The Complete 2025 Guide to Labour Laws in Switzerland for Global Companies

Switzerland is known for its highly skilled workforce, economic stability, and business-friendly climate, making it a top destination for global companies. However, before hiring talent in the Swiss market, it’s essential to understand and comply with Labour Laws in Switzerland. This guide offers a detailed overview of Swiss employment regulations, contract types, working hours, wages, benefits, terminations, and how an Employer of Record (EOR) in Switzerland can help your company hire efficiently and compliantly.

Table of Contents

• Overview of Labour Laws in Switzerland
• Employment Contracts in Switzerland
• Working Hours and Overtime Rules
• Minimum Wage and Salary Regulations
• Social Security and Payroll Contributions
• Leave Entitlements and Public Holidays
• Termination and Severance Rules
• Employee Benefits and Additional Perks
• Anti-Discrimination and Equal Treatment Laws
• Labour Law Compliance Tips for Global Employers
• Why Work With an Employer of Record (EOR) in Switzerland
• Conclusion
• FAQs

Overview of Labour Laws in Switzerland

Swiss labour law provides a balanced framework that safeguards employee rights while granting flexibility to employers. The primary legal sources include the Swiss Code of Obligations (CO), Labour Law (Arbeitsgesetz / Loi sur le travail), and collective labour agreements (CLAs). These laws are enforced by federal and cantonal labour inspectorates.

Switzerland follows a decentralized structure where certain employment aspects can vary between cantons, but national law remains the foundation. Labour laws are aligned with international standards, including conventions from the International Labour Organization (ILO).

Employment Contracts in Switzerland

Swiss law recognizes both written and verbal employment contracts, but for clarity, legal certainty, and enforceability, written agreements are strongly recommended—especially when dealing with international employees, fixed-term roles, or non-standard working arrangements. A written contract serves as a mutual reference point and minimizes the risk of disputes between the employer and the employee.

Essential elements that every compliant Swiss employment contract should include:

• Job title and responsibilities: A clear description of the employee’s role, primary duties, reporting structure, and expectations within the organization.
• Salary and benefits: Gross monthly or annual compensation, payment frequency, and details of any bonuses, incentives, or non-cash benefits (e.g., meal vouchers, transport reimbursements).
• Weekly working hours: Stipulation of the standard working hours per week, and whether the position qualifies for flexible, shift-based, or on-call scheduling.
• Start date and notice periods: The official employment commencement date and the duration of notice periods for both employer and employee in case of resignation or dismissal.
• Probationary period: If applicable, the length of the trial period (usually one to three months), during which notice periods are shorter and performance is closely evaluated.

Common types of employment contracts in Switzerland include:

• Permanent (open-ended) contracts: These are the default and most stable employment form in Switzerland, providing long-term security and full statutory protections.
• Fixed-term contracts: Used for roles with a clearly defined project scope or temporary need. These contracts must specify the exact end date and cannot be repeatedly renewed without valid justification.
• Part-time contracts: Agreements for reduced working hours relative to a full-time schedule. All statutory protections apply proportionally.
• On-call or zero-hour contracts: Suitable for irregular work arrangements where the employee is called in as needed. These must be carefully structured to avoid classification as disguised full-time employment.

Employers are encouraged to tailor employment contracts to the specific requirements of the canton where the employee is located, especially since collective labour agreements (CLAs) or local customs may impose additional obligations or entitlements. Aligning contract terms with cantonal laws and relevant CLAs helps ensure full compliance with Labour Laws in Switzerland and minimizes legal risks. For international companies unfamiliar with Swiss employment law, working with a local legal expert or an Employer of Record (EOR) in Switzerland can ensure contracts are drafted correctly and in line with both federal and cantonal regulations.

