As in many countries, labour law in Switzerland includes strict regulations to protect employees from various forms of harm. For example, employees in Switzerland have the right not to be discriminated against at work on the basis of protected characteristics like their sex, age, or race. There are also laws in place to protect employees’ privacy, including the Federal Data Protection Act.
Switzerland is in an unusual position in Europe in that it is in the Schengen area but not in the EU. Unlike most of its neighbours, EU legislation and directives such as the Whistleblowing Directive do not apply in Switzerland. That means that even employees who are accustomed to hiring norms and labour laws in EU countries should carefully study the rules in Switzerland to ensure their Swiss operations are compliant. This not only protects your employees, but also safeguards your business from legal, financial, and reputational risks.
There is currently no law in Switzerland protecting whistleblowers or requiring employers to put in place reporting channels. There have been several efforts to introduce such measures over the last two decades, but these have been rejected by either the Federal Council (Bundesrat) or the National Council (Nationalrat).
Courts in Switzerland therefore continue to assess each case separately with only case law to guide their decisions. Switzerland is under significant pressure to introduce measures to facilitate whistleblowing and safeguard those who make reports, including by the OECD.
Though there is no legislation governing the actions of whistleblowers in Switzerland, case law does provide some guidance on how employees should report irregularities in the workplace. Employees must first report misconduct internally to the employer and only disclose the issue to the relevant authorities if no action is taken. Employees may report publicly only if no action is taken by the authorities and the misconduct is serious enough to constitute a threat to the public interest.
Employers in Switzerland have no obligation to set up reporting channels for whistleblowers. However, they can do so on a voluntary basis. This is generally considered best practice, especially for large organisations. Not doing so can mean that reports of legal violations or violations of internal rules and values do not reach the necessary people, or only reach them after significant delays.
Generally speaking, the culture in Switzerland is one that values privacy and the protection of personal information. For this reason, there are strict rules about data protection in Switzerland that you need to be aware of as an employer.
As Switzerland is a non-EU country, the General Data Protection Regulation (GDPR) does not apply. However, the country’s main piece of data protection legislation, the Federal Data Protection Act (DPA) contains similar provisions. Other data protection legislation in Switzerland includes the Swiss Unfair Competition Act (UCA), the Swiss Telecommunications Act and the Swiss Penal Code. The national supervisory authority is the Swiss Federal Data Protection and Information Commissioner (FDPIC).
Employers in Switzerland must have the consent of employees or job candidates to process their personal data. They should only process data if it is necessary for the performance of the employment contract or to assess a candidate’s suitability for a role. Employers should also keep in mind that, while employees can consent to having their data processed, it can be difficult to prove consent was given voluntarily in case of a dispute.
Employers in Switzerland can implement surveillance systems in the workplace. However, these must comply with the country’s data protection regulations. First, surveillance systems must meet an objective need, such as safety or accident prevention. Installing surveillance systems to monitor employees at their workstations is not permitted. Surveillance should also be proportional and fair.
When an employer needs additional labour to cover temporary needs, they may engage workers through a temporary work agency. While this arrangement exists in Switzerland, labour leasing is heavily regulated and subject to certain requirements.
Employers who hire out workers to third parties on a commercial basis in Switzerland must obtain a permit from the competent cantonal (state) office for economic affairs and labour. They must also pay a security deposit of at least CHF 50,000 to pay wage claims. All licenced labour leasing companies in Switzerland are subject to a generally binding collective agreement.
Temporary work agencies in Switzerland hire workers under an employment contract. They then offer the employee work with third-party user companies. When an employee accepts an assignment, the agency concludes an agreement with the user company, which will be responsible for supervising and directing the work.
In Switzerland, temporary agency workers have been entitled to the same pay as permanent employees performing the same role since March 2012. This is due to the implementation of the Federal Act on the Hiring of Services (Entsendegesetz), which was brought in to protect temporary agency workers and ensure equal pay for equal work.
Switzerland has a strong legal framework to protect employees from discrimination, including the Swiss Constitution, the Gender Equality Act, and the Federal Act on Equal Treatment of Women and Men.
Employers in Switzerland are prohibited from discriminating against employees based on their ‘personality traits’. This is generally understood to mean their:
In addition to Switzerland’s anti-discrimination laws, international agreements between Switzerland and the EU expressly prohibit discrimination on the basis of an employee’s nationality. Employers are not allowed to treat employees differently based on any of these characteristics with respect to hiring, compensation, working conditions, promotion, demotion, benefits, and termination.
Both the Swiss Gender Equality Act and the Federal Act on Equal Treatment of Women and Men expressly prohibit sexual harassment of employees. This is defined as including threats, the promising of job-related advantages to obtain favours of a sexual nature. Employers in Switzerland must take all reasonable steps to prevent sexual harassment in the workplace. Employees who have been sexually harassed may suspend their work and continue to receive pay. They may also terminate their employment contract with immediate effect and are entitled to damages equivalent to the amount they would have been paid during the notice period.
Equal pay has been enshrined in the Swiss Constitution since 1981. The Gender Equality Act, which came into force in 1996, also prohibits discrimination based on gender in various aspects of employment, including compensation. Despite this, Switzerland still has a pay gap of around 18%. The Swiss government has put in place various measures to combat the issue of pay inequity and reduce or eliminate the pay gap.
In 2020, the Swiss government passed a revision to the Gender Equality Act that will be in place for 12 years (until 2032). Under this law, employers with more than 100 employees are required to conduct an analysis of equal pay within their organisations, in line with a recognised method. The analysis must be verified by an authorised external body and then communicated to employees (and shareholders for public companies). Companies must repeat this analysis every four years until an analysis shows that the company has achieved equal pay.
In 2023, the EU approved a new directive on pay transparency, which will introduce changes to the way companies across the EU handle compensation. Although Switzerland is not an EU country, many Swiss companies hire employees from the EU. These employers will need to ensure their operations comply with the rules set out in the directive.
Understanding what you can and can’t do as an employer is one of the biggest challenges of hiring in Switzerland. Get it wrong, and you could face legal action and damage to your reputation.
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