No blanket assessment of lunch catering as in-kind income in the absence of employee satiation

Facts

The Compensation Fund of the Canton of Zurich (appellant) demanded from the [A. GmbH] (respondent), an operator of day-care centres and day schools, additional wage contributions totalling CHF 77,885.20 (including administrative costs) as well as default interest of CHF 12,627.75 for the years 2015 to 2017. The claim was based on an employer inspection dated 18 April 2018, following which the Compensation Fund ordered the company to pay the additional contributions. The company lodged an objection against the orders, which the Compensation Fund rejected with an objection decision dated 24 September 2021.

The [A. GmbH] then filed an appeal with the Social Insurance Court of the Canton of Zurich, which allowed the appeal with a judgment dated 20 February 2023 and quashed the objection decision of the Compensation Fund without replacement. The Compensation Fund then filed an appeal in public law matters with the Federal Supreme Court and requested that the cantonal judgment be set aside and its objection decision be confirmed.

The dispute concerned the question of whether the lunch catering provided by the [A. GmbH] to its employees was to be qualified as assessable in-kind income. The Compensation Fund argued that, pursuant to Art. 11 para. 2 OASIO, a flat-rate amount of CHF 10.– was to be added to the assessable wage for each lunch financed by the employer. The company, however, contended that the lunch catering was not intended to satiate the employees but served educational purposes (shared meals with the children) and that the employees regularly provided for themselves in addition.

Considerations

The Federal Supreme Court first examined the admissibility of the appeal and recalled that it applies the law ex officio (Art. 106 para. 1 FSCA) and generally only reviews the objections raised, unless there are obvious violations of the law (Art. 42 para. 1 and 2 FSCA). The findings of fact by the lower court are generally binding on the Federal Supreme Court, unless they are obviously incorrect or based on a violation of the law (Art. 105 para. 2 FSCA).

In the present case, the only issue to be examined was whether the cantonal court violated federal law by not qualifying the employees’ lunch catering as assessable in-kind income. Pursuant to Art. 5 para. 2 OASIA, the assessable wage includes any remuneration for work performed, including in-kind benefits. Art. 7 lit. f OASIO provides that regular in-kind benefits, in particular food and accommodation, form part of the assessable wage. Art. 11 OASIO governs the valuation of such in-kind benefits, providing for a flat-rate amount of CHF 10.– for a lunch.

The Federal Supreme Court clarified that the flat-rate valuation pursuant to Art. 11 para. 2…