Guide to employment, payroll and benefits in

Switzerland

Rivermate offers complete payroll, benefits and compliance services for

Switzerland

01. Overview

Last updated: 

August 19, 2021

Currency
Swiss Franc
Capital
Bern
Ease of doing business
76.6
Language
German
Population
8654622
GDP growth
1.09%

02. Grow your team in

Switzerland

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Switzerland

, particularly if you don't have established local relationships. You can hire employees in

Switzerland

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Switzerland is a landlocked country located at the crossroads of Western, Central, and Southern Europe. Its official name is the Swiss Confederation. It is a federal republic with federal authorities headquartered in Bern, consisting of 26 cantons. Switzerland is bordered on the south by Italy, on the west by France, on the north by Germany, and on the east by Austria and Liechtenstein. The Swiss Plateau, the Alps, and the Jura are geographically separated, with a total area of 41,285 km2 and a surface area of 39,997 km2. Despite the fact that the Alps cover the majority of the country, the Swiss population of 8.5 million people is concentrated mainly on the plateau, which is home to the country's largest cities and economic centers, including Zürich, Geneva, and Basel. Several international organizations have offices in these cities, including FIFA's headquarters, the UN's second-largest office, and the Bank for International Settlements' main building. These cities are also home to Switzerland's major international airports. The Old Swiss Confederacy was established in the late Middle Ages as a result of a series of military victories over Austria and Burgundy. In 1648, the Peace of Westphalia officially recognised Swiss independence from the Holy Roman Empire. The Swiss National Day honors the Federal Charter of 1291, which is considered the country's founding text. Switzerland has maintained a strict policy of armed neutrality since the 16th century Reformation; it has not waged an foreign war since 1815 and did not join the United Nations until 2002. Despite this, it pursues an active foreign policy and is frequently involved in global peace-building efforts. Switzerland is the headquarters of the Red Cross, one of the world's oldest and most well-known humanitarian organizations, as well as a number of international organizations, including the United Nations Office at Geneva, the world's second-largest. Although it is a founding member of the European Free Trade Association, it is not a member of the European Union, the European Economic Area, or the Eurozone. Through bilateral arrangements, it participates in the Schengen Area and the European Single Market. Switzerland is at the crossroads of Germanic and Romance Europe, as its four major linguistic and cultural regions reflect: German, French, Italian, and Romansh. Swiss national identity is rooted in a common historical tradition, shared ideals such as federalism and direct democracy, and Alpine symbolism, despite the fact that the majority of the population speaks German. Switzerland is known by a number of native names due to its linguistic diversity: Schweiz, Suisse, Svizzera, and Svizra. Instead of the four national languages, the Latin term Confoederatio Helvetica – sometimes shortened to "Helvetia" – is used on coins and stamps.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

If an employment contract is concluded for a specified period of time or for the performance of a specified task, it terminates automatically at the end of that period or upon completion of the task, unless the employment contract is extended. In the latter situation, the employment contract becomes an indefinite-term contract. Regardless of the employment contract's set period, the parties are free to agree on abrupt termination at any moment. If an employment contract is not fixed in duration, either the employer or the employee may cancel it at any time by giving notice of termination, however the minimum notice period required varies according to the prior duration of the work connection. Both the employer and the employee have the right to cancel the employment contract without prior notice if a "serious cause" exists. A severe cause is any event in which the terminating party's loyalty and trust in the work relationship may no longer be reasonably expected.

Notice period

Seven days' notice is required for dismissal during the probationary period. A month's notice is customary for dismissals occurring during the first year of employment. This increases to two months between the second and ninth years of employment, and to three months beginning with the tenth year of employment. Employers and employees may agree to an immediate termination of contract if it is mutually beneficial.

Severance pay

Severance is necessary in a few instances. Employees over the age of 50 who have worked for their employer for more than 20 years are entitled to a minimum of two months' salary in lieu of severance. Severance is normally not paid in other circumstances unless a contract or collective bargaining agreement requires it.

Probation period

In Switzerland, probationary periods typically last between one and three months. Seven days' notice is required for dismissal during the probationary period.

07. Working hours

General

In Switzerland, the standard workweek for industrial workers, office personnel, technical personnel, and retail employees is 45 hours. All other employees are limited to 50 hours per week. Having said that, standard work hours vary by employer, job requirements, and industry, and the majority of employees work between 40 and 42 hours per week.

Overtime

Overtime is limited to two hours per day. Employees working 45 hours per week are limited to 170 overtime hours per year, while employees working 50 hours per week are limited to 140 overtime hours per year. Overtime pay is 125 percent of the employee's standard hourly rate, although white collar workers and retail employees in large stores do not receive the 25% supplement until they work 60 hours.

08. Minimum wage

General

While there is no legal minimum wage in Switzerland, the majority of voluntary collective bargaining agreements include minimum compensation provisions ranging from 2,200 to 4,200 francs per month for unskilled workers and 2,800 to 5,300 francs per month for skilled personnel.

09. Employee benefits

General

Anyone staying in Switzerland for more than three months, including non-residents, is required to buy private health insurance. All health insurance firms provide a basic coverage that is reasonably priced, and insurers are obliged to insure all applicants. Many people augment their basic insurance with extra coverage.

All Swiss citizens are required to have health insurance, which covers the expenses of medical treatment and hospitalization. Residents must contact insurance providers since employers are not always responsible for obtaining coverage. Even if the policy specifies that it covers medical treatment in Switzerland, most Swiss insurance authorities will not recognize it.

An annual individual health insurance package may cost up to CHF 10,000 depending on the amount of coverage. Residents must additionally contribute to the cost of treatment by paying a CHF 300 yearly deductible and a 10% surcharge on expenses over and above the excess, up to a maximum of CHF 700.

Some companies provide supplemental private insurance plans that cover treatments that are not covered by the basic insurance or that enhance the quality of accommodation and service in the event of hospitalization.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Switzerland

to hire a team takes time, money, and effort. The labor law in

Switzerland

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Switzerland

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Switzerland

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Switzerland

via our Employer of Record / PEO solution.

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