Global HR compliance in Switzerland: employment law, hiring and termination

Employing staff in Switzerland requires compliance with the Swiss Code of Obligations, the Federal Employment Act, applicable collective labour agreements and cantonal employment requirements. Employers must account for contractual working conditions, mandatory social insurance, employee leave, dismissal protections and restrictions on certain employment arrangements.

Switzerland’s employment framework gives employers considerable contractual flexibility, but that flexibility has limits. Notice periods, salary continuation during illness, protected dismissal periods, working-time restrictions and mandatory employee entitlements can create substantial obligations.

For international companies, the requirements become more complex when hiring employees in different cantons, engaging foreign nationals or employing personnel through third-party arrangements.

Acumen International supports international companies employing professionals in Switzerland, coordinating employment contracts, payroll, statutory benefits and ongoing HR administration through legally appropriate Global Employer of Record services.

Employment law in Switzerland: the legal framework

Swiss employment relationships are governed principally by the following legislation:

• Swiss Code of Obligations (CO): Employment contracts, salary obligations, leave, termination, notice periods and employee protections.
• Federal Employment Act (ArG/LTr): Working hours, rest periods, night work, Sunday work and workplace health protections.
• Federal Act on Gender Equality: Protection against discrimination on grounds of sex in employment.
• Federal Act on Employment Services and the Hiring of Services (AVG/LSE): Regulation of private employment agencies and staff leasing.
• Federal social insurance legislation: Mandatory pension, accident insurance and other social security obligations.

Collective labour agreements (CLAs) and standard employment contracts can establish additional or more favourable employment conditions.

Cantonal legislation also affects public holidays, minimum wages in certain locations and aspects of employment administration.

International employers must identify which federal, cantonal and sector-specific requirements apply to each employee.

Employment contracts in Switzerland

Swiss employment contracts may generally be concluded orally or in writing, although particular contractual terms and arrangements require written form.

For indefinite employment relationships or those lasting longer than one month, employers must provide specified written information within one month of commencement.

This includes the parties’ names, employment commencement date, employee’s function, salary and any agreed weekly working hours.

A comprehensive employment contract should address:

• Job title and responsibilities.
• Commencement date and employment duration.
• Gross salary and payment frequency.
• Workplace and working hours.
• Probationary period.
• Annual leave and public holidays.
• Pension and insurance arrangements.
• Confidentiality and intellectual property.
• Notice periods and termination provisions.
• Applicable collective labour agreements.

Employment terms cannot override mandatory statutory protections.

Permanent and fixed-term employment contracts

An indefinite employment contract continues until terminated in accordance with the applicable notice and dismissal requirements.

A fixed-term contract generally ends automatically on the agreed expiry date, without ordinary notice, unless the parties have agreed otherwise.

Swiss law does not impose a universal maximum duration on fixed-term employment contracts.

However, successive fixed-term contracts used without a legitimate objective reason may be treated as an attempt to circumvent employee protections.

In such circumstances, the relationship may be assessed as indefinite employment.

Collective labour agreements and standard employment contracts

Collective labour agreements may establish requirements concerning remuneration, working hours, overtime, holidays, salary continuation and termination.

Some agreements have been declared generally binding and apply to employers and employees within their defined scope.

Standard employment contracts may also establish mandatory minimum conditions in particular sectors or cantons.

Employers must check whether the employee’s occupation and work location fall within an applicable agreement before finalising employment terms.

Probationary periods in Switzerland

For indefinite employment contracts, the first month is generally treated as the probationary period unless the parties agree otherwise.

The probationary period may be extended by written agreement to a maximum of three months, subject to the applicable rules.

Where probation is interrupted by illness, accident or fulfilment of a compulsory legal obligation, the probationary period may be extended by the corresponding absence.

During probation, either party may generally terminate the employment relationship with seven calendar days’ notice.

The statutory protection against termination during certain periods of illness, accident and other circumstances generally applies after probation rather than during it.

Employers should document the agreed probationary arrangements and any applicable contractual variations.

Working hours and rest periods in Switzerland

Swiss working-time legislation distinguishes between contractual working hours and statutory maximum working hours.

Many employment contracts provide for a normal working week of approximately 40–44 hours, although this varies by industry and employer.

The Federal Employment Act establishes the following general maximum limits:

Some senior management and other categories may fall outside particular provisions of the Employment Act.

Daily rest and breaks

Employees covered by the Employment Act generally must receive at least 11 consecutive hours of daily rest, subject to statutory exceptions.

Mandatory breaks depend on the length of the working day:

Breaks generally do not count as working time where employees are free to leave their workplace.

Night and Sunday work

Night work and Sunday work are generally restricted and may require authorisation or fall within a statutory exemption.

Additional compensation or compensatory rest may apply.

International companies must assess these requirements when employing staff in manufacturing, healthcare, logistics, hospitality and other operations requiring extended working hours.

