8 things employers need to know about Swiss labor and employment laws
Switzerland is a unique country in many respects. For instance, it has four official languages, and its employees are among the world’s highest paid. It also has its own set of complex employment laws that differentiate it from the rest of Europe.
Officially known as the Swiss Confederation, this non-member of the European Union will make your compliance work tricky if you’re headquartered outside the landlocked nation. It’s home to 26 cantons, which are similar to states or provinces, and all of them set different employment laws in addition to the federal Swiss Code of Obligations.
This primer will go over the basics of what you need to know to navigate the hiring process in Switzerland.
1. There’s no national minimum wage
That’s right: An initiative that seemed to be popular and would have introduced a national statutory minimum wage failed to pass when the Swiss Federal Council (the official name for the federal government) let voters decide back in 2014. A few cantons, however—including the Canton of Geneva—do have minimum wage requirements, so it’s important to check the laws of the canton your business is located in.
2. Misclassifying employees is costly, but the Swiss courts are fair
Under the Swiss Code of Obligations, legal guidance that has been in place since 1911, the primary distinction between employees and independent contractors is the level of subordination. The former is subordinate to a direct report, while the latter is not. There are misclassification penalties for conflating these two categories, but unlike many European nations, Swiss courts haven’t had any high-profile, million-Euro cases in recent years. Generally, companies that misclassify workers are asked to pay retroactive benefits and taxes. Still, they’re not hit with additional penalties unless the courts are given reason to believe company officials willfully broke the law.
Our FREE Worker Classification Analyzer lets you know if you are risking millions in fines
Take our FREE quiz3. Switzerland has strong limitations on background checks
Before you take a new employee through the company’s onboarding process in Switzerland, you should run a background check to be sure they are qualified for the position and won’t pose a danger to the company. Swiss law restricts employers from including any information that isn’t directly related to the job in the scope of a background check. Aside from calling a person’s references and verifying the employment history on their resume, things like credit checks, medical screenings, and criminal background checks are off limits—unless you work in specific industries.
4. There’s no national statutory severance scheme
While many nations require employers to pay severance when terminating an employee, this is not true in Switzerland. There is no requirement to pay severance; employees are only entitled to severance pay if they are over the age of 50 and have been working for the company for 20 years or more. In that case, the law dictates that they receive a minimum of two months’ salary and a maximum of eight months’ salary.
5. Swiss workers are among the highest paid in the world
When hiring in Switzerland, you’re tapping into not only one of the best-educated talent pools in the world but also one of the highest paid. According to the OECD, in 2020, Swiss workers were paid an average annual salary of CHF 60,600. Keep this in mind, so you can put together salary and benefits packages that will make you competitive in the Swiss employment market.
6. Trade secrets aren’t automatically protected under Swiss IP law
You can send in an application to the IPI—the Swiss Federal Institute of Intellectual Property—to protect your trademarks, patents, designs, and utility models. Copyright ownership is automatically safeguarded. Although, in Switzerland, the rights belong to the employee—not the employer—for all works created, except computer programs.
The same is not true of trade secrets, which in Switzerland, are usually protected in the employment contract or included in a legally binding non-disclosure agreement (NDA). You must write these contracts carefully and clarify that your trade secrets are confidential. Otherwise, if someone uses them, you’ll have to take that party to court.
7. You must safeguard employees’ personal information
Under the Swiss Federal Data Protection Act, employers are legally required to take steps to protect employees’ personal information. This act was recently revised and has become more strict; now, it’s on par with the European Union’s General Data Protection Regulation (GDPR) and even takes a few steps beyond that. A few of the rules? You must obtain informed consent from your employees before collecting any data, and you are limited to collecting only what’s necessary.
8. There’s an annual cap on the number of work permits that can be issued to non-Swiss citizens
The Swiss government places strict limits on the number of work permits that it issues to non-Swiss citizens each year. To get a work visa, employers must apply to the cantonal authorities for the employee and also send proof that they looked for a Swiss citizen for the job but could not find one.
Frequently asked questions about Swiss labor laws
What is the minimum wage in Switzerland?
Switzerland has no national minimum wage. Instead, several cantons have a statutory minimum wage—although they are the exception, not the rule.
What are the overtime laws in Switzerland?
The Swiss Federal Council caps working time each week at 45-50 hours, but employees can work beyond this if the following conditions are met:
- There is an urgent need for overtime.
- The overtime is necessary to complete a liquidation, take inventory, close out accounts, or address or prevent an operational issue.
- It does not require the employee to work more than two hours of statutory overtime each day.
- It does not require the employee to work more than 170 hours of statutory overtime per year.
Workers must be compensated monetarily or with time off for all overtime hours. If that sounds tricky to monitor, Rippling EOR will automatically track hours and give your Swiss employees the correct overtime rate—no matter their canton.
What are the required benefits in Switzerland?
All full-time Swiss employees are entitled to the following statutory benefits:
- Universal health care coverage
- Vacation entitlements
- Parental leave (including paternity and maternity leave)
- Pension plans and retirement contributions
- Paid sick leave
- Public holidays
- Workers’ compensation insurance
- Social security services, including unemployment insurance, occupational and non-occupational accident insurance, and disability insurance
Statutory minimums for these entitlements can vary depending on canton. Additionally, employee benefits in Switzerland are governed not just by the federal Code of Obligations, but also by the cantonal authorities and by collective bargaining agreements.
For additional information on mandatory benefits in Switzerland, including social security, remuneration for overtime hours, and more, read our complete guide.
Can Swiss employees join trade unions?
Yes. In fact, over one-fifth of Swiss employees are members of trade unions. There are two large national bodies that have 16 and 13 member unions, respectively, under their umbrellas: the Swiss Federation of Trade Unions and Travail Suisse. Trade unions and collective labor agreements play important roles in determining and regulating labor laws and working conditions in Switzerland.
How do I terminate employees in Switzerland?
It’s crucial to be familiar with Switzerland’s termination laws, even though dismissing your newly hired employees is likely far from your mind right now.
The Swiss government has made it fairly easy for employers and employees to end their employment relationship via a unilateral decision. However, you must observe the applicable notice period when terminating an employee.
Below is a table on notice periods for dismissal in Switzerland.
Time Period
Statutory Notice Period
Probationary period
Seven days’ notice
First year of service
One month, starting on the last day of the month in which notice is served
Second to the ninth year of service
Two months, starting on the last day of the month in which notice is served
Tenth year of service or more
Three months, starting on the last day of the month in which notice is served
Swiss law protects employees who are taking sick leave, pregnant, or out on maternity leave from being dismissed until they return to work.
To learn more about Swiss termination requirements, consult our guide.
Hire and onboard Swiss employees with Rippling
If you're hiring employees, independent contractors, or remote workers in Switzerland, you need Rippling.
Rippling allows you to manage HR, IT, and Finance in one unified system. We make it easy to onboard, manage, and pay employees and contractors around the world—in a single system that helps keep you compliant with local employment laws and regulations.
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.