Working Hours and Overtime Rules

The standard workweek in Switzerland typically ranges between 40 to 44 hours, depending on the industry and CLA. However, the maximum allowable working time is:

• 45 hours/week for office, technical, and industrial staff
• 50 hours/week for other sectors

Employees are entitled to:

• 11 hours of daily rest
• At least one full day off per week (usually Sunday)

Overtime:

• Paid at a premium of 25% above the regular wage unless compensated with time off
• Employers must document overtime accurately and respect sectoral CLA limits

Minimum Wage and Salary Regulations

Switzerland does not have a nationwide statutory minimum wage. Instead:

• Several cantons (e.g., Geneva, Neuchâtel, Jura) have set legal minimum wages
• Salaries in most sectors are defined by CLAs or market rates

Employers must ensure that salaries:

• Reflect the employee’s qualifications and experience
• Are paid in Swiss francs (CHF)
• Include mandatory benefits and deductions

Transparent salary practices and proper payslip issuance are required by law.

Social Security and Payroll Contributions

Both employers and employees contribute to Switzerland’s comprehensive social security system. Contributions fund:

• Old-age and survivors’ insurance (AHV/AVS)
• Disability insurance (IV/AI)
• Unemployment insurance (ALV/AC)
• Pension funds (BVG/LPP)
• Accident insurance (UVG/LAA)
• Health insurance (individual responsibility, not payroll-based)

Approximate contribution rates:

• Employers: ~12%–15% of gross salary
• Employees: ~12%–15% of gross salary

Employers are responsible for registering employees with the correct institutions and remitting contributions on time.

Suggested Read: EOR Switzerland: Ultimate Guide on Employer of Record 2025

Leave Entitlements and Public Holidays

Switzerland offers a generous and structured leave framework to promote employee well-being, work-life balance, and social responsibility. Leave entitlements are governed by the Swiss Code of Obligations, cantonal rules, and collective labour agreements (CLAs), which often enhance statutory minimums.

Annual Leave

Employees in Switzerland are legally entitled to a minimum of four weeks (20 working days) of paid annual leave per calendar year. For employees under the age of 20, the entitlement increases to five weeks to support youth development and personal well-being.

Many employers, especially in sectors covered by CLAs or those aiming to attract top talent, voluntarily offer additional paid leave—often five to six weeks in total. Seniority, role level, or specific contractual arrangements may also lead to enhanced vacation entitlements.

Key points include:

• Vacation days must be used during the calendar year or shortly thereafter unless postponed for valid reasons.
• Employers must schedule leave in consultation with employees and respect family obligations or religious observances.
• Payment in lieu of unused vacation is not allowed during employment, except in the case of termination.

Sick Leave

Swiss law requires employers to continue paying salaries during periods of illness, particularly during the first year of employment. The statutory minimum is three weeks of paid sick leave in the first year, with longer durations based on years of service, company policies, or regional guidelines.

To manage financial risk from extended absences, most employers take out daily sickness benefits insurance, which covers a portion (usually 80%) of the employee’s salary for up to two years, depending on the policy.

Key considerations:

• Employees must provide a doctor’s certificate as soon as possible to validate their absence.
• During the notice period, employees on sick leave are protected from dismissal for a limited time.

Maternity and Paternity Leave

Switzerland ensures social support for working parents through federal parental leave schemes:

• Maternity Leave: Female employees are entitled to 14 weeks of paid leave at 80% of their average salary, funded through the income compensation (EO) scheme. Employers are prohibited from terminating employment during pregnancy and for 16 weeks after childbirth.
• Paternity Leave: Fathers receive 2 weeks of paid leave, also at 80% salary, which they can use within six months of the child’s birth. This paid leave is split into individual days or full weeks based on the employee’s preference.

Some employers offer extended or more flexible family leave as part of their internal policies or collective agreements.

Public Holidays

Public holiday entitlements in Switzerland are canton-specific, with only Swiss National Day (August 1) recognized as a federal public holiday across the country.

Each canton—such as Zurich, Geneva, Vaud, or Ticino—sets its own list of public holidays, typically ranging between 8 to 15 days per year. Common holidays include:

• Easter Monday
• Ascension Day
• Whit Monday
• Swiss Federal Fast
• Christmas and Boxing Day (December 25 & 26)

Key considerations for employers:

• Public holidays are paid days off for full-time and part-time employees, unless otherwise agreed.
• If employees work on a public holiday, they are typically entitled to additional compensation or compensatory time off.
• Employers must track regional variations in public holiday calendars when managing payroll and workforce schedules.

