Facts
The married couple F. were ordered by the Cantonal Court of Nidwalden to pay their former employee S. a compensation of CHF 10,000 due to abusive dismissal. The AHV compensation fund then demanded that F. pay social security contributions on this payment. However, the Administrative Court of the Canton of Nidwalden overturned the fund's decision, as the compensation under Art. 336a CO does not constitute relevant salary within the meaning of the AHV legislation.
The Federal Social Insurance Office then filed an administrative court appeal against the cantonal court decision.
Considerations
The Federal Insurance Court ruled that the "compensations" regulated in Art. 336a and 337c para. 3 CO do not fall under the relevant salary within the meaning of Art. 5 para. 2 AHVA. These compensations serve as punishment, prevention and possibly satisfaction, but not as remuneration for work performed or loss of salary. Therefore, there is no legal or economic connection to remuneration that would justify a contribution…