Switzerland's advanced free-market economy, driven primarily by the service sector and tourism, demands a precise and compliant approach for Employers of Record (EOR). Navigating diverse industries, especially tourism, requires adaptability to seasonal fluctuations. EORs must stay abreast of technological advancements, emphasizing the engagement of skilled professionals. Compliance with Swiss employment laws, tax regulations, and social security requirements is paramount for successful employer-employee relationships in this dynamic and highly developed economic landscape.

In Switzerland, misclassifying employees poses significant legal risks, potentially undermining legal protections. Choosing a PEO/EOR is a proactive measure to mitigate such risks, ensuring meticulous compliance, precise employee classification, and comprehensive benefits administration. By partnering with experts, businesses can confidently concentrate on core operations, knowing that employment responsibilities are efficiently managed in accordance with Swiss regulations, safeguarding both legal compliance and the welfare of their workforce.

When bringing a person from Switzerland into the workforce, it is essential for the employer to be well-versed in the country's employment regulations, as well as understanding the intricacies of benefits and deductions. This segment will address these crucial aspects of onboarding for individuals from Switzerland.

Employment contract

In accordance with Swiss legislation, having an employment contract, whether documented or not, is obligatory. The contract is required to include comprehensive information about the employer, along with specified terms and conditions. Furthermore, it is mandated that employment contracts in Switzerland be crafted in one of the country's four official languages: German, French, Italian, or Romansh. Essential information required by employment law encompasses :

• Company details: Name, registered office address, registration number, etc.
• Employee details: Date of birth, current address, nationality, job designation, etc.
• Start date of employment
• Nature of the employment
• Employee duties
• Duration of employment for determinate contracts
• Payroll cycle and monthly salary disbursement date
• Compensation structures
• Length of the probationary period, if applicable
• Leave details
• Notice period
• Applicable collective bargaining agreements

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Working time

Typical working weeks in Switzerland range from 40 to 44 hours, contingent upon the terms outlined in the relevant collective bargaining agreement. The calculation of working hours follows an annual basis, subject to meeting specific cumulative conditions.

Overtime

In Geneva, the contractual working hours are set at either 40 or 42 hours per week. Depending on the industry, the maximum allowable weekly working hours vary, with limits of either 45 or 50 hours.

Public Holidays

The country observes 8  public holidays employees can take as paid days off.

Minimum Wage

Switzerland lacks a nationwide minimum wage, but minimum wage standards can be determined through collective bargaining agreements or cantonal regulations. For instance, hourly wage levels set by cantons are as follows:

Geneva: 24 CHF

Basel City: 21 CHF

Neuchâtel: 20.08 CHF

Jura: 20 CHF

Ticino: 19 CHF

Winterthur: 23 CHF

Zurich: 23.90 CHF

Annual Leave

Workers aged 20 to 50 are entitled to four weeks of paid vacation, while those under 20 or over 50 receive five weeks of paid leave. The annual leave cycle corresponds to the calendar year. Employers have the discretion to establish policies regarding the carryover of unused vacation days, and any remaining days are compensated upon the termination of employment.

Paid Sick Leaves

Every employee is eligible for paid sick leave, determined by their continuous years of service. In the initial year of employment, the employee is entitled to a maximum of three weeks of paid sick leave. Alternatively, employers and employees may mutually choose a daily benefits insurance plan, wherein employees can receive up to 80% of their last salary for a maximum duration of 720 days, contingent upon providing a medical certificate from a doctor.

Maternity leaves

Employees eligible for maternity allowance must have contributed to the OASI for a minimum of 9 months before delivery and have a work history of at least five months. Both full-time and part-time mothers receive 80% of their wages as a daily allowance for 98 days, capped at SFr 196 per day. In Geneva, an additional two weeks are granted according to local law, extending the total maternity leave to 16 weeks. Submission of the birth certificate is a mandatory requirement.

Paternity leaves

In Switzerland, fathers are granted 10 days of paid paternity leave, while federal employees are eligible for an extended 4 weeks of paternity leave. This leave can be taken either on a weekly basis, including weekends, or as individual days. Similar to maternity leave, weekends are factored into the compensation, resulting in 14 daily allowances and a total of 10 days off. Paternity leave must be utilized within six months of the child's birth, and employees are required to furnish the birth certificate. The benefits during paternity leave are set at 80% of the employee's average salary before the baby's birth, with a cap of CHF 220 per day.

Tax and Social Security contribution:

Employer

Employee

Employee Income tax

In Switzerland, the principle of freedom of dismissal allows the termination of an employment contract without a significant reason, as long as the termination is neither discriminatory nor abusive. If requested, the party initiating the dismissal must provide a reason for it. While oral termination can be valid, it is recommended to document it in writing for evidentiary purposes.

Severance Pay

The employment contract or collective bargaining agreement outlines the terms of severance pay. Statutory severance payment is specifically relevant to employees aged 50 and above with a minimum of 20 years of service, and it is applicable only if there is a deficit in pension benefits. Given the infrequency of this condition, the statutory entitlement is uncommon. In such cases, the severance payment is calculated at a range between two to eight months' worth of pay.

Notice Period

A termination is deemed legally valid upon the recipient's receipt. Statutory notice periods are defined as follows: 7 days during the trial period, 1 month for the first year of service, 2 months for the second to ninth year of service, and 3 months from the tenth year of service. Alternatively, parties have the option to mutually agree upon a contractual notice period, which commences at the end of the calendar month. Garden leave can be implemented during this period. For fixed-term employment contracts, termination occurs upon the conclusion of the agreed-upon period.

Probation period

The trial period for permanent employees ranges from 1 to 3 months.

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Start Hiring in Switzerland Today

When expanding globally, ensuring compliance poses unique challenges. Employers must navigate employment laws, adhere to payroll protocols, uphold DE&I standards, comply with GDPR and data protection regulations, and more. While establishing local entities and commencing hiring can be daunting, staying abreast of a dynamic compliance landscape is even more demanding.

Gloroots streamlines this process, offering a centralized platform to manage these tasks effortlessly. Our in-house experts provide comprehensive protection against cross-border employment and payroll compliance risks. We assist in drafting employment contracts, ensuring timely payments, and delivering compliant benefits, allowing you to concentrate solely on talent screening.

Our commitment is to provide a seamless global employment experience, alleviating stress for you and your employees.

Connect with our experts today to launch your global recruitment initiative.

Elevate your team expansion in Switzerland with strategic hiring that aligns with your business goals. Streamline local employment complexities through Gloroots's global Employer of Record (EoR) service. Our experts handle compliance, payroll, tax, and benefits, allowing you to focus on fostering your team and propelling company growth in the dynamic Swiss market.