Looking for an Employer of Record in Switzerland? Here’s what you need to know

Knowing how best to engage and pay employees in Switzerland can be difficult. Global companies sometimes use an Employer of Record (EOR) to compliantly onboard talent in a new country. However, using an Employer of Record in Switzerland may not be applicable. 

Instead, companies can use a workforce management platform, like Payoneer Workforce Management, to help streamline the process.

Find out more about Payoneer Workforce Management, or read on to see what managing a Switzerland payroll system entails.

How to hire employees in Switzerland

There are three options for companies looking to hire and pay employees in Switzerland.

1. Set up a local entity: Companies can register a local subsidiary to employ Swiss workers, but this takes considerable time and effort.

2. Hire independent contractors or freelancers: Working with contractors offers flexibility and minimizes compliance obligations. However, the roles shouldn’t look like an employee-employer relationship, or you risk misclassification and penalties.

3. Workforce management platform: Companies can use a workforce management platform to engage and pay employees in Switzerland without a local entity and receive support with onboarding, management, and compliance responsibilities.

Payoneer Workforce Management is a great option for companies looking to engage Swiss talent. We assist you setup localized benefits as per local laws and requirements and help you in mitigating risks related to contractor misclassification.

How to onboard employees in Switzerland

Onboarding is a vital part of the process when you engage international talent. It’s your chance to set the new employee up for the greatest success, as well as fulfil the legal and regulatory obligations.

The process of onboarding an employee in Switzerland typically involves.

• Payroll setup and mandatory benefits activation: Add new candidates to the local payroll system and complete all required enrollments for statutory benefits in accordance with local labor laws.
• Equipment handover and workspace readiness: Provide local talent with the devices and tools they need, ensuring everything is configured so they can start working without interruption.
• First‑week onboarding overview: Conduct an orientation in the employee’s initial week to walk them through company processes, onboarding milestones, and role‑specific expectations.
• Introductions to team and broader organization: Schedule meetings that help the new employee meet their immediate team and connect with colleagues across various departments.

Payoneer Workforce Management enables companies to compliantly engage talent across borders through its technology platform.

Pay employees in Switzerland

In Switzerland, the pay date is the last day of the month, and payments must be made in Swiss Francs (CHF). The minimum wage varies from CHF 19 to CHF 24.32 per hour, depending on the canton.

As part of the Switzerland payroll process, employers need to deduct income tax (according to the personal situation of the employee and the canton). Employers also contribute 5.3% to social security.

Payoneer Workforce Management’s unified, all-in-one platform gives you a single dashboard to manage your entire global workforce and enables you to pay contractors in just a few clicks.

Employment laws in Switzerland

Anyone employing workers must always comply with local laws and regulations. Here are some of the laws to be aware of when hiring employees in Switzerland.

• Working hours: 40 hours per week
• Overtime hours: Permitted with a supplement of at least 40% for overtime work
• Probation: Up to 6 months

Companies can get support to stay compliant with Switzerland payroll and labor laws by using Payoneer Workforce Management’s infrastructure.

Minimum wage in Switzerland

There is no national minimum wage in Switzerland. Instead, it varies by canton. Here’s a breakdown:

• CHF 19 per hour in Ticino
• CHF 20 per hour in the Jura 
• CHF 20.08 per hour in Neuenburg
• CHF 24.32 per hour in Geneva 

Employment contracts in Switzerland

Both the employer and the new employee need to sign an employment contract, which lays out the rights and obligations that apply to both parties.

The signed contract must include the following information:

• The names of the employee and the employer
• The date of commencement of the employment relationship
• The employee’s function
• The salary and any allowances
• The weekly working hours
• The length of probation 

In the case of a fixed-term contract, the employer must clearly state the date that the contract ends. Additional rules must also be included in the contract, such as a ban on competition or the regulation of overtime.

Onboard talent quickly and securely with localized contracts and payroll with Payoneer Workforce Management.

Leave policy in Switzerland

Switzerland sets minimum levels of leave that employers must give their employees, including vacation time, public holidays, and more.

Vacation leave and public holidays

Employees in Switzerland are entitled to 20 working days (4 weeks) of paid vacation in their 1st year of employment, and 25 days after 1 year of employment. They can carry over up to 10 days per year.