For international businesses managing teams across different Swiss cantons, partnering with an Employer of Record (EOR) in Switzerland ensures accurate administration of leave policies and public holiday entitlements in full compliance with local labour laws.

Termination and Severance Rules

Terminating an employment relationship in Switzerland requires careful adherence to legal procedures to ensure compliance and fairness. While Swiss labour law provides a relatively flexible termination framework compared to other European countries, employers must still respect notice periods, protected periods, and any contractual or collective agreement obligations.

Notice Periods

Unless a longer or different notice period is specified in the individual employment contract or an applicable collective labour agreement (CLA), the Swiss Code of Obligations defines standard notice periods based on the duration of the employee’s service:

• During probation (typically the first month): Either party may terminate the contract with 7 calendar days’ notice.
• After probation – 1st year of service: 1 month’s notice, effective at the end of the following month.
• 2nd to 9th year of service: 2 months’ notice, effective at the end of the month.
• 10 or more years of service: 3 months’ notice, also ending at the close of a calendar month.

Both employers and employees must issue notice in writing and retain proof of delivery (e.g., registered letter or signed acknowledgment). Contracts can include longer notice periods, but not shorter than the statutory minimums unless otherwise allowed under CLA rules.

Protected Periods

Swiss law prohibits termination during specific protected periods. Employers may not terminate an employee:

• During military or civil defense service (plus four weeks afterward)
• During pregnancy and for 16 weeks after childbirth
• While the employee is incapacitated due to illness or accident, for a defined duration based on years of service (30 to 180 days)

Termination issued during a protected period is legally null and void, and employment continues uninterrupted.

Severance Pay

Severance pay is not generally required under Swiss law, unless:

• It is explicitly provided in the employment contract
• It is mandated by an applicable CLA
• The employer is found to have terminated the contract abusively or without cause

However, Swiss law does include a “goodwill” provision (Art. 339b CO), where employers may choose to offer a discretionary severance payment to long-serving employees. This typically applies when:

• The employee is over 50 years old, and
• Has at least 20 years of service with the company

Although rare, such payments can help soften the financial impact of job loss and reflect the employee’s long-standing contribution to the organization.

Employers must also provide the employee with a certificate of employment at the end of the contract, outlining the nature and duration of the job. This certificate must be factual, neutral, and free of discriminatory or damaging language.

Given Switzerland’s nuanced rules around termination and the variation across cantons and industries, many international companies choose to work with an Employer of Record (EOR) in Switzerland. An EOR ensures compliant terminations, proper documentation, and reduced risk of legal challenges, allowing companies to maintain a smooth and lawful offboarding process.

Employee Benefits and Additional Perks

In addition to statutory benefits like social security, accident insurance, and paid leave, many Swiss employers offer voluntary perks to attract and retain top talent in a competitive job market.

Common additional benefits include:

• Meal or transport allowances: Support for daily meals or commuting costs through vouchers or reimbursements.
• Childcare subsidies: Financial assistance or access to daycare services for working parents.
• Extra vacation days: Many employers offer 5–6 weeks of leave, exceeding the legal minimum of 4 weeks.
• Flexible or remote work options: Hybrid or remote setups are increasingly common and valued for promoting work-life balance.
• Wellness programs or private pensions: Perks such as gym memberships, mental health support, or contributions to voluntary pension plans.

These benefits improve employee satisfaction, strengthen retention, and enhance employer branding. For international companies, working with an Employer of Record (EOR) in Switzerland ensures that benefit offerings meet local expectations and remain compliant with Swiss labour standards.

Anti-Discrimination and Equal Treatment Laws

Swiss law strictly prohibits workplace discrimination to ensure fairness, inclusivity, and equal opportunity across all stages of employment. These protections apply to both Swiss nationals and foreign employees, reinforcing Switzerland’s commitment to diversity and human rights.

