First employee: accident insurance, sickness allowance and sick pay

What changes with your first employee

As long as you work alone, you decide yourself how to insure yourself. With your first employee, you become an employer, and the law requires several types of insurance. This applies regardless of whether you run a sole proprietorship or a limited liability company (GmbH). Some obligations depend on the workload and the salary, others apply from the first franc.

Basic health insurance under the Federal Health Insurance Act (KVG) remains each employee’s own responsibility. You neither have to take it out nor pay for it. If the person works for you at least 8 hours per week, however, they can suspend the accident cover with their health insurer, because they are fully covered by your UVG insurance (Art. 8 para. 1 KVG).

Step by step: insuring your first employee

1. Register as an employer with the compensation office. It sets provisional contributions based on the expected total salary. After the end of the year, you report the actual salaries (OASI leaflet 2.01). The compensation office also charges an administrative cost contribution at your expense.
2. Determine the UVG insurer. If your business belongs to a Suva sector, such as construction, installation, forestry or mechanical wood and metal processing, your employees are insured with Suva by law (Art. 66 para. 1 UVG). You report the opening of the business to Suva within 14 days (Art. 59 para. 1 UVG). Otherwise, you conclude a contract with a registered insurer; your employees have a right to be consulted on the choice (Art. 69 UVG).
3. Choose a pension fund. If the person earns more than CHF 22,680 per year with you, you must join a registered pension institution (Art. 2 para. 1 and Art. 11 para. 1 BVG). Affiliation takes effect retroactively; the compensation office checks it (Art. 11 para. 3 and 4 BVG).
4. Arrange continued payment of salary during illness. Decide whether you bear the risk yourself or take out collective daily sickness allowance insurance. Record the solution in writing in the employment contract.
5. Inform your employees. If you take out collective personal insurance, you must inform your employees about its essential content, changes and termination (Art. 3 para. 3 ICA). Also tell them that they can suspend the accident cover with their health insurer.
6. Set up payroll. The employee’s share of OASI, DI, IC and unemployment insurance, the premium for non-work-related accidents, the share of the pension fund and, if agreed, the share of daily sickness allowance insurance are deducted. You may only deduct the non-work-related accident share from the salary of the same or the next pay period (Art. 91 para. 3 UVG).

Continued payment of salary: what you owe in case of illness

Continued payment of salary is governed by Art. 324a of the Code of Obligations (OR). If your employee is prevented from working through no fault of their own, for example due to illness or an accident, you owe them their salary for a limited period. This applies if the employment relationship has lasted more than three months or was entered into for more than three months (Art. 324a para. 1 OR). The same applies to pregnancy (Art. 324a para. 3 OR).

The law only says how long for the first year of service: three weeks. After that, you owe the salary for an “appropriately longer period”, depending on the length of the employment relationship and the circumstances (Art. 324a para. 2 OR). For practice, SECO’s SME portal refers to the Zurich, Basel and Bern scales, which courts apply depending on the region. The article Continued payment of salary during illness explains how these scales are structured.

For accidents, the situation is different. Because your employees are insured on a compulsory basis under the UVG, you do not have to pay any salary as soon as the UVG daily allowance covers at least 80 % of the salary (Art. 324b para. 1 OR). The daily allowance starts on the third day after the day of the accident; for the days before, you owe at least 80 % of the salary (Art. 324b para. 3 OR).

Collective daily sickness allowance: voluntary replacement for continued payment of salary

With a collective insurance for daily sickness allowance, you insure all employees together. Under the KVG, employers may take out collective insurance for themselves and their employees (Art. 67 para. 3 let. a KVG); as the owner, you can therefore be insured as well. In addition, health insurers and insurance companies offer collective contracts under the Insurance Contract Act (ICA).

The insurance can replace your obligation under Art. 324a OR. Condition: the deviation is agreed in writing, for example in the employment contract, and is at least equivalent for the employee (Art. 324a para. 4 OR). A solution that pays somewhat less than the full salary but for much longer can be equivalent. For KVG contracts:

• Benefit and duration: daily allowance from at least 50 % incapacity for work, for at least 720 days within 900 days (Art. 72 para. 2 and 3 KVG).
• Waiting period: if you continue to pay the salary during an agreed waiting period, the minimum benefit period may be shorter by that period (Art. 72 para. 2 KVG).
• Premium: in collective insurance, the insurer may charge premiums that differ from individual insurance; they must cover the costs of the collective (Art. 77 KVG).
• Leaving: if someone leaves the company, the person may transfer to the insurer’s individual insurance without new reservations; the deadline is three months from the written notification (Art. 71 KVG).

For ICA contracts, the general terms and conditions govern the waiting period, duration, amount and transfer; the general terms and conditions and the insurer’s information are decisive. In collective daily allowance insurance, both sides may give ordinary notice, including the insurer (Art. 35a para. 4 ICA). If you change contracts, make sure the transition is seamless so that ongoing cases and new hires remain covered.

Sample calculation: Lea hires Tim

Example with fictitious people. Lea is 38 and runs a graphic design studio in Zurich as a sole proprietorship. From 01.02.2026, she employs Tim, 29, full-time, with a monthly salary of CHF 5,000, paid 13 times (CHF 65,000 per year). In November 2026, still in his first year of service, Tim is fully unable to work for 42 days due to illness.

In the first year of service, the 30-day waiting period costs Lea more in this case than the statutory three weeks. In return, Tim is covered for up to 720 days in the event of a longer illness, and Lea’s risk is limited from the 31st day. How long the waiting period should be is a trade-off between premium and own risk; the quote is decisive for the premium.

Special cases

Part-time under 8 hours per week

If someone works for you less than 8 hours per week, they are only insured against work-related accidents; accidents on the way to work count as work-related accidents (Art. 13 UVV). For their free time, the person must keep the accident cover with their health insurer.

Short employment

If an employment relationship is limited to a maximum of three months and has not lasted longer, there is no obligation to continue paying salary under Art. 324a para. 1 OR. You must still insure this person against accidents from the first day (Art. 1a UVG).

Apprentices and interns

Apprentices, interns and volunteers are insured on a compulsory basis under the UVG like all other employees (Art. 1a para. 1 let. a UVG).

Yourself

As the owner of a sole proprietorship, you remain self-employed. You can take out voluntary cover with your UVG insurer (Art. 135 para. 1 UVV) and have yourself included in the collective daily allowance insurance (Art. 67 para. 3 KVG). The article Accident insurance for the self-employed shows how voluntary accident insurance works. If you set up a limited liability company (GmbH) or a corporation (AG) and work there, you are yourself an employee of your company.

Common mistakes

• Only taking out UVG insurance after the first accident. The substitute fund then pays, but claims the substitute premiums from you (Art. 73 para. 1 UVG).
• Not regulating continued payment of salary in the contract. Without a written agreement, Art. 324a OR applies, and daily allowance insurance does not automatically release you.
• Choosing a daily allowance solution that is not equivalent. A deviating arrangement only applies if it is at least equivalent for the employees (Art. 324a para. 4 OR); otherwise the statutory continued payment of salary remains.
• Forgetting the pension fund. The compensation office asks you to join one and otherwise reports you retroactively to the substitute pension institution (Art. 11 para. 5 and 6 BVG).
• Not informing employees. Anyone who does not know they are insured under the UVG keeps paying for accident cover with their health insurer.

You will find all articles for the self-employed and SMEs in the Self-employed and SMEs section. The premium calculator shows what your employees pay for basic health insurance. The deadlines for switching health insurer are listed under Deadlines. If you need help with quotes for accident and daily sickness allowance insurance, you can request advice.