Overtime and additional working hours

Swiss law distinguishes between contractual overtime and work exceeding statutory maximum working hours.

Contractual overtime arises when an employee works beyond the hours agreed in the employment contract but remains within the applicable statutory maximum.

Under Article 321c of the Code of Obligations, qualifying overtime generally attracts a 25% salary supplement unless a legally permitted contractual arrangement provides otherwise.

With the employee’s consent, overtime may be compensated through time off of at least equivalent duration.

Statutory overtime, sometimes described as excess working hours, occurs when an employee exceeds the applicable maximum weekly hours under the Employment Act.

This is subject to separate restrictions, limits and compensation rules.

Employers should not assume that a contractual waiver of overtime compensation also removes obligations arising under the Employment Act.

Working-time records

Employers generally must record working hours, breaks and rest periods.

Simplified recording arrangements or exemptions may apply to certain employees where the statutory conditions are satisfied.

Working-time records must generally be retained for five years.

These requirements can also apply to employees working remotely from Switzerland.

Minimum wage requirements in Switzerland

Switzerland does not have a nationwide statutory minimum wage.

However, several cantons have introduced minimum wage legislation, and certain municipalities have their own requirements.

Minimum remuneration may also be established through generally binding collective labour agreements or standard employment contracts.

The applicable rate depends on the employee’s work location, occupation and industry.

For example, a salary that satisfies the applicable requirements in one canton may not meet those in another.

Employers should check the relevant cantonal and sectoral requirements before agreeing remuneration, particularly for lower-paid roles and employees covered by collective agreements.

Annual leave and public holidays in Switzerland

Swiss employees have statutory paid annual leave entitlements under Article 329a of the Code of Obligations.

Employment contracts and collective labour agreements may provide more generous entitlements.

Annual leave is generally intended to be taken as time away from work rather than replaced with a cash payment during ongoing employment.

At least two weeks of annual leave must generally be taken consecutively.

Payment in lieu of outstanding leave may be appropriate when employment ends and the remaining entitlement cannot be taken.

Public holidays

Switzerland’s public holidays vary by canton.

Swiss National Day on 1 August is the federal public holiday.

Cantons may designate additional public holidays equivalent to Sundays under the applicable legislation.

The employer must establish the employee’s entitlement according to the work location, remuneration arrangements and relevant legal requirements.

Our article on statutory leave and holiday accruals examines the wider issues affecting international employers.

Sick leave and salary continuation in Switzerland

Swiss employers have obligations to continue paying salary during qualifying employee illness or accident.

Under Article 324a of the Code of Obligations, an employee who is unable to work through no fault of their own may be entitled to salary continuation, provided the statutory conditions are satisfied.

The obligation generally applies where the employment relationship has lasted more than three months or was concluded for more than three months.

Duration of salary continuation

During the first year of service, the statutory minimum salary continuation obligation is generally three weeks.

For longer service, the period increases according to applicable judicial scales or other legally valid arrangements.

Different regional judicial scales are used in practice, including the Bern, Basel and Zurich scales.

There is therefore no single nationwide salary continuation table covering every employee and year of service.

Daily sickness allowance insurance

Many employers maintain daily sickness allowance insurance to cover part of the salary continuation risk.

Such arrangements commonly provide a percentage of insured salary for a specified period, subject to policy conditions.

Where insurance arrangements replace statutory salary continuation, they must satisfy the applicable legal requirements concerning equivalent protection.

Employers must also distinguish illness-related salary continuation from mandatory accident insurance benefits.

Maternity, leave for the other parent and family-related entitlements

Swiss employment law provides several statutory family-related leave entitlements.

Maternity leave

Qualifying employees are generally entitled to 14 weeks of maternity leave following childbirth.

Statutory maternity compensation is generally 80% of average previous earnings, subject to the applicable daily ceiling and eligibility requirements.

Employees are prohibited from working during the first eight weeks after childbirth.

Additional contractual or cantonal entitlements may apply.

Leave for the other parent

Qualifying employees are generally entitled to two weeks of leave for the other parent, which can be taken within the applicable statutory period following childbirth.

The corresponding income compensation is generally based on 80% of average previous earnings, subject to the statutory ceiling.

Adoption and care leave

Eligible adoptive parents may qualify for two weeks of adoption leave.

Employees caring for a child whose health is seriously impaired by illness or accident may qualify for up to 14 weeks of leave under the relevant statutory conditions.

Employers must coordinate leave administration, income compensation claims and applicable payroll arrangements.

Employee benefits and mandatory insurance

Swiss employment arrangements involve several mandatory social insurance and pension obligations.

Employers generally must administer:

• AHV – old-age and survivors’ insurance.
• IV – disability insurance.
• EO – income compensation.
• ALV – unemployment insurance.
• BVG/LPP – occupational pensions for eligible employees.
• Mandatory accident insurance.
• Applicable family allowance contributions.

