If you're an international company considering adding workers from Switzerland to your global roster, you have excellent prospects. Switzerland may be small, with a population of approximately 8 million people. However, the country boasts a robust workforce. For example, Switzerland reports high levels of educational attainment, with at least half of 25- to 34-year-olds having a tertiary education.
Beyond this, Switzerland's residents are proficient English speakers, with the country's overall English proficiency ranking 29th out of 111 countries globally. Since many global companies use English as a common language, Switzerland’s proficiency creates a talent advantage. Additionally, Switzerland residents are often multilingual.
Hiring in Switzerland—as in any foreign country—requires respecting local labor laws and other regulations to ensure individuals are employed compliantly. Failing to respect such legislation can result in penalties, such as regulatory fines, or legal action against you for an unlawful engagement. How can you navigate the waters of international hiring without running afoul of Swiss legislation?
An employer of record (EOR) in Switzerland may be the answer. An EOR employs individuals in accordance with local law. Those individuals, who are EOR employees, provide their services to you. The EOR is responsible for the employment relationship, such as payroll, benefits, taxes, and compliance. Learn more about EORs in Switzerland below.
What to know about EORs in Switzerland
An employer of record in Switzerland is responsible for a variety of different human resource related functions typical of an employer-employee relationship. Although the exact tasks an EOR will perform vary depends on each EOR provider, common responsibilities include:
- Compliance: Ensuring compliance with applicable,local labor laws.
- Payroll: Running payroll and ensuring that workers are paid appropriately in Swiss francs (CHF) and withholding taxes and social security as needed.
- Benefits: Managing benefits such as health insurance, parental leave, and time off in accordance with Swiss laws.
- Contract termination: Terminating contracts in line with relevant legislation, such as respecting the obligatory notice period, for example.
- Onboarding: Manage the onboarding new employees onto your team.
Pros of using an EOR to hire employees in Switzerland
If you're unsure about using an employer of record in Switzerland, a quick breakdown of the pros and cons can be helpful. Here are some of the advantages:
- Save time: An EOR in Switzerland can bring local expertise to the table, providing insights into local laws and employment norms. This can save you time, sparing you the task of researching Swiss legislation.
- Reduce stress: Questions about compliance can be a big headache for companies, especially those operating in multiple countries. An EOR can reduce stress by taking care of compliance questions for you.
- Embrace local norms: Hiring in diverse markets isn't just a question of meeting legal requirements. You also want to consider market norms. For example, simply paying the legally obligated minimum wage may not be enough to attract top talent. An EOR can offer insights into such market standards.
- Conserve resources: Employing through your own entity internationally is expensive, requires local human resource knowledge, and operational compliance to ensure your local entity is organized, and operates, in accordance with local law. In addition to increased employment risk, you take on the additional complexities of corporate risk.
Cons of using an EOR to hire employees in Switzerland
Using an EOR in Switzerland isn't for everyone. Drawbacks of an EOR solution include:
- Regional restrictions: An EOR in Switzerland will be restricted to Switzerland for hiring purposes. If you're also looking to hire elsewhere, you'll need to find an EOR that can help you in those locations.
- Variable service levels: Not all EORs are created equal. The services they offer differ significantly. You have to do your research to make sure you're choosing a provider that meets your needs.
- Lack of streamlined solutions: If you end up working with multiple EORs as a global employer, it can get confusing. You'll have to deal with different EORs for each country in which you hire.
Global employment platforms (GEPs) as an alternative to EORs
Although they can be helpful in some instances, EORs aren’t the only option for hiring in Switzerland. One alternative is a global employment platform (or GEP) like Oyster. Oyster helps global companies onboard and manage a global workforce in Switzerland, plus 180 other countries worldwide. With Oyster, you have assurance that employment contracts, payroll, benefits, and more for your global team are managed in accordance with applicable law in one user-friendly platform.
Through our platform, Oyster develops tools to simplify managing a global team, such as a cost-of-employment calculator. The amount you'll have to pay for Oyster hire someone in Switzerland differs from what it would cost if we hired someone in Mexico or Brazil, for example. Oyster's cost-of-hiring calculator accounts for not only salaries, but also taxes and social security.
