- Overview: Switzerland
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Switzerland
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Switzerland Guide below will help you understand the nuances of labor legislation in the country.
Companies hire international workforce for various reasons but in most cases they are:
- entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
- hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.
Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.
If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Switzerland, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Switzerland and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.
We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Switzerland.
Hiring and Firing Workforce in Switzerland Guide
By all reasonable criteria, Swiss market it a good destination for those considering international expansion. Its stable economy evident in the low inflation rate, low tax rate, relatively strong and stable currency, top-notch socio-economic infrastructure, high workers’ salary, highly welcoming orientation to investors (local or foreign), to mention just a few, have made it one of the most attractive places in Europe and the world to do business. Having considered the benefits of doing business in Switzerland, Acumen International has compiled some vital information that will guild you through your journey toward expanding to Switzerland.
# Employment Contract
Employment contracts in Switzerland can be enacted by the federal or Cantonal authorities, labor union, or by the individual employer and employee. Notwithstanding the people involved in the enactment of an employment contract, it is always advisable (not obligatory) to have the contract concluded in writing. Before a contract can be concluded, the terms and contents of the contract must be mutually agreed upon by both parties of employment. In other words, the contract can be adapted to fit the interest of the parties, provided they do not go against what is legally accepted.
# Employment Rights
# Working hours:
In all cases, the duration of work, as well as the compensation for every hour of work done, is agreed and written in the contract prior employment commencement. The average weekly hour of work for most workers is 41.5 hours. According to the Swiss Labor Act, all workers engaged in the industrial enterprise, factory workers, and office workers have standard working hours of not more 45 hours per week. Others employees that do not fall under this category can work up 50 hours a week.
# Probationary period
Unless otherwise agreed upon in the contract, the trial period of an employee for any kind of employment does not exceed one month. Everything being equal, an employer can increase the probation period by any number of days or weeks provided the total period will not be more than 3 months. But in the instance, where the employee cannot perform or misses work during the time of probation (for justifiable reasons), the employer at his own discretion can increase the trial time but only proportionately to the number of absence the employee had.
# Annual leave
The duration of annual paid leave should always be decided on in the contract. This duration can be more than the state set duration but should not be less. The minimum annual leave for employees who are over 20 years old is 4 weeks, while for under 20s the minimum leave duration is 5 weeks. Under the law, an employer must give his employees at leave 2-weeks leave successively during the course of their yearly service. As for the leave allowance, the employer is obligated to pay his/her employees their full salary during this period.
# Parental leave
New mothers are entitled to at least 14 weeks’ maternity leave and a daily allowance of 80% of their salary. The allowance may not exceed CHF 196 per day, however cantonal legislation may provide further protection. . Pregnant employees or those who have put to bed but are on their maternity leave cannot be dismissed until 2 weeks after their leave has ended. In addition to this, an employer is under obligation to ensure a conducive working environment for this category of employees starting from the 2nd month of pregnancy through the time of delivery. Note that these benefits are given only if the employee has worked for at least 3 months in the company.
# Sick leave
The length of time-offs that can be given to a sick employee depends on the length of time he/she has worked with the employer. Because the law is silent on the maximum sick leave duration, employers make the decision on their own. Usually, the longer the time, the lengthier the sick leave entitlement. Employees who are within their first year of service in a company are eligible for 3 weeks’ leave provided he/she has been working in the company for not less than 3 months. Those who have up to 2 years working record with the employer are entitled to 8 weeks leave, while those in their 3 years of service have the right to 9 weeks. During this leave period, the employer is obligated to pay the sick employee his/her full monthly salary up till a certain period. Though it is not certain whether not showing a doctor’s note will prevent an employee from enjoying these benefits, it is always recommended and in most cases, required by the employer within the few days of being absent from work because of sickness. Moreover, an employee who has a sick child is entitled to about 3 days’ sick leave.
Not working overtime is somewhat considered abnormal in Switzerland. Employees who work additional hours to the contractual working hours are entitled to 25% premium, or if mutually agreed upon, can be given a proportionate time-off instead. In most cases, workers that occupy managerial positions paid extra for working overtime. If an employee works during the non-working days or public holidays or temporary at non-working hours (night hours), the employer should by law compensate them for those hours of the job done. Night workers who work on a regular basis are entitled to 10% compensation in time.
# Minimum salary
Because the Labor Act in Switzerland does not set the minimum amount that can be paid an employee either on an hourly or monthly basis, the sum paid are usually subject to negotiation. Hence before concluding the contract, the employer and the employee are expected to deliberate on a fee that will be fair for both of them. Workers remuneration is usually paid on a monthly basis. It is important to note that though the level of qualification and years of experience bear on the amount of salary paid, the “principle of seniority” influence it more. Also, gender type influences on the level of salary paid -male employees are usually paid higher than their female counterparts.
# Employment termination
Termination of an employment contract can be two-sided – under a mutual agreement or one-sided – by the death of an employee, end of a fixed-term contract, or a unilateral decision. Except for a justified motive, an employment contract with a pre-determined end date cannot be terminated before the agreed date. Long-term, unlimited contract requires that the length of a notice period, which must apply to both parties, should be discussed and included in the employment contract. If the notice period was not discussed or included in the contract, then the statutory notice period will be used at the time of contract termination. The legal notice duration for employees who are in their probationary period is 7 days, while for those within their first year of service is one month. Employees who have been in a company for about two to nine year are entitled to 2 months’ notice period and 3 months’ thenceforward. Ordinarily, a notice period starts to count from the first day of the month. Thus, it is a common practice for employers to serve their employees with the letter of termination on or before the end of a month.
Employers are not bound by law to explain to the employee why he/she wishes to end the contract, he/she is expected to provide the reasons in writing if and when demanded by the employee.
Under the Code of Obligations, severance payments must only be paid if the employee affected is over the age of 50 and has worked for more than 20 years for the same employer. In that case, the statutory minimum severance payment is equal to two months’ salary.