The secondment to Switzerland of employees whose employer is based abroad is administrated by the Federal Law of 8 October 1999 concerning minimum wage and working conditions for posting workers to Switzerland and side measures (LDist) and by the Ordinance of 21 May 2003 concerning posting workers in Switzerland (ODist).
Submission of the notification of posting to Switzerland
Cantonal Authorities must be notified at least 8 days before the beginning of the work activity in Switzerland. The notification must be sent to the competent cantonal authorities in the destination area.
However, there are some exemptions related to the notification obligation:
every company can benefit from the exemption from the notification obligation for 8 days per calendar year.
The exemption applies to both the posting company and the posted workers. Nevertheless, the exemption does not apply for activities in the following fields:
- hotel and restaurant industry;
- industrial and house cleaning;
- surveillance and security services;
- itinerant trade.
Every company has 90 days per calendar year for the notification procedure. Once said available days are over, companies must request a work permit in order to perform activities in Switzerland.
Some derogations allow to avert the 8-days in advance period. In these cases, companies must send the notifications maximum 1 day before of the beginning of the activity.
A1 certificate to post workers to Switzerland
The competent social insurance agency in the home country issues A1 certificates. It consists of a standard form that each country grants in its official language(s). This document states in which country the holder pays for social security contributions. Consequently, the holder is exempt from the payment of these contributions in the host country.
A1 certificates are mandatory in all EU and EEA countries, including Switzerland. Employers must verify which entity they should apply to and follow the related instructions to apply for the certificate.
Compliance of the Swiss minimum wage and working conditions
A national minimum wage level does not exist in Switzerland.
Posting companies must meet the minimum wage levels defined by the collective agreements applicable to each canton.
For this reason, Arletti & Partners suggests the processing of a gross notional payslip for every secondment, according to the period of permanence in Switzerland.
Additional obligations for secondments to Switzerland
Since January 2018, foreign companies performing services in Switzerland must subscribe for VAT purposes in Switzerland. This only applies to companies with an overall turnover higher than CHF 100.000 per calendar year.
Besides, these companies will have to name a tax representative domiciled in Switzerland. Indeed the representative could act as contact person with the competent authority and could process the quarterly reports on the company’s behalf.
The registration procedure shall also include the submission of a bank guarantee to cover what is due. Cash deposit is also valid as a bank guarantee.
According to the different canton and to the workers’ branch of activity, a deposit might be required. In particular, it represents a guarantee for the coverage of contractual penalties, control costs and payment of contributions to the Compensation Fund.
Switzerland allows subcontracting under the following conditions:
- Existence of a contract between the client and the primary subcontractor. This agreement includes a clause allowing the subcontracting of the work in question to a third party (subcontracting of the subcontract);
- Existence of a contract between the first subcontractor in the chain and the other subcontractors in the chain to carry out the work covered by the contract referred to in point (a).
The Swiss legislation governing the redistribution of work described above (second-tier subcontracting) places a duty of care on the primary contractor when assigning work to subcontractors (Sec. 4. Art 8 O Dist). In particular, the primary contractor’s obligations include ensuring that the subcontractors entrusted with the performance of the work under the contract are likely to comply with working and wage conditions.
Self-employed workers posted to Switzerland
To be considered as such, self-employed workers must meet the requirements laid down by Swiss law (independence of means, autonomous organisation of work, etc.). As a matter of fact, during their secondment these workers must be able to provide documents attesting to their self-employed status in the event of a check.
If the competent cantonal authority does not consider that the principle of autonomy of the self-employed worker as satisfied, the latter may be assimilated as an employee of the client.
Moreover, a further issue concerns the prohibition to work in conjunction with the client’s employees. As confirmed several times by the Labour Oversight Office, Swiss Law considers this situation as impermissible, since it implies the non-satisfaction of the worker’s principle of autonomy. In such cases, the worker be immediately considered as pseudo autonomous and, consequently, as a client’s employee.
Risk and Penalties for non-compliance of posting workers to Switzerland
Companies failing to submit the notification of posting on time (8 days) could risk fines of up to CHF 5.000.
Violations in terms of wage and working conditions can result in penalties for the employer up to CHF 30.000. In this case, companies also risk the prohibition to work in Switzerland.
In case of reiterated violations, the ban can last up to 5 years and the company could be included in a public black list by the Swiss authorities.