Considerations for finding talent in Switzerland
Ready to tap into Switzerland's talented workforce? You've made a good choice. However, it's important to consider the administrative aspects of Oyster hiring someone in the country. Our guide to hiring in Switzerland gives an overview, covering everything from currency to holidays. Below, we cover some details you'll need to consider when hiring in Switzerland.
Employment contracts
Switzerland has various laws governing employer-employee contracts, notably the Federal Code of Obligations, which governs contracts and termination. Meanwhile, the Federal Labor Act sets the terms for employment conditions. Swiss employment contracts need to include specific elements, such as working hours, compensation and benefits (like paid leave), bonuses, probationary periods, and termination and severance clauses.
Termination and severance
Termination rules in Switzerland depend on how long someone has been employed. If the employee is in their probationary period, they must be given seven days' notice. If the probationary period is over and the employee is in their first year of service, they must be given one month's notice. If they’re in their second to ninth year of service, they should get two months' notice. After the employee has completed nine years of service, they must receive three months' notice.
However, contracts can be terminated without notice for just cause—basically, if something occurs that would prevent the employer or employee from maintaining the working relationship in good faith. An example might be a case of employee theft. Switzerland doesn't have laws regarding severance package allowances, which are left to each organization's discretion.
Compensation and benefits
Switzerland doesn't have a legally mandated minimum wage, but salaries tend to be generous. For instance, the average starting salary of an elementary school teacher in Switzerland is equivalent to $60,948 (not including benefits). In comparison, it's equivalent to $29,820 in Japan, $37,017 in Ireland, and $14,345 in Brazil. If you want the best talent, you must offer a competitive salary in line with market norms.
Benefits are highly regulated by the Swiss government. The country's statutory benefits and paid leave requirements are stringent. Take maternity leave, for instance. Pregnant employees get 14 weeks of leave after giving birth. If the employee has worked for the company for at least three months and made social security contributions in that time, they are entitled to 80% pay during this period. Other benefits to consider include vacation, sick leave, health coverage, and unemployment, disability, and accident insurance—as well as pension contributions. However, laws change which means benefits and statutory entitlements can change. Oyster’s Global Employment Platform can help you manage this change.
Working hours
The standard workweek in Switzerland is usually 40 to 42 hours per week, with the maximum working hours for office workers capped at 45 hours per week. The laws also govern rest times. Employees who have been working for more than five and a half hours must have a 15-minute break, those working for more than seven hours get a 30-minute break, and those working for more than nine hours are entitled to a one-hour break.
Overtime is possible, but it has to be compensated appropriately. It can be compensated with time off or at an increased salary of 125% of the employee's regular base salary. That said, overtime must be limited and is capped at 60 hours per year. If you require employees to work on Sundays or public holidays, they’ll have to be paid at 150% of the regular rate.
Taxes
Employer taxes in Switzerland amount to 8% of the individual's total gross salary. Income taxes for workers are filed at three levels: federal, municipal, and cantonal (according to the relevant "canton"). Switzerland is made up of 26 cantons, member states of the Swiss Confederation. Zurich, for instance, is a canton.
Holidays and vacation
Holiday allowances in Switzerland are highly regulated. Workers are entitled to a minimum annual leave of four weeks per calendar year. Employees under 20 or over 50 are entitled to five weeks per year. If the worker hasn't worked for a full calendar year, then their holiday allowance is determined at a pro rata rate.
There are also public holidays to take into account. Switzerland has 10 general public holidays, although exact numbers may vary according to the region or canton. For instance, Corpus Christi is a public holiday in some, but not all, Swiss cantons.
Hiring in Switzerland with Oyster
Keeping track of the many administrative and logistical practicalities of hiring in Switzerland isn't easy. Oyster can help. Our global employment solutions support employers in remaining in compliance with local laws. As the only certified public benefit corporation operating in our space, Oyster helps you take care of your workers in more than 180 countries worldwide, with one streamlined solution.
About Oyster
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.
