Employment Law in Switzerland

Contracts

In Switzerland, employment contracts can be fixed-term or permanent, depending on the nature of the job and the agreement between the employer and employee. Permanent employment contracts must include benefits such as paid leave, social security contributions, and pension schemes. Fixed-term employees are entitled to the same benefits as permanent employees, and successive fixed-term contracts without objective justification may be considered permanent.

Switzerland also has apprenticeship contracts, mainly for training, which are governed by the Vocational Education and Training Act. Employers engaging apprentices are required to: 

• Provide structured training aligned with approved curricula
• Pay apprentices a stipend in line with government regulations
• Ensure apprentices work in a safe environment
• Adhere to regular working hours as defined by labor standards

Termination and notice periods

In Switzerland, labor laws generally require a written notice for termination, with notice periods varying based on the employee's length of service. One month's notice is required for one year of service; two months' notice is required for two to nine years of service; and three months' notice for more than nine years of service. In most cases, terminated employees are entitled to a warning and a fair hearing. Just cause for a dismissal includes the following:

• Theft
• Disorderly behavior
• Bribery
• Insubordination
• Habitual negligence of duty
• Lack of capability
• Financial irregularities  

Employees are generally not entitled to severance pay unless specified in the employment contract or collective bargaining agreement. There is no statutory gratuity payment in Switzerland; however, additional compensation may be provided based on employment contracts or collective agreements. As your Employer of Record (EOR) in Switzerland, we can assist you in managing employee terminations by providing legal guidance and a personalized process to ensure compliance with labor laws and minimize legal risks.

Probation periods

In Switzerland, probation periods are indirectly addressed in local law, typically lasting between one and three months in the private sector, and similar durations apply in government employment, as per the Swiss Code of Obligations.

Working hours and overtime

The standard working week in Switzerland typically consists of 40 to 44 hours, spread across five days, with a legal maximum of 45 hours per week for office and industrial workers, and 50 hours per week for other sectors. Employees are entitled to 11 consecutive hours of rest between working days and at least one full day off per week, typically including Sunday.

Any work beyond the standard working time is considered overtime. Swiss law limits overtime to 170 hours per year for employees with a 45-hour workweek, and 140 hours per year for those with a 50-hour workweek. Overtime must be compensated at a rate of 125% of the regular wage or with equivalent time off, unless otherwise agreed upon.

Taxes

In Switzerland, withholding tax is known as Quellensteuer and is deducted by employers before paying salaries to employees. Employers must deduct wage tax from employee salaries based on applicable cantonal and federal tax rates and submit it to the local tax authorities.

Employer payroll contributions

Switzerland's social security system requires employer contributions that are dependent on the total number of employees, and these contributions cover pensions, medical care, disability insurance, and gratuity payments. In addition, workers' compensation is financed by contributions from state governments, employers, and employees.