The standard employee and employer contributions for AHV, IV and EO total 5.30% each.

Unemployment insurance adds 1.10% for each party on qualifying earnings up to CHF 148,200 annually.

Occupational pension contributions depend on the employee’s age, insured salary and pension plan.

Employers must finance at least half of the aggregate contributions required under the applicable occupational pension arrangement.

Supplementary employee benefits

Employers may also offer benefits such as supplementary health insurance, enhanced pension contributions, additional paid leave, professional development allowances and performance-related remuneration.

The tax and social insurance treatment depends on the benefit.

Our Global payroll and Employer of Record services cover the administration of applicable statutory contributions and agreed employee benefits.

Employment termination in Switzerland

Swiss employment law generally permits either party to terminate an indefinite employment contract without establishing a specific statutory ground.

However, termination must comply with the applicable notice requirements and protections against abusive dismissal and dismissal during protected periods.

An employer must provide written reasons for dismissal if the employee requests them.

Statutory notice periods

The standard notice periods under Article 335c of the Code of Obligations are:

After probation, termination generally takes effect at the end of a calendar month unless a permitted alternative has been agreed.

Different notice periods may apply under a written employment contract or collective labour agreement, subject to statutory restrictions.

The notice periods for employer and employee generally must be equal.

Where unequal periods are agreed, the longer period normally applies to both parties.

Immediate termination

Swiss law permits immediate termination for serious cause under Article 337 of the Code of Obligations.

The circumstances must make continuation of the employment relationship unreasonable.

The threshold is high, and an unjustified immediate dismissal can create financial liabilities.

Employers should assess the facts and applicable legal requirements before taking such action.

Protection against dismissal during illness, pregnancy and other circumstances

Article 336c of the Code of Obligations restricts employer termination during specified protected periods after probation.

Protected periods

These are statutory protected periods, not automatic extensions of paid sick leave.

A termination notice issued by an employer during a protected period is generally void.

Where a protected period begins after a valid notice has been given, the running of the notice period may be suspended.

The application of these rules depends on the circumstances and statutory requirements.

Abusive dismissal

Swiss law also protects employees against abusive termination.

Examples can include dismissal because an employee exercises a constitutional right, asserts contractual claims in good faith or possesses certain protected personal characteristics.

An abusive dismissal is not necessarily invalid, but it may give rise to compensation.

Under Article 336a of the Code of Obligations, compensation can generally reach up to six months’ salary, subject to the court’s assessment and applicable statutory rules.

Employers should distinguish between an abusive dismissal and a dismissal prohibited during a protected period, as the legal consequences differ.

Severance payments in Switzerland

Switzerland does not generally require statutory severance payments for every termination.

However, Articles 339b–339d of the Code of Obligations establish a specific compensation entitlement for certain long-serving employees.

An employee aged at least 50 who has completed 20 or more years of service may qualify for statutory severance compensation.

The statutory amount is generally between two and eight months’ salary, subject to the applicable legal provisions.

In practice, occupational pension contributions and benefits can reduce or eliminate the amount payable under these provisions.

Additional severance obligations may arise from an employment contract, collective labour agreement, settlement or other binding arrangement.

Mutual termination agreements

Employers and employees may agree to terminate employment by mutual consent.

However, such agreements cannot simply be used to circumvent mandatory employee protections.

Swiss case law requires particular care where an employee waives statutory rights.

A termination agreement should reflect genuine mutual concessions and must not improperly deprive the employee of mandatory entitlements.

Our article on severance rules and termination risk examines these issues in international employment.

Redundancies and collective dismissals in Switzerland

Where an employer proposes dismissals affecting multiple employees, additional requirements may apply.

Swiss law establishes collective dismissal rules based on the number of employees at an establishment and the number of proposed dismissals within a specified period.

The statutory thresholds generally concern dismissals within 30 days:

Where the collective dismissal provisions apply, employers must follow the required employee consultation and notification procedures.

Additional social plan requirements may arise for qualifying larger employers and redundancy programmes.

Failure to follow the statutory procedures can create legal and financial consequences.

International companies should assess these obligations before implementing substantial workforce reductions in Switzerland.

Hiring foreign nationals in Switzerland

Switzerland applies different immigration requirements to EU/EFTA nationals and third-country nationals.

Eligible EU/EFTA nationals benefit from the applicable free movement arrangements, subject to registration and permit requirements.

Employment of non-EU/EFTA nationals is more restrictive and generally focuses on qualified professionals.

The authorities consider factors including:

• The individual’s qualifications and experience.
• The proposed role and remuneration.
• Labour market priority requirements.
• Applicable permit quotas.
• The employer’s eligibility.
• Compliance with Swiss working and salary conditions.

