• Insights

The employment year 2020 in prospect in Switzerland

Written by
Blesi & Papa, specialists in Swiss employment, pensions and social security law.
The new year 2020 has just started and brings about some changes with regard to Swiss employment law. This article provides an overview of the most significant developments.

Amendment to the Gender Equality Act: equal pay analysis requirement

The revised Gender Equality Act, which enters into force on 1 July 2020, requires employers with at least 100 employees to conduct an internal ‘wage equality analysis‘. This analysis is to be repeated every four years until an analysis demonstrates that the principle of equal pay has been achieved.

Employers subject to the Swiss Code of Obligations must submit their wage equality analysis to an independent review, either by an accredited auditor, by an equal pay expert organisation or by an employee representative body constituted in accordance with the Participation Act. Employers must inform their employees in writing no later than one year after completion of the review on the results of the wage equality analysis. Listed companies must also publish the results of the wage equality analysis in the appendix to their annual financial statements.

As far as timing is concerned, the first wage equality analysis must be finalised by 30 June 2021 and reviewed by 30 June 2022. Employees and shareholders must be informed of the results of the reviewed wage equality analysis by 30 June 2023.

Employers that do not comply with this equal pay analysis obligations are not subject to legal sanctions, but run reputational risks. Listed companies, however, can be sanctioned under Swiss stock market law if they violate the obligation to publish the results of the reviewed wage equality analysis in the appendix to their annual financial statements. The results of the wage equality analysis may lead to individual claims regarding wage discrimination.

The new legal provisions regarding the wage equality analysis will be in force for a limited term of 12 years (i.e. until 30 June 2032).

Duty to report vacancies

As a result of the public initiative ‘against mass immigration’, which was accepted by a majority of Swiss voters in 2014, a system of preferred treatment for registered unemployed people was enacted in July 2018. It aims at protecting the domestic market and obliges employers in industries where the unemployment rate is 8% or higher, to notify vacancies exclusively to the regional employment centres for five days. This gives registered unemployed individuals a time advantage to apply for the job on their own initiative, and the public job agencies may also submit application files. Suitable applicants must then be invited to a job interview or assessment.

As of 1 January 2020, the threshold described above has been dropped from 8% to 5%.

Swiss Federal Act on Data Protection

Swiss federal and cantonal legislation on data protection is currently under revision. Switzerland will not adopt the European General Data Protection Regulation ‘GDPR’ (Regulation [EU] 2016/679) as such, but autonomously implement it into Swiss law. The proposed amendment seeks to improve data protection for individuals by demanding greater transparency in data processing and control mechanisms as well as strengthened supervision and sanctions. Furthermore, cross-border disclosure of data will be made easier. Federal as well as cantonal legislators have been delayed in this process due to resistance in the industry, mainly against the level of penalties. The proposed revision of the Act is currently with the Parliament. It is expected to be enacted in 2021.

Social security contributions

As of 1 January 2020, various social security contribution rates and benefits have been adjusted. By way of an example, the contributions to the first social security pillar (old-age and survivors’ insurance, disability insurance and fund for loss of earnings, AHV/IV/EO) have been increased to 10.55% (to be shared equally between employer and employee). Furthermore, child and education allowances have been increased in several Swiss cantons.

Thomas Pietruszak
Partner - Switzerland
Blesi & Papa