So you want to hire in Switzerland. That’s great. But you should know that hiring in Switzerland is different from hiring in your home country. There’s a whole laundry list of labor laws to catch up on, lawyers to contract, compliance issues to navigate… And it can get complex. So we’ll break it down in simple terms.
If you want to successfully hire in
Switzerland
, you have two options:
Laws about hiring contractors are significantly more simple in
Switzerland
. Onboarding talent takes days, not weeks or months. Both you, the company, and your talent have more flexibility. And in many cases, since you’re remote, the talent you’re hiring is better classified as a contractor, anyway. Of course, it’s not possible in every case, but it’s what we built Panther for.
This is the long route. You can either establish a physical presence with an entity and register as an employer, or you can use an Employer-of-Record (EOR) solution. Odds are, you’ll find using an EOR to be the easier route. Still, using an EOR in
Switzerland
is expensive—it can often be $500 per month per employee—and sometimes prone to lengthy onboarding times.
Hiring contractors is normally the easier, faster, more flexible choice—but don’t just take it from us. Below are the specific benefits and drawbacks to hiring contractors in
Switzerland
.
Hiring employees takes months, at the minimum. When you hire with Panther’s locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It costs just $0 to sign up for Panther, then $49 per month to hire your contractors with Panther. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
Hiring contractors in
Switzerland
means you’re generally not on the hook for things like health insurance and paid time off. This makes hiring flexible for you, and it gives your talent more options.
Hiring employees is a bigger commitment, and generally puts you at a bigger risk for legal fees. When you hire contractors overseas, your biggest risk is misclassification—but even then, misclassification penalties are often minimal and just require you to pay off any compensation that the person would have been owed as an employee.
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
If you’re hiring contractors in
Switzerland
, you can pay them with Panther in a single click. You won’t need to worry about complicated wire transfers, fees, or currency conversions. We’ll take care of it all. Just make a click and your contractor will get paid in their currency of choice. This is a valuable bonus for talent in countries where the local currency is particularly weak—most people appreciate the ability to receive their payment in stronger currencies.
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in Switzerland than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in Switzerland.
Employees over the age of 20 receive 4 weeks of paid holiday. Under the age of 20, they receive 5 weeks of paid holiday.
Geneva has 9 public holidays.
Employees are entitled to continuous salary payments for a certain period of time depending on their years of service (three weeks during the first year of service). Alternatively, employers may take out a daily benefits insurance scheme, under which employees usually receive 80% of their last salary for a maximum of 720 days.
Maternity allowance is given to employees who have contributed to the OASI for at least 9 months preceding the delivery and have worked for at least five months.
Mothers (both full-time and part-time employees) are paid 80% of their wages in the form of a daily allowance for 98 days (up to a maximum cap of SFr 196 per day). However, Geneva law provides an additional two weeks, amounting to a total of 16 weeks.
Fathers in Switzerland are entitled to 10 days of paid paternity leave. They can take paternity leave in a single period or as individual days but must use the leave within six months after the baby’s birth.
Paternity leave benefits will equal 80% of the employee’s average salary prior to the baby’s birth but will be capped at a total of CHF2,744, or CHF196 per day.
Termination in Switzerland has the principle of freedom of dismissal, making it possible to terminate a contract of employment without there being an important reason, provided that such termination is not discriminatory or abusive. The reason for the dismissal must be explained when the other party requests it. Even if the dismissal is valid through oral termination, it is advisable to do so in writing for evidentiary purposes.
Termination is considered legally valid from the moment the recipient receives it.
The statutory notice periods are as follows:
Alternatively, the parties can contractually agree on a notice period.
A fixed-term employment contract ends on the expiry of the agreed period.
An employee is entitled to severance pay if it is stated in their contract, or if they are over the age of 50 and have worked in the company for at least 20 consecutive years. Severance payment is two month’s of salary.
Contractually agreed working hours are 40 or 42 hours per week. Depending on the field of work, the maximum number of working hours a week is either 45 or 50 hours.
Overtime work is compensated at 125% of the regular pay rate, or time off is given in lieu of payment.
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