The employment model must also satisfy any applicable staff leasing restrictions.

A contract with an Employer of Record does not automatically establish eligibility for a Swiss work permit.

Acumen’s global mobility and immigration services support international employers with eligible work authorisation and employment arrangements.

Employer of Record compliance and staff leasing in Switzerland

Switzerland regulates commercial staff leasing under the Federal Act on Employment Services and the Hiring of Services.

Where an employee is formally employed by one company but works under the direction and supervision of another, the arrangement may constitute staff leasing.

Commercial staff leasing generally requires the relevant Swiss authorisation.

Swiss law also prohibits staff leasing into Switzerland by companies based abroad.

These restrictions are particularly important for international companies considering an Employer of Record arrangement.

Before establishing employment, the proposed model must be assessed against:

• The location and legal status of the employing entity.
• Whether the relationship constitutes regulated staff leasing.
• Applicable cantonal and federal licensing requirements.
• Collective labour agreement obligations.
• Immigration eligibility.
• Responsibility for workplace supervision and employee protections.

An EOR arrangement that is lawful in another country may not be permissible under the same terms in Switzerland.

Acumen International assesses the applicable requirements before determining an appropriate employment arrangement.

Our article on choosing the right Global EOR partner examines the importance of employment model suitability and regulatory requirements.

HR compliance risks for international employers in Switzerland

Swiss employment compliance involves more than preparing an employment contract and processing monthly salaries.

The following issues require particular attention:

The consequences depend on the particular circumstances and applicable legislation.

Our global employment compliance checklist provides a broader framework for assessing international workforce obligations.

How Acumen International supports HR compliance in Switzerland

Acumen International supports international companies employing eligible professionals in Switzerland through legally appropriate Global Employer of Record arrangements.

Our services cover:

• Employment contracts and onboarding: Coordinating employment documentation and the applicable local employment arrangements.
• Payroll and statutory contributions: Administering salary payments, social insurance, occupational pensions and relevant reporting.
• Leave and benefits: Coordinating annual leave, qualifying absence entitlements, insurance and agreed employee benefits.
• Employment changes: Supporting contractual amendments, salary adjustments and employee administration.
• Immigration coordination: Assisting with eligible work authorisation requirements for foreign professionals.
• Termination administration: Coordinating notice requirements, final payroll and employment documentation.
• International account management: Providing a dedicated point of contact and consolidated administration for companies employing personnel across multiple jurisdictions.

Where an employment arrangement involves regulated staff leasing, the relevant legal and licensing requirements must be established before implementation.

Our Employer of Record onboarding guide explains the wider considerations involved in establishing international employment arrangements.

Frequently asked questions about employment law in Switzerland

Is a written employment contract mandatory in Switzerland?

Not universally. Employment contracts may generally be concluded orally or in writing, but certain terms require written form. Employers must also provide specified written information for qualifying employment relationships.

What is the maximum probationary period in Switzerland?

The statutory default is one month. A probationary period of up to three months may generally be agreed in writing, subject to applicable requirements.

How many hours can employees work in Switzerland?

The statutory maximum is generally 45 or 50 hours per week, depending on the employee’s occupation and category.

How much annual leave are employees entitled to?

Most employees are entitled to at least four weeks of paid annual leave. Employees up to their 20th birthday receive at least five weeks.

What are the statutory notice periods in Switzerland?

After probation, the standard notice is one month in the first year, two months from the second to ninth year and three months from the tenth year onwards.

Can an employer dismiss an employee during sick leave?

Swiss law restricts employer termination during specified protected periods after probation. The protection can extend from 30 to 180 days depending on length of service.

Is severance pay mandatory in Switzerland?

Not for every termination. Statutory severance provisions may apply to certain employees aged at least 50 with 20 or more years of service, although occupational pension benefits can affect the amount payable.

Is paternity leave available in Switzerland?

Yes. Eligible employees are generally entitled to two weeks of leave for the other parent under the applicable statutory rules.

Can a foreign company employ staff in Switzerland without establishing a subsidiary?

Potentially, yes. The appropriate model depends on employment, payroll, tax and staff leasing requirements.

Are Employer of Record arrangements permitted in Switzerland?

They may be possible where the proposed arrangement satisfies Swiss law. Commercial staff leasing is regulated, and staff leasing into Switzerland by companies based abroad is prohibited.

Employ your workforce in Switzerland with Acumen International

Acumen International helps international companies employ eligible professionals in Switzerland and administer the associated employment contracts, payroll, statutory benefits and HR obligations.

Our services cover onboarding, social insurance, occupational pensions, working-time and leave administration, employment changes, eligible immigration support and termination procedures.

Whether you are hiring your first employee in Switzerland, establishing a specialist team or managing employees across several countries, Acumen supports the assessment and administration of an appropriate employment arrangement.

Contact Acumen International to discuss your requirements.