Switzerland Fact-File Part 6:
Individual Business Employment Issues

6.1 Switzerland Individual Business Employer Responsibilities

The Duties and Responsibilities of Individuals in Business as Regards Employing People

Swiss employment laws are relatively liberal when compared to other countries, especially those in the EU. The Swiss Code of Obligations sets out the provisions with regard to employing staff.

A written employment contract is not compulsory, but it is advisable. The parties to the contract can decide whether the contract is to be governed by the Swiss Code of Obligations.

Should an employment contract be drafted then there are certain things that need to be specified in the document, including:

Job title and summary of the key tasks;
Starting date;
Any trial period;
Length of contract;
Salary or wage;
Any insurances to be paid;
Holiday entitlement
Termination and notice period.

Employers are legally obliged to prepare and issue an employment certificate to each employee when requested.

There is no statutory minimum wage in Switzerland, although minimum wage levels are sometimes stipulated for certain types of occupation. The maximum legal working week is 45 hours for specified employees including industrial workers, office staff, technical personnel and sales personnel in large retail organizations. For other workers, the maximum is 50 hours per week. Statutory holiday entitlement is four weeks or five weeks, depending on age.

All employees must pay income tax and social security contributions, which must be withheld by employers for remittance to the Federal Tax Administration. These contributions go towards health, unemployment and old age provision.

In terms of social security contributions, it was announced in November 2010 that a 1% solidarity surcharge (0.5% from both employer and employee) will be introduced from January 2011 for taxpayers with annual earnings in excess of CHF126,000 (up to CHF315,000).

Additionally, between January 2011 and December 2015, employer and employee social security contributions towards state allowances for military service and maternity leave (EO) will be increased by 0.1%, from 0.15% to 0.25%. Contributions to the unemployment insurance fund (ALV) will also be increased by 0.1%, to 1.1% for employers and employees, capped at annual income levels of CHF126,000.