert opinions can be found on the parliament's website: https://www.parlament.ch/de/ratsbetrieb/suche-curia-vista/geschaeft?AffairId=20200406
