Swiss employment law is structured into four layers. The Code of Obligations covers many core rights and duties. The Labour Act adds working time, rest rules, and health and safety. Collective bargaining agreements (CBAs) set sector rules, and some apply across an entire industry. Cantons add local regulations that matter more than people expect.
Swiss employment law looks clear and structured at first, then a tiny detail trips you up. A “discretionary” bonus tied to fixed targets turns into a dispute at year‑end. A team member works from Germany two days a week, but no one checks A1 coverage or AHV, and back payments arrive months later.
Knowing how the law works helps you see those traps early. With the right setup and documentation, you avoid that. In this guide, you’ll see what applies in daily work, where people slip up, and how to stay in control.
Collective Bargaining Agreements Explained
A CBA is a binding deal for a sector or region that sets minimum wages, hours, allowances, holidays, training rules, and sometimes termination terms. Some CBAs become binding for an entire industry by decision of the authorities.
Construction, hospitality, healthcare, cleaning, and retail often sit under a CBA. Engineering and parts of services may also be covered, depending on the role and region.
If a CBA applies, it takes priority on covered topics where it grants higher standards than the contract. Wage floors, overtime rates, and allowances are frequent triggers. SECO and the Cantons publish coverage details that you can review.
Employment Contracts in Switzerland
An employment contract is a binding agreement between an employer and an employee. It sets pay, duties, working time, benefits, and how the relationship can end. Swiss employment law accepts both written and verbal contracts. Written terms are safer and easier to apply.
Types of Employment Contracts in Switzerland
Swiss employment law allows several contract types, each with its own rules around duration, notice, pay, and protections. Choosing the right structure from the start helps avoid disputes later.
- Open-ended (Unlimited) Contracts: The most common format. These include a probation period and standard notice rules set by law, contract, or CBA.
- Fixed-Term Contracts: End on a specific date and usually have no ordinary notice unless explicitly stated. Repeated fixed-term contracts can raise legal concerns.
- Part-Time Contracts: Operate like full-time contracts, with salary, holidays, and social insurance pro-rated to working hours.
- On-Call / Zero-Hour Contracts: Require clear rules on minimum hours, availability, response time, and whether stand-by time is paid.
- Temporary Agency Work (Labor Leasing): The worker performs duties at a client company, while the agency or EOR remains the legal employer. A sector CBA may apply.
- Apprenticeships and Internships: Governed by special training or youth-employment rules. Contracts should still clearly define pay, learning objectives, duration, and supervision.
What a Swiss Employment Contract Usually Includes
Beyond the basics mentioned above, a solid contract should include:
- The start date
- Place of work and any remote‑work rules
- Reporting line
- Expense policy
- Overtime calculation and approval
- Holiday rules and public holidays for the Canton
- Any CBA reference
- Confidentiality and IP rights
- Data and equipment terms
- Bonus or commission plan with targets and payout timing
- Travel time treatment
- Termination details, such as garden leave and return of property
Keeping these points in a clearly written document reduces disputes and keeps both sides on the same page.
In Switzerland, the contract carries real weight. Swiss courts look first at what both sides agreed. Clear wording sets expectations and reduces conflict. Focus on what the document says about hours, overtime approval, bonuses and commissions, expenses, notice, and any non‑compete. Fairness matters, but clarity wins.
Verbal agreements can be valid, yet they are fragile. Put the deal in writing and keep it simple, covering the basics in plain text.
Working Hours and Overtime Rules
Planning work time in Switzerland is mostly about knowing the legal caps and tracking hours correctly. Here’s what you should know.
Standard Working Hours by Sector
Contracts often set 40-42 hours per week. The legal cap depends on the role: 45 hours for office and technical staff and large retail, and 50 hours for many other sectors. CBAs can set different frames.
Overtime vs Excess Working Time
Overtime means hours above the contract but within the legal cap. Excess working time means hours above the legal cap. The first follows the Code of Obligations; the second follows the Labour Act and is tighter.
Overtime is usually paid at the normal rate or exchanged for time off if agreed in writing or in a CBA. Excess working time often comes with a 25% premium or time off. Senior roles may have exceptions, yet they still need clear tracking rules in the contract or policy.
