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Written Agreements

Written contracts are not required by Swiss law. For employment agreements concluded for an indefinite duration or for longer than 1 month, employers must provide written notification to employees within 1 month of the beginning of the employment relationship. The following information must be included:

• The names of the contracting parties
• The date of the beginning of the employment relationship
• The employee’s function and responsibilities
• The salary and any additional benefits
• The length of the workweek

Employers in Switzerland have the authority to request their employees to provide a written undertaking that they will abstain from engaging in any competitive activities post-employment, notably refraining from establishing a competing business or working for one. This prohibition on competition is enforceable only if the employee has access to sensitive information like client lists or trade secrets, which could significantly harm the employer if utilized. The restrictions on competition must be reasonable in terms of duration, geographical area, and scope, ensuring that they do not unduly hinder the employee's future economic endeavors, except in special circumstances where they can be extended to more than 3 years. Courts have the discretion to intervene if the restrictions are deemed excessive, considering all relevant circumstances, including any justifications provided by the employer.

Oral Agreements

There is no statutory requirement for an employment contract to be in writing: it may be oral or even inferred from the parties‘ conduct. Therefore, an employment agreement is deemed valid (and is enforced as such) when the employer hires an employee for a specific time and in exchange for a salary.

For indefinite duration contracts or fixed-term agreements lasting more than 1 month, written notification must be provided to the employee within a month of joining stating employment conditions.

Implied Agreements

Under Swiss laws, if it is agreed orally or implicitly that a person will provide services to another party for a limited or unlimited period, and that party will pay a salary in return for the services, an employment contract legally exists. Employment agreements can include implied terms to the extent the parties act in a certain manner. If a contract contains neither express nor implied terms, the relevant statutory provisions apply.

Under the Federal Labour Act of Switzerland, the maximum for weekly working hours is 45 for industrial workers, office, technical, and other employees, including salespersons in large retail stores. For all other commercial enterprises, the legal maximum working hours are 50 per week. Regular weekly working hours are determined by employment or collective bargaining agreements.

Nighttime work cannot exceed 9 hours per shift; however, if the employee works only for a maximum of 3 out of 7 consecutive nights, the working time may be increased to 10 hours per shift.

Permanent or regular evening, night, and Sunday work must be considered indispensable for either technical or economic reasons. Time off equal to 10% of the hours of night work performed must be provided for night work carried out on 25 or more nights per calendar year.

New Year’s Day: 1 January; St. Berthold’s Day: 2 January; Good Friday: Variable; Easter Monday: Variable; Labor Day: 1 May; Ascension: May (Variable); Whit-Monday: June (Variable); Swiss National Day: 1 August; “Jeune Genèvois”: September Variable; Christmas Day: 25 December; Boxing Day: 26 December; “Restauration”: 31 December.

The first month of the employment relationship in case of employment contracts for an indefinite duration is considered the probationary period. It may not exceed 3 months for permanent employment agreements and is waived for fixed-term contracts. There is no statutory provision of leave during probation; employees and employers can decide upon leaves.

During the probation period, either party may terminate the contract at any time by giving 7 days’ notice to the other party.

If the employee is absent from work during the probationary period due to sickness, accident, or the performance of a legal duty that is not voluntarily assumed, probationary period is prolonged accordingly. Employers have the right to terminate the employment contract in such a situation. Probationary employees do not have the same level of protection against dismissal in case of illness or accidents or pregnancy as permanent employees.

Notice Period

Per the labor law of Switzerland, the statutory notice periods are:

• 7 days during probation
• 30 days in case of mass redundancy
• 1 month from the last day of the month in the first year of service
• 2 months from the last day of the month for the second through the ninth year
• 3 months from the last day of the month from the tenth year of service

Parties may agree on a different notice period. Such an agreement must be in writing, and the agreed notice period must not be less than 1 month.

Fixed-term employment contracts generally end on the agreed-upon date. However, they may be terminated early in the following circumstances:

• Serious cases
• The contract contains provisions for early termination
• Mutual agreement between the employer and employee

Fixed-term agreements for more than 10 years require 6 months' notice.

Severance Benefits

Severance is paid only in case of dismissal of employees above 50 years of age with tenure of at least 20 years. The minimum severance payment cannot be below 2 months and exceed 8 months of salary. If the employee receives benefits from an occupational benefits scheme, these benefits may be deducted from the severance allowance to the same extent they were funded by the employer either directly or through the contributions to the occupational benefits scheme.

Minimum Wage

Swiss law does not specify minimum wage or average earnings. In most cases, salary levels are agreed upon between the employer and the employee during the recruitment process.

The following cantons in Switzerland have set minimum wages:

• Neuchâtel - CHF 21.31 (Swiss francs) per hour
• Jura - CHF 21.40 per hour
• Ticino - CHF 20-20.50 per hour
• Geneva - CHF 24.48 per hour
• Basel-Stadt - CHF 22 per hour
• Zurich (city) - CHF 23.90 per hour
• Winterthur (city) - CHF 23 per hour

The frequency of payment can be determined by an individual employment contracts. Unless otherwise provided by agreement or custom, the salary must be paid to the employee in legal tender during working hours; a written salary statement must be provided to the employee.

Overtime, Holiday & Vacation Pay

Overtime working hours (above 45 to 50 hours depending on the sector) may be compensated either by a rest period or with a premium of 25%. Employees can waive the right to overtime pay and compensation by time off for work exceeding the contractually agreed hours. Such a waiver must be in writing and is only effective ex-ante (i.e., for overtime pay not yet earned).

Work done on weekly rest days is compensated with a 50% premium.

If a public holiday falls on a non-working day (e.g., Saturday or Sunday), compensation is not provided. Work on public holidays is treated the same as work on weekly rest days and is compensated with a 50% premium.

Employees are entitled to full pay while on their annual leave.

Visas

Switzerland is a part of the Schengen Agreement. Citizens of countries that are a part of the European Union (EU) and the European Free Trade Association (EFTA) have the right to enter, live, and work in Switzerland without additional permits or visas.

Non-EU nationals may apply for either:

• Type C (Schengen) visa - allows staying in the country for up to 3 months within 6 months of the visa issue date; this visa type does not automatically grant the person the right to work.
• Type D visa - for longer-term stays (over 3 months). It is usually distributed in conjunction with a work permit.

Work Permits

Switzerland has a dual system for the admission of foreign workers. Nationals from European Union (EU) or European Free Trade Association (EFTA) countries benefit from the Agreement on Free Movement of Persons and, in general, do not need a work permit if they reside in Switzerland. There are certain restrictions and exceptions for nationals from the new EU countries.

In regard to non-EU and non-EFTA nationals, only a limited number of management-level employees, specialists, and other qualified individuals are admitted from all other countries.

The following types of permits are issued in Switzerland:

• Permit L – a short-term residence permit that allows a person to stay in Switzerland for up to 1 year, tied to the employment contract with a possible extension for an additional year in exceptional cases.
• Permit B – an initial or temporary residence permit that is valid for one year but can be extended annually; EU or EFTA nationals wishing to be self-employed can get a B permit valid for five years if they can prove that their financial success is possible through self-employment.
• Permit C – a settlement permit for persons who have been living for ten continuous years in Switzerland; an exception is made for the US and Canadian citizens who only have to live in Switzerland for five consecutive years to apply for a settlement permit.