Protected characteristics under Swiss law include:

• Gender and gender identity
• Race and ethnicity
• Religion or belief system
• Age
• Nationality or origin
• Sexual orientation
• Disability or chronic illness

Employers are legally obligated to promote equality and prevent any form of direct or indirect discrimination in hiring, compensation, training, promotions, and terminations.

Key employer responsibilities:

• Ensure equal pay for equal work: Salary structures must reflect job responsibilities, qualifications, and experience—regardless of gender or background.
• Maintain inclusive hiring and promotion practices: Job advertisements, recruitment procedures, and advancement opportunities must be free of bias and accessible to all qualified candidates.
• Provide reasonable accommodations: For employees with disabilities or health conditions, employers must make practical adjustments to the workplace or role where feasible.

Legal consequences:

Violations of anti-discrimination laws may result in administrative penalties, civil lawsuits, or reputational damage. Affected employees have the right to file complaints with the Federal Office for Gender Equality (FOGE) or pursue claims in labor courts.

To foster a fair, compliant, and inclusive workplace, employers should implement:

• Regular training on diversity and unconscious bias for managers and HR staff
• Transparent performance and pay review systems
• Written anti-discrimination policies as part of the employee handbook

For global companies new to the Swiss market, partnering with an Employer of Record (EOR) in Switzerland helps ensure all HR practices adhere to local anti-discrimination standards while also reflecting international best practices.

Labour Law Compliance Tips for Global Employers

To stay compliant with Labour Laws in Switzerland, international employers should:

• Use clearly written contracts aligned with cantonal and federal laws
• Register employees with all relevant social insurance bodies
• Keep accurate payroll, leave, and work hour records
• Monitor updates in local CLAs or cantonal regulations
• Partner with a trusted Employer of Record (EOR) in Switzerland

Outsourcing HR compliance to Global EOR Services reduces administrative risk and ensures a smooth market entry.

Why Work With an Employer of Record (EOR) in Switzerland

An Employer of Record in Switzerland acts as the legal employer for your workforce, allowing your company to hire talent in Switzerland without establishing a local legal entity. The EOR assumes responsibility for all employment-related tasks, ensuring compliance with national and cantonal laws.

Key services provided by an EOR include:

• Drafting compliant employment contracts in accordance with the Swiss Code of Obligations and applicable collective labour agreements (CLAs)
• Handling payroll processing, payslips, tax withholdings, and statutory social security contributions
• Managing employee benefits, including mandatory insurance coverage, paid leave, and supplementary perks
• Administering terminations and notice periods in compliance with Swiss employment law
• Ensuring full legal compliance with both federal and cantonal employment regulations

This solution is ideal for companies looking to:

• Test the Swiss market or establish a small local presence before incorporating a legal entity
• Quickly hire remote professionals based in different cantons across Switzerland
• Deploy short-term or project-based teams for specific client engagements or operational needs
• Convert contractors into full-time employees while maintaining compliance and minimizing risk

By using trusted Global EOR Services, your business gains speed and flexibility in hiring while reducing administrative burden, legal exposure, and the complexity of managing employment across Swiss jurisdictions. Whether you’re hiring one employee or building a cross-functional team, an EOR like Asanify ensures you stay compliant and competitive in the Swiss labour market.

Suggested Read: Payment Terms for Contractors in Switzerland

Conclusion

Switzerland offers global employers a stable business environment, a highly skilled workforce, and access to the heart of Europe. However, navigating Labour Laws in Switzerland—from contract structures and social security to region-specific holidays and termination rules—requires precision and local expertise.

To ensure compliance, avoid legal pitfalls, and accelerate hiring, many international companies partner with an Employer of Record (EOR) in Switzerland. An EOR handles everything from compliant contracts and payroll to benefits and terminations—freeing you to focus on business growth while staying fully aligned with Swiss and cantonal regulations.

Whether you’re testing the market or scaling a remote team, using trusted Global EOR Services like Asanify ensures your expansion into Switzerland is smooth, compliant, and cost-efficient.

FAQs

Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant  or Labour Law  expert for specific guidance.