There are yearly and weekly ceilings set by law. Culture or “we’re in a crunch” does not override them. Track hours, get approvals, and keep records.
The Swiss Labor Act and the corresponding Federal Council Ordinances are the main sources of regulations for working hours.
Minimum Wage and Salary Rules
Switzerland has no national minimum wage under Swiss employment law. Some Cantons set their own wage floor by public vote, like Geneva and Neuchâtel. The rate depends on where the work is done and can vary by job type.
Sector agreements (CBAs) often set minimum pay by role and seniority; if one applies, its wage floor beats a lower figure in an individual contract.
In day‑to‑day pay, the contract states the base salary, sometimes with a 13th-month salary. Annual reviews are common. Put bonus and commission plans in writing with timing, targets, and how payouts are pro‑rated on entry or exit. Keep payslips clear on deductions and social contributions so people know what they’re getting and why.
Paid Leave and Time Off
Time off in Switzerland starts with legal baselines, then shifts with your Canton, contract, and any CBA. This section shows what you can rely on and what may vary.
Annual Leave and Public Holidays
The legal minimum is 4 weeks of paid vacation, or 5 weeks for employees under 20. Public holidays are mostly Cantonal, with 1 August as the national day off. Many employers give extra days by policy or CBA.
Sick Leave and Salary Continuation
Pay during sickness depends on length of service and local court scales unless the employer runs daily sickness benefits insurance (KTG/PdG). Many companies use KTG, which pays about 80% for a defined period. Keep medical certificates and timelines clean.
Family-Related Leave
Maternity leave lasts 14 weeks and is paid via EO at about 80% up to a cap. Paternity leave is 2 weeks via EO. Adoption leave is 2 weeks, where conditions are met. Parents of seriously ill or injured children get extended leave under set rules.
Special Leave
Short paid leave often covers marriage or registered partnership, bereavement, moving house, and military service. The exact days come from the contract, policy, or CBA.
Put paid leave terms in writing, checking Canton and CBA specifics, and keep certificates and records tidy to keep everything clear and dispute‑free.
Employee Termination Rules
Under Swiss employment law, the default notice period for termination is:
- 30 days in the 1st year of work
- 90 days from the 2nd through the 5th year
- 180 days starting from the 6th year
Contracts and CBAs can set different periods within the law, so write them clearly at the start. For employees under the Labour Leasing CBA, the minimum notice periods are:
- Two business days during the first 3 months (13 weeks) of employment
- Seven calendar days during the subsequent 3 months (until 26 weeks) of employment
- Thirty calendar days from the start of the 7th month of employment
Instant dismissal for serious misconduct exists but is rare and risky. Poor performance or a single mistake usually does not qualify. Document concerns, give feedback, and use proportionate steps.
Certain times block notice: illness or accident (for a set number of months that grows with service), pregnancy, and the 16 weeks after birth, and military or civil service. Trying to terminate in these windows leads to delays and disputes.
Dismissal without cause is allowed if it is not abusive and not in a protected period. Damages for abusive dismissal are capped, often a few months of pay, and reinstatement is uncommon. Statutory severance is rare today; most severance comes from a CBA or a negotiated agreement.
Employee Rights and Protections
Swiss employment law protects employees on several fronts. Equal pay for equal work and bans on sex discrimination sit under the Gender Equality Act. Data privacy rules limit what employers collect, why they process it, and how long they keep it. Employers have health and safety duties that include risk assessments, training, and safe schedules.
Abusive termination is barred. Abusive dismissal under Swiss employment law includes retaliation, discrimination, or punishing someone for using lawful rights.
A performance-based exit is acceptable when it is documented, proportionate, and non‑discriminatory under Swiss labor laws.
Employer Obligations You Cannot Ignore
Employers must meet several legal obligations under Swiss labor laws, especially regarding social security contributions (AHV, IV, ALV), pension plans, accident insurance, and payroll taxes. These obligations are non-negotiable, and failure to comply can lead to significant penalties.
- Social Security Contributions: Employers and employees share AHV (old‑age and survivors), IV (disability), EO (income loss for service and parental leaves), and ALV (unemployment). Register staff on time and pay on schedule. Keep contribution reports safe.
