CONVINUS Global Mobility Alert - Week 9.2023

• Law Firm: CONVINUS
• Subject Matter: Employment and HR, Immigration, Employee Benefits & Compensation, General Immigration, Work Visas
• Author: CONVINUS
• Published date: 08 March 2023

Month-Special

The Swiss minimum wage - the biggest hurdle of a secondment?

1. Essence

In principle, all foreign employees need a work permit in Switzerland in order to be allowed to legally work here. With regard to whether a work permit is required, it must be clarified whether the employee's activity in Switzerland is defined as gainful employment within the meaning of the Federal Act on Foreign Nationals and the Integration Act.

If the activity is not defined as gainful employment requiring a permit, the employer does not have to apply for a work permit and the employee requiring a visa only has to apply for a type C Schengen visa in order to enter Switzerland.

It is justifiable to believe that the compensation would have to correspond to the equivalent Swiss minimum wage, despite employment not requiring work authorization. Not every company implements this principle in this "gray" area. Based on the statistical results that almost 50% of the companies in Switzerland are controlled by the employment office or by the various joint institutions, it is recommended to deal with the calculation of the Swiss minimum wage or the local and customary wage as this term is known from the specialist literature.

2. Regulations

The Federal Act on Accompanying Measures for Posted Workers and on the Control of Minimum Wages Provided for in Standard Employment Contracts regulates, among other things, the conditions for the remuneration of posted workers and dependent service providers within the framework of the implementation of the accompanying measures as a product of the EU Directives on Posted Workers.

This law is also the basis for the employment offices to control employers in respect to compliance with the mandatory regulations on pay, working and rest periods, minimum duration of holidays, protection for pregnant women and those who have recently given birth, protection of young people, non-discrimination, occupational health and safety as well as night and Sunday work. Violations of the Posted Workers Act are subject to government sanctions, such as:

• Administrative fines up to CHF 5'000
• Temporary service bans of 1 to 5 years
• Imposition of control costs on failing employers

Criminal sanctions are also mentioned as follows:

• Criminal fines of up to CHF 1,000,000 for systematic violations with the intent of profit
• Confiscation of assets, e.g. unlawfully obtained profits

3. Compliance with Swiss wage thresholds

The local employment of EU/EFTA nationals does...