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Posting costs in Switzerland

  • Introduction

    • Based on the Agreement on the Free Movement of Persons between Switzerland and the EU, a company posting workers to Switzerland must comply with the standard pay and working conditions of the posting location, the profession and the industry, and observe the minimum-pay rules applicable in Switzerland. These obligations are laid down in the Posted Workers Act (PWA).

      Here you will find an overview of posting-related costs, which apply in particular to industries with a generally applicable collective employment contract containing minimum-pay requirements. How much a specific posting assignment costs depends on the relevant provisions of the applicable collective employment contract as well as the related inspections. Click on Legal -> Collective employment contracts for more details.

      The following overview contains information applicable to all industries as well as details pertaining to industries with minimum-pay requirements laid down in generally applicable collective employment contracts.

  • Minimum pay

    • At the very minimum, employers must guarantee their posted workers the working and pay conditions prescribed by Swiss federal law, Federal Council ordinances, generally applicable collective employment contracts and standard employment contracts with mandatory minimum pay (within the meaning of Art. 360a of the Swiss Code of Obligations). Click on Legal or Salary and working conditions for more details.

      Exceptions are made in two cases. The first is if the work to be performed is limited in scope. The second is in the case of assembly or initial installation work lasting less than eight days and forming part of the contract for product delivery. In these two instances, foreign companies posting workers are exempt from the minimum Swiss requirements regarding pay and holiday entitlement. This exception does not apply to construction or construction-related services, or to hotels and restaurants.

      For information on the minimum pay for each industry, click on Salary and working conditions -> Calculate minimum pay.

  • Compensation for accommodation and meals

    • Employers are required to cover posting costs such as travel, accommodation and meals. This rule is based on a statutory provision according to which the compensation granted can only be considered as a component of pay if it does not reimburse actual expenditures, for example for travel, meals and accommodation (Article 2(3) Posted Workers Act). Employers must be able to provide evidence of compensation for actual expenditures. If actual costs are unknown, fixed-rate amounts are used (see Accommodation and expenses).

  • Enforcement fees

    • Employers and workers who are party to a generally applicable collective employment contract must pay enforcement fees, which are applied towards the cost of inspecting and enforcing compliance with the contract. Foreign employers posting workers to Switzerland must also pay these fees.

      Enforcement fees are determined by criteria which vary by generally applicable collective employment contract. In some cases, a fixed-rate amount is collected; in others, the amount depends on pay. Under most collective employment contracts, fees are collected monthly.

      For details on the enforcement fees for each industry, click on Legal -> Collective employment contracts.

  • Surety bonds

    • Surety bonds cover any inspection and procedural costs, enforcement fees or contractual penalties incurred by infringing the terms of a collective employment contract. Employers posting a worker to Switzerland must obtain a surety bond if this is required by the relevant generally applicable collective employment contract.

      The amount of the surety bond depends on the total value, per calendar year, of the work performed. In general, no surety bond is required for work valued at less than CHF 2,000. The maximum surety-bond amount is CHF 10,000. The different tiers – as well as the surety-bond amount of each tier – vary by generally applicable collective employment contract. Surety bonds are handled by a Swiss central office known as the ZKVS.

      For details on the surety bonds required in each industry, click on Legal -> Collective employment contracts or visit http://www.zkvs.org/kaution (website available in German, French and Italian).

  • VAT

    • Foreign companies posting workers to Switzerland must pay Swiss VAT for any work performed in Switzerland. Companies are exempt from VAT only if their total taxable revenue earned worldwide is less than CHF 100,000 per year. Click here to register for VAT.

  • Financial consequences of infringing the Posted Workers Act

    • Employers infringing the provisions of the Posted Workers Act may be charged administrative penalties. If they infringe mandatory provisions of a generally applicable collective employment contract, they may be liable for contractual penalties in addition to the original costs. This also applies to posting companies in accordance with Article 2 of the Posted Workers Act.

  • Inspection and procedural costs

    • A generally applicable collective employment contract may contain rules for levying inspection fees in the event of a breach of contract. Where this is the case, the provisions dealing with infringements of Article 2 of the Posted Workers Act also apply to posting companies.

      Inspection and procedural costs are determined by various criteria such as the amount of pay in cases where the employer did not meet minimum-pay requirements, or any back pay settled by the employer. However, in all cases, inspection and procedural costs must be calculated so that they cover the actual time and expense, for example by using an hourly rate.

  • Contractual penalties

    • Generally applicable collective employment contracts may require a contractual penalty if the contract's provisions are infringed. Employers posting workers to Switzerland are also subject to such penalties. Contractual penalties are imposed by the joint bodies authorised to enforce collective employment contracts. The criteria for calculating contractual penalties are indicated in the relevant collective employment contract. Although these are civil penalties, the competent joint commission must give the company accused the opportunity to be heard in advance on the accusations and contractual-penalty calculation.

  • Administrative sanctions

    • Cantonal enforcement authorities can also impose administrative sanctions for infringements of the Posted Workers Act. Sanctions range from a warning or fine to a temporary ban from providing services in Switzerland, depending on the seriousness of the infringement.

      Employers committing minor infringements, such as failing to notify Swiss authorities of the posting, are warned or fined up to CHF 5,000.

      Serious infringements of the Posted Workers Act will incur a fine of no more than CHF 30,000 or can result in a temporary ban from the Swiss market. Examples of serious infringements are egregious violations of minimum-pay provisions or non-payment of a legally effective fine imposed in accordance with the Posted Workers Act. Anyone temporarily banned from the Swiss market may not provide services in Switzerland during the exclusion period, which for repeat offences may be up to five years. In addition, companies that have been temporarily excluded from the Swiss market with legal effect will be listed on an openly accessible resource (see Sanctions).

      The Swiss State Secretariat for Economic Affairs (SECO) has issued sanction recommendations for use by cantonal authorities. These recommendations can be consulted in either German, French or Italian by visiting https://www.seco.admin.ch/seco/de/home/Arbeit/Personenfreizugigkeit_Arbeitsbeziehungen/freier-personenverkehr-ch-eu-und-flankierende-massnahmen/weisungen-und-informationen.html.

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