Liechtenstein is a microstate located between Switzerland and Austria. The entire country has an area of only 160 square kilometers (not quite 62 square miles) and has a population of nearly 40,000. Although it has many ties to the European Union, Liechtenstein is in a customs union with Switzerland and uses the Swiss franc as its currency. Liechtenstein is an international banking center and its low tax rates make it a popular country for establishing corporations, trusts and other business entities. Manufacturing is also an important part of the economy. Liechtenstein’s manufacturing enterprises, many of them very small businesses with 10 or fewer employees, produce a variety of goods for export, particularly electronics, ceramics and precision instruments.
Employment contracts in Liechtenstein are for either an indefinite term or fixed term. There is no specific statutory limit on the term of a fixed contract, but shorter term contracts may be renewed no more than three times and have a combined term of no more than five years; if the term exceeds five years, the relationship is automatically converted to an indefinite contract.
Employment contracts in Lichtenstein can be either oral or written, but written contracts are strongly recommended. In the case of an oral agreement the employer must still disclose the most important details of the employment in writing.
The contract or disclosures must state:
The standard work week for most professions is 45 hours from Monday to Friday. In some jobs, Saturday is also a workday. For those aged 15 to 18 years old, the work week is 40 hours. All work hours must be recorded and documented. An employer may require employees to work “extra hours” in situations where there is an urgent business need. Employees may not be required to work more than two extra hours per day and an employee may not work more than an average of more than 48 hours per week in a four-month period. In non-urgent situations, employees may work overtime if they consent to do so.
As with extra hours, an employee may not work more than an average of 48 hours over a one-month period. Sunday is normally not a workday in Lichtenstein. Work between the hours 11 p.m. and 6 a.m. is also not normally allowed and must be authorized by the Office of Economic Affairs. Pregnant women may not work between 11 p.m. and 6 a.m.
Employees in Liechtenstein receive sick pay from the second day of illness until they return to work, with the exception of those who work less than eight hours per week or will be employed for less than three months. Employers in Liechtenstein are required to purchase insurance from a government approved insurer to cover the costs of the per diem sick pay. The employer is required to pay half the costs of this insurance and may assume more than half of the cost. Employees may also take up to three days of leave to care for a sick household member.
When taking sick leave, whether for themselves or a household member, an employee is obligated to notify the employer and provide a medical certificate. The employer is responsible for reporting the illness to its insurer.
Female employees receive 20 weeks of maternity leave, of which 16 must be taken after the birth. Residents who are not employed may be able to receive a maternity benefit in an amount based on the resident’s spouse’s salary and number of children.
Employees are also entitled to take an unpaid parental leave of up to four months. Biological parents may take this leave at any time until the child’s fourth birthday. Adoptive parents, foster parents or stepparents may take this leave until the child’s sixth birthday. Parents seeking to take parental leave must notify the employer at least three months in advance. The employer may require that the parental leave be taken at a different time than requested due to the needs of the business. After maternity or parental leave, the parent is entitled to return to their previous job or, if that is not possible, to an equivalent position.
The government of Liechtenstein does not have a set fixed minimum wage. Bonuses are common in Lichtenstein. Some industries normally pay a 13th month salary.
Employees who work a five-day week receive 20 days of paid annual leave, or 24 days for employees who work six days per week. Employees who are 20 years old or younger are entitled to a minimum of 25 days per year. Disabled employees are entitled to five additional days. A collective agreement or contract may entitle an employee to additional leave. Employees inform their employer when they wish to take time off, and the employer schedules the leave.
The employer is obligated to take the employee’s requests into account and may only reject a request if the needs of the business require the employee to be at work at the time they have requested leave or if another employee’s request for leave at the same time must be given priority. Unused leave may only be carried over to the next year if there is a compelling reason, and the leave must be used by March 31 of the following year. The employer must pay an employee for unused vacation time when the employment relationship ends.
Liechtenstein observes the following holidays:
All legal residents of Liechtenstein, including non-citizens, must purchase health insurance from one of several government-approved insurers. The insurers must accept all applicants and all of them must offer the same basic plan. Some residents also purchase additional coverage, which is not necessarily the same through each insurer.
Notice is between one and four weeks. Employees receive four weeks of severance pay for each year worked if dismissed due to economic reasons.
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