Employment Laws in Switzerland

Contractual Agreements

While there is no standardized format for work contracts, most written agreements, including contract employment law in Switzerland for freelancers, outline the rights and duties of both employer and employee. 

Furthermore, signing a separate Data Processing Agreement alongside employment contracts may avoid legal disputes arising due to an alleged breach of employee privacy. 

Types of employment contracts in Switzerland

• Individual employment contract: This is a personalized agreement directly signed by both parties.

• Collective employment agreement: Negotiated between workers/unions and one or more employers/associations, setting minimum working conditions for a specific sector. These are legally binding agreements and may vary by region or company.

You can put new employees on probation for up to three months. 

Obligations and rights for both parties

• Negotiate working hours following adequate time for employee needs.
• Withhold and remit taxes and social security deductions from employees’ gross salary.
• You have a legal obligation under Swiss labor law to record your employees’ working hours and document them for up to five years. 
• Protect employee data, avoid unwarranted surveillance, and comply with data protection laws.

Working Hours and Overtime

The Switzerland labor law classifies working time as follows:

• Daytime: Work between 6 am and 8 pm 
• Evening: Work runs from 8 pm to 11 pm
• Night: Maximum of nine hours between 8 pm to 6 am 

You may go through the prescribed regulations to set a suitable working time within the statutory requirements:

Regular working hoursul

Overtime regulations

• The labor law in Switzerland permits overtime work, not more than two hours per day or 170 hours per year (45 hours per week) or 140 hours (50 per week) per year.

• The employment laws in Switzerland enforce a wage supplement of at least 25% of the regular hourly wage for overtime and night work. 
• You may refuse overtime compensation to manager-level employees and partially for office staff (up to the first 60 hours of overtime).

Minimum Wage and Compensation

The minimum wage rate in 2024

The employment laws in Switzerland have not set any national minimum wage standard. Nonetheless, Swiss wages are high compared to global standards. 

Several Swiss cantons have recently implemented their minimum wage regulations:

• Neuchâtel: CHF 21.09 per hour 
• Jura: CHF 20.60 per hour 
• Ticino: Varies between CHF 19 and 19.50 per hour, depending on the industry
• Geneva: CHF 24.32 per hour 
• Basel-Stadt: CHF 21 per hour (applicable only in specific sectors)

Factors Affecting Wage Determination

Various factors influence how wages are determined:

• Education and qualifications, work experience, and performance. 
• Type of industry and sector, company size and profitability, location, collective bargaining agreements. 
• Cantonal minimum wages, Gender Equality Act enforcing equal pay. 

You can use a national wage calculator to determine the average salary paid to employees in a particular profession.

Employee Benefits and Social Security

The employment laws in Switzerland necessitate you to extend the following statutory employee benefits and social security provisions: 

Statutory benefits

• Employees are entitled to get paid paternity maternity leave. You must ensure mandatory insurance coverage under the OASI Act. 
• Three weeks’ employee salary during illness or sick days; otherwise, enroll in a daily health insurance scheme. 
• Regular rest breaks during working hours, time off at weekends, prohibition of night and Sunday working. 

Additional perks and benefits

Social Security contributions and requirements

The labor laws of Switzerland present you with many obligations regarding employee old age, death, and disability through three pillars. 

• Pillar 1: Old age, survivors, and disability insurance.
• Pillar 2: Occupational benefits insurance.
• Pilar 3: Occupational pension scheme

While all three are important, pillars 1 and 2 directly impact your HR compliance.

Vacations and Paid Time Off

The employment laws in Switzerland require you to extend the following paid and unpaid leave entitlements: 

Annual leave entitlement

• At least four weeks of paid vacation leave annually.
• Five weeks of paid vacation leave for employees up to the age of 20.  
• You may offer additional paid annual leave if negotiated per the employment law in Switzerland. 

Public holidays and special leaves

Public holidays:

• Swiss National Day, which falls on the first of August, is the only nationwide public holiday. 
• You must observe up to eight public holidays per year based on your Canton. 

Maternity leave:

• The labor laws of Switzerland prescribe 14 weeks of paid maternity leave and two weeks of paid paternity leave (during the first six months). 
• You must entertain the request for two weeks of paid leave within the year following the adoption of the child. 

Compassionate leave:

• The labor laws of Switzerland mandate you to extend up to three days of leave (per event) to take care of a sick spouse or dependent family member. 

Childcare leave:

• You may extend the childcare leave to 14 weeks in case of illness or accident.   

Additional leave:

Termination and Severance

The labor laws of Switzerland operate under the principle of freedom of termination. Typically, it allows you to end an employment relationship at any time without stating a reason. 

However, the employment laws in Switzerland on termination prevent abusive dismissal showcasing employee discrimination, retaliation for exercising employee rights, termination during protecting periods, or in bad faith.  

In particular, the Switzerland labor law restricts you from dismissing pregnant employees during maternity leave or any other employee on statutory leave. 

Notice period and severance pay

• The labor law in Switzerland requires you to observe a notice period before ending the employment relationship. 

• You may adjust the notice period per the following: 

• Switzerland labor law does not oblige you to extend severance pay upon termination of employment. 
• You must implement a social plan for mass dismissal, and it could include severance payments. 

Discrimination and Equal Opportunity

The labor laws of Switzerland on discrimination and equal opportunity mainly focus on preventing violations regarding employees’ right to personality. 

Prohibitions against workplace discrimination

• Refrain from discriminating against employees based on age, race, gender, nationality, religion, political beliefs, disability, sexual orientation, language, or social origin.
• Adhere to gender equality principles in compensation, promotions, and other areas.
• Take all preventive measures to avoid harassment of any kind at the workplace. 

You can partner with Employer-Of-Record (EOR) solutions and remain payroll & HR-compliant per the employment laws in Switzerland.

Health and Safety Regulations

The employment laws in Switzerland emphasize a zero-tolerance approach towards protecting your employees from physical, sexual, and psychological harassment at work. 

• Start with a mandatory insurance scheme for your employees against the consequences of an accident.
• Ensure fair working hours, proper workplace hygiene, safe workplace building standards, and employee data privacy.

Stay Compliant With Skuad

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We can draft compliant contracts and streamline the onboarding process based on local laws and regulations. Our local compliant payroll systems ensure accurate and timely salary payments, social security deductions, and tax filings.

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FAQs

Q1. What are the rights of employees in Switzerland?

A1. The employment laws in Switzerland protect employees in key areas like working hours, paid leave, safety, and social security contributions. Employees also benefit from robust protections against discrimination, transparent communication, and fair termination procedures. 

‍Q2. What is the legal working time in Switzerland?

A2. Swiss labor law sets a standard maximum working week of 45 hours, with exceptions. Further, the laws mandate a maximum daily working time of 14 hours, including overtime and rest breaks. Work at night and on Sundays is usually prohibited. 

Q3. Is 13th month pay mandatory in Switzerland?

A3. There is no national law mandating you to extend 13th-month pay in Switzerland. 

Q4. What are the termination laws in Switzerland?

A4. While you enjoy some flexibility in terminating employment in Switzerland, you must usually provide up to three months' notice periods. There are no mandatory severance pay requirements as individual contracts or agreements often cover it. Further, employees are protected from discriminatory dismissals.