The posting 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).
Swiss standards on the posting of workers mirror those provided by EU Posted Workers Directives and, in particular, by Directive 96/71/EC.
Submission of the notification of posting to Switzerland
Cantonal Authorities must be notified at least 8 calendar days before the beginning of the work activity in Switzerland. The notification must be sent must be sent through EasyGov and is processed by the competent cantonal authorities in the destination area.
However, there are some exemptions related to the notification obligation:
activities lasting no more than 8 days in total per calendar year may be exempt from notification.
The exemption applies to both the posting company and the posted workers. Nevertheless, the exemption does not apply for activities in the following fields:
- building, including civil engineering and ancillary construction trades;
- landscaping;
- hotel and restaurant industry;
- industrial and house cleaning;
- surveillance and security services;
- itinerant trade.
Every company has 90 effective working 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 work to begin before the end of the 8-day advance notification period. In recognised urgent cases, companies must send the notifications before work begins. The urgency must be justified in the notification and satisfy the applicable requirements.
The notification procedure described above generally applies to employees posted by companies established in EU/EFTA countries.Â
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 with 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 collective agreements declared generally binding and standard employment contracts with binding minimum wages applicable to the assignment..
Posting companies must also comply with the applicable requirements concerning working time, rest periods, holidays, health and safety and other working conditions. Reimbursements of posting-related travel, accommodation and meal expenses do not count as wages.
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 postings to Switzerland
Since January 2018, foreign companies making supplies subject to Swiss VAT may be required to register for VAT purposes in Switzerland where their relevant worldwide annual turnover reaches at least CHF 100,000.
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 VAT returns on the company’s behalf.
The Federal Tax Administration generally no longer requires foreign companies to provide a guarantee when registering for VAT. However, it may require a guarantee subsequently in the circumstances provided by law.
According to the applicable generally binding collective agreement and its scope, a separate deposit might be required. In particular, it represents a guarantee for the coverage of contractual penalties, control costs and contributions specified in that agreement. This deposit is distinct from any VAT guarantee.
Subcontracting
Switzerland allows subcontracting under the following conditions:
- Existence of a contract between the client and the main contractor. This agreement includes a clause allowing the subcontracting of the work in question to third parties;
- 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 1.
The Swiss legislation governing the redistribution of work described above (second-tier subcontracting) places a duty of care on the main contractor when assigning work to subcontractors (Art. 5 LDist and Arts. 8a–8c ODist, particularly Arts. 8b and 8c). In particular, the main contractor’s obligations include ensuring that the subcontractors entrusted with the performance of the work under the contract demonstrate compliance with working and wage conditions.
Self-employed workers providing services in 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 classified as an employee.
Moreover, a further issue concerns working closely and continuously with the client’s employees. This may indicate integration into the client’s organisation and therefore a lack of genuine independence, but it is not an absolute prohibition. Swiss authorities assess the overall working relationship, including instructions, organisational independence and entrepreneurial risk.Â
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.