Once you’ve selected the right candidate to fill your new role, the next step is to send them an official offer letter.
An offer letter, more commonly called an “employment contract” in Switzerland (or occasionally, a “work contract”), is a legally binding document that details the rights and obligations of both the employee and employer. It ensures both adhere to the Swiss Code of Obligations, which regulates both contract law and corporations in Switzerland.
As the employer, the offer letter gives you the opportunity to set forth details like the benefits your new hire will receive, their salary, and the duration of the job. The employment contract is also an important point of reference during negotiations.
Here’s what you need to know to send a legally compliant offer letter to hire an employee in Switzerland.
Types of employment contracts in Switzerland
First, it’s crucial to be aware that in Switzerland, there’s more than one type of employment contract. For the purposes of clarity, we’ll be focusing on individual employment contracts—that is, those signed between an individual employee and an employer. There are also standard and collective employment contracts, but those have to do with federal and cantonal authorities and employers’ associations and workers’ unions, respectively—they’re not relevant here.
There are three types of individual offer letters you should be aware of:
- Open-ended/permanent/indefinite: This is the standard employment contract you would use when hiring an employee for a full-time job that would not end unless they voluntarily resigned or were terminated. Additionally, it’s common in Switzerland for the first month of a permanent job offer letter to be a probationary period. If you wish, you can extend the probationary period to three months, but this must be done in writing. The contract can be terminated during this period with seven days’ notice; it’s not necessary to give a reason.
- Fixed-term: You would use this contract when hiring an individual for a job that lasts a set amount of time. You might use it, for instance, when hiring an independent contractor or an employee whose role has an end date. Unlike an open-ended employment contract, a fixed-term one must contain an end date for the position. It can, of course, be renewed or upgraded to an indefinite contractor.
- Part-time or temporary: Part-time and temporary contracts can be either fixed-term or open-ended. They’re exactly what they sound like: job offer letters for employees who will have only part-time working hours or whose jobs are temporary.
Switzerland job offer letter checklist
Before we discuss what should be included in the job offer letter, a quick note: the Swiss Code of Obligations and federal authorities don’t require you to write down every painstaking detail in the employment contract for it to be legally binding. However, the below information must be included:
- The worker’s name and the company name.
- Job description and start date. This section should list the job title and its tasks and responsibilities. Indicate the start date for the job and, if it’s an open-ended/permanent/indefinite contract, how long the probationary period will last. Remember: If the probation period lasts longer than one month, you must put this down in writing.
- Annual base salary. The annual base salary in CHF (Swiss francs) should be included in the offer letter. List any bonuses or commissions in this section as well. Some employers also include the amount of social security that will be deducted from the annual base salary.
- Working hours. Regular working hours are capped at 45 per week under Swiss employment law.
- The job’s end date. This only needs to be included if the offer letter is fixed-term.
- The name of the canton (county) where the terms of the employment contract will be enforced.
- Annual leave, holiday pay and other paid leave. In Switzerland, employees are entitled to a minimum of four weeks of annual leave each year. This is true for both full and part-time employees. As you’re filling out this section, check the appropriate collective bargaining agreement: It might entitle employees to more paid time off. This is also the section where you’ll talk about “other paid leave” like maternity leave, carer’s leave, and so on.
- Sickness. Swiss labor law requires employers to give employees paid sick leave. If the employee will be absent for more than three days due to their illness, they need to present a medical note. From there, they’ll receive their salary for a certain period of time.
- Occupational pension scheme. Employers are legally required to offer an occupational pension system and to enroll employees who are making 21,150 CHF annually or more in it. Both employees and employers are also legally mandated to contribute to the Old Age and Survivors’ Insurance (OASI) social security fund.
- Confidentiality. To protect trade secrets and other confidential information, most companies have their new hires sign confidentiality and non-disclosure agreement (NDA) policies.
- Termination policy. State the terms under which an employee can be dismissed from their position. Switzerland abides by a “freedom of termination” viewpoint and recognizes at-will employment. Discuss your company’s dismissal policies and make sure you abide by the legally mandated notice periods, severance policies, and so on.
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Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.