- Pension and Insurance Requirements: BVG/LPP pension is mandatory above a pay threshold, with employers funding at least half. Work accident insurance is mandatory; non‑work accident cover applies to staff working 8 hours or more per week. SUVA handles many sectors; private insurers cover others.
- Payroll and Record Keeping: Pay on the agreed date, issue clear payslips, keep time records, and store contracts, permits, and insurance proof. This prevents payroll disputes and supports audits.
Why a Swiss Entity Is Required
To register employees for social security, accident insurance, and other mandatory benefits, an employer must have a Swiss entity. If you don’t have a Swiss entity, you can still hire employees in Switzerland by hiring an Employer of Record (EOR). The EOR acts as the legal employer for your staff, handling payroll, tax compliance, social security contributions, and insurance obligations on your behalf.
Freelancers vs Employees
Authorities look at who controls the work, the level of economic dependency, and how integrated the person is. A person with one client, company tools, and a manager who directs daily tasks looks like an employee. A person with several clients, their own tools, and business risk looks like a contractor.
Misclassification can lead to back AHV contributions, late interest, tax issues, and corrections to insurance coverage. Labels in the contract do not decide status; the real work situation does.
Status affects accident insurance, pension fund affiliation, and liability for workplace harm. If a cross‑border contractor is actually an employee, you can face issues in both countries.
Hiring EU and Non-EU Nationals
EU/EFTA citizens benefit from free movement rules, with permits and registrations usually faster. Hiring non‑EU nationals in Switzerland requires an employer‑sponsored work permit with quotas and strict criteria. Authorities assess qualifications, Swiss/EU labor-market priority, and whether salary and conditions meet Swiss standards.
Common permits include L (short‑term), B (residence), and G (cross‑border commuter). Applications go through the Canton with federal oversight. Plan timing early, especially for non‑EU hires. EU/EFTA registrations can take from days to a few weeks. Non‑EU permits often take several weeks. In many cases, it can take 4-8 weeks plus any time needed for a visa appointment.
Sending staff to Switzerland or allowing Swiss employees to work abroad triggers wage rules, notifications, and sometimes CBA rates. Regular remote days from another country can switch social security and tax to that country.
Confirm A1/social security coverage and local reporting before agreeing to a cross‑border setup.
Practical Compliance Checklist
For Employers
- Use a short, clear Swiss contract that covers hours, overtime approval, pay, bonus rules, probation, and notice.
- Register staff for AHV/IV/EO/ALV, BVG, and accident insurance from day one.
- Track hours and keep payslips, permits, and timesheets in one place.
- Confirm any CBA and follow its wage and time rules.
For Employees
- Get pay, hours, overtime, and bonus terms in writing.
- Keep your own time records and payslips.
- Learn your Canton’s public holidays and your notice period.
- Tell HR early about sickness or family leave.
For HR and Founders
- Use Swiss templates and align them with any CBA.
- Pre‑check cross‑border work, A1 coverage, and permits.
- Keep a payroll calendar with filing dates.
- Build a short exit checklist that checks protection periods.
Common Swiss Employment Law Mistakes
Frequent issues include vague bonus mentions, no written overtime rules for office staff, ignoring a CBA wage floor, skipping sickness insurance then paying long salary continuation, late AHV/BVG/SUVA registrations, weak time tracking for night and Sunday work, giving notice during a protected period, treating a long‑term contractor like staff, and allowing cross‑border remote days without A1 checks.
When to Get Legal Advice
Employment lawyers handle disputes, exits, and complex clauses. HR or payroll advisors set policies, payroll, and benefits. An EOR provider can employ staff in Switzerland for you and manage payroll, AHV/BVG/SUVA, taxes, and permits under Swiss employment law.
What happens if an employee files a labor complaint? The case usually starts at a conciliation authority, and many disputes settle there. If not, it can move to court, where contracts, timesheets, and payroll records matter, and outcomes can include back pay or damages under Swiss employment law.
Bring in a specialist for senior exits, illness, or pregnancy during notice, non‑compete disputes, mass changes to contracts, tight CBA wage rules, or cross‑border setups. A short consult often costs less than a payroll correction.
