Employer of Record Guide in 

Switzerland

Vacation Leave

• Standard Entitlement: Minimum 4 weeks (20 working days) per year
• Young Workers: 5 weeks for employees under 20 years old
• Senior Workers: 5 weeks for employees over 50 years old (in some cantons)
• Accrual: Earned proportionally throughout the year
• Payout: Must be paid out on termination if unused

Sick Leave

Sick leave entitlement depends on length of service:

• Medical Certificate: Required after 3 consecutive days
• Salary Continuation: Full salary during sick leave period

Maternity Leave

• Duration: 14 weeks (98 days)
• Compensation: 80% of average salary (up to CHF 220 per day)
• Funding: Paid through social security (EO/APG)
• Job Protection: Position guaranteed upon return

Paternity Leave

• Duration: 2 weeks (10 working days)
• Compensation: 80% of average salary (up to CHF 220 per day)
• Timing: Must be taken within 6 months of birth
• Funding: Paid through social security (EO/APG)

Military/Civil Service Leave

• Entitlement: Mandatory for Swiss men (optional for women)
• Compensation: 80% of salary through income compensation scheme
• Duration: Varies based on service requirements

Other Leave Types

• Bereavement: 1-3 days (varies by relationship and canton)
• Marriage: 1-3 days
• Moving: 1 day
• Medical Appointments: Reasonable time off

Summary

Termination Types

Termination With Cause (Extraordinary Termination):

• Immediate termination without notice
• Requires serious breach of contract or misconduct
• High burden of proof on employer

Termination Without Cause (Ordinary Termination):

• Standard termination with proper notice
• No specific reason required
• Must comply with notice periods and anti-discrimination laws

Notice Period Requirements

Notice periods are based on length of service and probationary status:

Note: Notice periods end on the last day of a calendar month.

Severance Pay

Switzerland does not mandate severance pay beyond the notice period. However:

• Collective bargaining agreements may require severance
• Individual contracts may include severance clauses
• Courts may award severance in cases of abusive dismissal

Probationary Periods

• Maximum Duration: 3 months
• Notice Period: 7 days during probation
• Restrictions: Cannot be extended beyond 3 months
• Protection: Anti-discrimination laws still apply

Final Pay Requirements

• Timing: Final salary must be paid by the end of the month following termination
• Components: Includes unused vacation pay, pro-rated 13th month salary, and any outstanding bonuses
• Work Certificate: Employer must provide a work certificate upon request

Anti-Discrimination & Wrongful Dismissal

Termination is prohibited during:

• Sick leave periods
• Maternity leave
• Military service
• For discriminatory reasons (gender, age, religion, etc.)

Violations can result in compensation awards of up to 6 months' salary.

National Public Holidays

Switzerland has relatively few national public holidays, with most holidays determined at the cantonal level:

Cantonal Variations

Each canton determines its own public holidays:

Holiday Pay Rules

• Eligibility: All employees entitled to holiday pay
• Rate: Regular daily wage
• Working on Holidays: Double pay (200%) plus compensatory day off

Required Documentation

Employment Contract Elements:

• Job title and description
• Salary and benefits
• Working hours and location
• Notice periods
• Probationary period terms
• Applicable collective bargaining agreement

Government Forms:

• Work Permit: Required for non-EU/EFTA nationals
• Social Security Registration: AHV number assignment
• Tax Registration: Cantonal tax office notification
• Accident Insurance: Mandatory coverage enrollment

Work Authorization Requirements

EU/EFTA Citizens:

• Can work freely but must register with authorities
• Residence permit required for stays over 3 months

Non-EU/EFTA Citizens:

• Work permit required before employment begins
• Employer must demonstrate no suitable EU/EFTA candidate available
• Annual quotas apply

Banking & Payment Setup

• Bank Account: Swiss bank account typically required for salary payments
• Currency: All payments in Swiss Francs (CHF)
• Payment Method: Bank transfer standard

Language Requirements

Switzerland has four official languages:

• German: Spoken in 65% of the country
• French: Spoken in 18% of the country
• Italian: Spoken in 8% of the country
• Romansh: Spoken in 0.5% of the country

Employment contracts should be in the local language of the workplace.

Data Protection Compliance

• Federal Data Protection Act (FADP): Governs personal data processing
• Employee Consent: Required for data collection and processing
• Cross-border Transfers: Restricted to countries with adequate protection

Onboarding Timeline

Worker Classification

Swiss law distinguishes between employees and independent contractors:

Employees:

• Work under employer direction and control
• Integrated into company operations
• Receive regular salary and benefits
• Covered by social security and labour laws

Independent Contractors:

• Work autonomously with minimal supervision
• Provide services to multiple clients
• Invoice for services rendered
• Responsible for own social security contributions

Note: Misclassification can result in retroactive social security contributions and penalties.

Collective Bargaining Agreements

Many Swiss industries are covered by collective bargaining agreements (GAV/CCT):

• Coverage: Approximately 50% of Swiss workforce
• Scope: Wages, working conditions, benefits
• Binding: On all employers in covered sectors
• Examples: Construction, hospitality, retail, banking

Cultural Workplace Norms

Communication Style:

• Direct but polite communication
• Punctuality highly valued
• Formal address (Sie/vous) common initially

Work-Life Balance:

• Respect for personal time
• Limited after-hours communication
• Generous vacation time utilisation expected

Hierarchy:

• Relatively flat organisational structures
• Consensus-building approach to decisions
• Respect for expertise over position

Remote Work Considerations

Legal Framework:

• No specific remote work legislation
• Standard employment laws apply
• Employer responsible for workplace safety

Cross-Border Remote Work:

• Complex tax and social security implications
• Bilateral agreements may apply
• Professional advice recommended

Equipment & Expenses:

• Employer typically provides necessary equipment
• Home office expense reimbursement varies
• Clear policies should be established

What Borderless AI Handles

When you hire through Borderless AI in Switzerland, we manage:

• Local employment contract creation and compliance
• Work permit applications and renewals
• Social security registration and contributions
• Payroll processing in Swiss Francs
• Tax withholding and reporting
• Mandatory insurance enrollment
• Ongoing compliance monitoring
• Local HR support and guidance

Note: Please verify all regulatory details with current Swiss employment law, as requirements may have changed since this guide was prepared.