There are also 12 public holidays in Switzerland. 

Sick leave

Switzerland does not have a standardized nationwide sick leave policy. Instead, this is defined by the employment contract. Usually, 15 days are paid by the employer after National Insurance Scheme coverage. 

Parental leave

Mothers are entitled to 14 weeks of maternity leave. Partners are entitled to 2 weeks of paternity leave, to be taken within 6 months of the child’s birth. 

Other leave

Swiss employees are also eligible for a range of other types of leave. 

• Compassionate leave: 1 to 3 days for the death of a spouse/registered partner, children, parents, parents-in-law, grandparents, or siblings (from death to burial)
• Wedding leave: 3 days for their own wedding or 1 day for the wedding of parents, children, or siblings
• Military recruitment: Up to 3 days (after deployment)
• Relocation leave: 1 day if moving within the region of residence or 1.5 to 2 days if moving further away
• Job search leave after termination: Up to 2 days 

Work permit in Switzerland

Rules relating to work permits vary depending on the country of origin, but citizens of EU/EFTA member states may enter, live, and work in Switzerland. 

For more information, please visit the Swiss government website.

Background check in Switzerland

A background check may be carried out before engaging an employee. This can include things like a criminal check, employment and education history, and social media usage. Generally, the employer has to ask the employee for consent and disclose what they are checking.

Employment termination in Switzerland

Employment termination in Switzerland can be complicated, with different reasons for dismissal and different notice periods required for each. 

Termination scenarios include:

• Ordinary dismissal
• Dismissal for good cause
• Employee-initiated termination
• Termination by mutual consent
• Automatic termination of fixed-term employment

Notice periods

During the probationary period, a notice period of 14 days must be given. 

After probation, the notice period starts at 1 month for employees with up to 5 years of service and increases with seniority, with a period of up to 6 months for employees with over 10 years of service (though this may vary based on age). 

Written notice must be provided to the employee, with the notice period start date beginning on the 1st day of the month following the month in which the notice letter is issued.

Severance pay

Severance pay is legally required if the employment tenure is 20 years or more, and the employee is at least 50 years old. The amount must be mutually agreed, and be at least 2 months’ salary. 

In cases of abusive termination established by a court, the employee may be entitled to up to 6 months’ salary as indemnification.

Company registration in Switzerland

Before engaging employees in Switzerland, some businesses choose to register a company in the country. Rules vary according to the business entity, sole trader, general or joint partnership, corporations, and limited liability companies, so it’s best to check the official website to see what the process entails.

However, in general, a workforce management platform is a quicker option when engaging talent in Switzerland. Payoneer Workforce Management enables compliant onboarding of talent in 160+ countries without having to set up a legal entity.

PEO in Switzerland

A PEO is designed to help you with HR and admin tasks for talent you already employ through your local entity.

While some countries allow the use of EORs, in Switzerland, companies can use compliant workforce management solutions. These platforms help manage HR and compliance processes for companies without a local entity. This is invaluable for international companies seeking global talent.

Explore Payoneer Workforce Management services in Switzerland

Working with a partner like Payoneer Workforce Management helps support global operations and access local talent. 

Our unified platform offers assistance with:

• Onboarding & offboarding
• Payroll and taxes
• Benefits
• Timesheets and more

Book a demo to find out more.

FAQs

1) Are there EORs in Switzerland?

EORs in Switzerland may not be an applicable model. However, companies can use a workforce management platform to streamline the process of onboarding talent.

Payoneer Workforce Management enables compliant onboarding of talent in 160+ countries without having to set up a legal entity. We assist you in mitigating risks related to contractor misclassification. 

2) How much does it cost to hire Swiss talent?

Typically 11% on top of the salary, which excludes the pension plan employer contribution, as may be agreed by the parties. Additional gross compensation to the employee will be subject to general taxation, and employer taxes will apply. You can use our cost calculator tool for a detailed breakdown.

3) Why hire Swiss talent through a workforce management platform?

Payoneer Workforce Management allows you to onboard and pay talent across the globe in 70+ currencies, without setting up a local entity. For more details, please get in touch.