Table of Contents

Switzerland

Table of Contents

Currency

Swiss Franc (CHF)

Payroll Frequency

Monthly

Employer Taxes

8.07% - 23.4%

About Switzerland

Switzerland is a country located in central Europe, rich in natural highlights such as the Alps and some of the most picturesque lakes in the world. The country is a major tourist destination, known for its resorts and hiking possibilities, located in the beautiful mountainous parts of the country. It has historically been a welcoming banking hub, known for respecting the privacy of those who want to do business there. As a result of its landlocked geographical reality, Switzerland has always preferred to be a neutral state in all global conflicts. Its political stability has made Switzerland one of the wealthiest countries in the world. The country has a rich and diverse culture, with the majority of its population deriving their heritage from the French, Germans, and Italians, reflected in both languages spoken, as well as their cuisine.

Employment Relationship

• Permanent Employment

Per Swiss employment law, individual labor contracts regulate the rights and obligations of employers and employees. Contracts for an indefinite duration are considered to be permanent. They end with a notice of dismissal and must be made in writing. The first month of employment under such labor agreements is the probation period. 

• Fixed-Term or Specific-Purpose Contracts

Fixed-term employment contracts in Switzerland cannot be terminated before the agreed date unless the contract provides for early termination or good cause exists. There is no limit on the duration of this type of labor agreement; however, if an employment relationship is tacitly extended beyond the agreed term, it is considered open-ended. Fixed-term employment agreements do not require notice of dismissal unless they become open-ended contracts under the circumstances described above. Fixed-term contracts concluded for more than 1 month must be made in writing. There is no statutory probation period for this type of labor agreement. 

• Temporary Employment Contratcs

In Switzerland, employers can hire temporary workers through temporary staffing agencies. There is a triangular agreement between the client employer, staffing agency, and temporary employees. The agreement between the client employer and the employment agency regulates how much the client company pays the employment agency for the temporary workers. The staffing agency has an obligation to pay temporary workers their wages. A succession of assignments of workers on the same post in the same firm is not allowed.

Probationary Period

The first month of the employment relationship in case of employment contracts for an indefinite duration is considered the probationary period. It may not exceed 3 months for permanent employment agreements and is waived for fixed-term contracts. There is no statutory provision of leave during probation, employees and employers can decide upon leaves. During the probation period, either party may terminate the contract at any time by giving 7 days’ notice to the other party.  If the employee is absent from work during the probationary period due to sickness, accident, or the performance of a legal duty that is not voluntarily assumed, probationary period is prolonged accordingly.

Working Hours

Under the Federal Labour Act of Switzerland, the maximum for weekly working hours is 45 for industrial workers, office, technical, and other employees, including salespersons in large retail stores. For all other commercial enterprises, the legal maximum working hours are 50 per week. Regular weekly working hours are determined by employment or collective bargaining agreements. Nighttime work cannot exceed 9 hours per shift; however, if the employee works only for a maximum of 3 out of 7 consecutive nights, the working time may be increased to 10 hours per shift. Permanent or regular evening, night, and Sunday work must be considered indispensable for either technical or economic reasons. Time off equal to 10% of the hours of night work performed must be provided for night work carried out on 25 or more nights per calendar year. 

Holidays / PTO

• Statutory Holidays

New Year’s Day: 1 January; St. Berthold’s Day: 2 January; Good Friday: Variable; Easter Monday: Variable; Labor Day: 1 May; Ascension: May (Variable); Whit-Monday: June (Variable); Swiss National Day: 1 August; “Jeune Genèvois”: September Variable; Christmas Day: 25 December; Boxing Day: 26 December; “Restauration”: 31 December.

• Paid Annual Leave

Under the Swiss Code of Obligations, employees are entitled to a minimum of 4 weeks of paid annual vacation after the first year of service (5 weeks for employees under 20 years of age). If the employee has worked for less than 1 year, the duration of annual leave is fixed pro-rata.  If employees fall sick during their leave, they are entitled to postpone their leave by providing a medical certificate to their employees. They can also take any remaining days of leave during their notice period or a cash payment in lieu of leave days.  Employees need their employer's approval to take time off. If their leave days are not compatible with the needs or interests of the company, their employer can ask them to reschedule. 

• Sick Leave

Employees are entitled to full salary payment during sick leave if they have worked for more than 3 months. During the first year of employment, the entitlement to sick pay is limited to 3 weeks: after that, it is extended based on the years of service. The duration of leave also varies among cantons: in the canton of Zurich, for instance, sick pay is due for 30 days in the first year of service and 90 days in each subsequent year. Employees must submit a medical certificate to their employers no later than on the third day of illness to receive the benefit. 

• Maternity Leave

Under the Swiss Code of Obligations, the right to maternity leave applies to full-time, part-time employees, and self-employed persons if they were insured under the OASI/AHV scheme for 9 months prior to childbirth, and have worked for at least 5 months during their pregnancy.. The minimum length of maternity leave is 14 weeks, starting from the delivery date. Employees who return to work before the end of the maternity leave lose their entitlement to compensation. Women are not allowed to work for 8 weeks after giving birth. Employees can extend their maternity leave by another 2 weeks without pay.  The employer is prohibited from terminating the employee's labor contract during her maternity leave and 16 weeks after childbirth. Discrimination based on pregnancy is not permitted at all stages of employment relationships, including hiring.

• Paternity Leave

Switzerland grants 2 weeks (14 days) of paternity leave to employees. This leave can be taken within 6 months of birth and can be taken in full weeks or on a day-to-day basis. Compensation is paid for income lost while on paternity leave as 80% of the average earned income before the birth of the child, up to a maximum of CHF 195 (Swiss Francs) per day. Fathers have no legal right to extend their paternity leave. They must arrange with their employer if they wish to do so.

Termination of Employment

• Notice Period

Per the labor law of Switzerland, the statutory notice periods are: 7 days during probation 30 days in case of mass redundancy 1 month in the first year of service 2 months from the second through the ninth year 3 months from the tenth year of service The parties may agree on a different notice period. Such an agreement must be in writing, and the agreed notice period must not be less than 1 month. Fixed-term employment contracts are terminated without a notice period. However, fixed-term agreements concluded for more than 10 years require 6 months' notice.

• Severance Benefits

Severance is paid only in case of dismissal of employees above 50 years of age with tenure of at least 20 years. The minimum severance payment cannot be below 2 months and exceed 8 months of salary. If the employee receives benefits from an occupational benefits scheme, these benefits may be deducted from the severance allowance to the same extent they were funded by the employer either directly or through the contributions to the occupational benefits scheme.