Switzerland has one of the highest wage levels in the world. It is therefore not surprising that politically, the protection against wage dumping is one of the most controversial topics in business immigration. This is currently reflected in the ongoing negotiations on an institutional framework agreement with the EU.
Switzerland has a dual system for issuing residence permits: a distinction is made between foreigners from EU-27/EFTA countries and third-country nationals. Only for the latter is there preventive wage control in Switzerland.
Nationals from third-countries (non EU-27/EFTA) who want to take up a new job in Switzerland require a work permit from the very first day. Foreign nationals may only be admitted to work in Switzerland if (inter alia) the salary and employment conditions customary for the location, profession and sector are satisfied (cf. Art. 22 para 1 FNIA). This preventive wage control is intended to prevent wage dumping at the expense of domestic employees. Furthermore, it is also intended to protect foreign employees from abusive working conditions.
Various tools are available for determining the salary conditions customary for the location, profession and sector. In practice, the statistical calculator "Salarium" provided by the Federal Statistical Office (FSO) is regularly used as a benchmark. In urban areas, the wages indicated in the Salarium are to be considered as minimum values. In more rural areas, minor differences are tolerated in individual cases. In any case, however, the average wage of a male employee has to be taken into account. Other tools are e.g. the "wage book" (Lohnbuch) of the Office of Economics and Labor of the Canton of Zurich and the national wage calculator of the State Secretariat for Economic Affairs (SECO).
The competent authority has to be able to check the compliance with the salary and working conditions. Therefore, a written employment agreement must be submitted, with the application signed at least by the employer. With regard to its content, the agreement should contain information on the duration of the employment, the employment conditions and the remuneration. It is advisable to make it clear in the employment agreement that it will only enter into force when the relevant work permit is granted.
For employees from the EU/EFTA area (with the exception for employees from Croatia), there is no preventive control of wage and working conditions. With the so-called accompanying measures ("flankierende Massnahmen"), the Swiss legislators have introduced a system with retrospective and selective controls. The system includes the Posted Workers Act ("Entsendegesetz"), the facilitated declaration of the general applicability of collective employment agreements and the possibility of introducing minimum wages in standard employment agreements ("Normalarbeitsverträgen"). The Posted Workers Act contains provisions to ensure minimum wage and working conditions for employees posted to Switzerland. This includes inter alia the employer's obligation to comply with mandatory minimum wage regulations.
The Swiss system of accompanying measures is the subject of the ongoing negotiations with the EU on an institutional framework agreement. In November 2020, the Swiss Federal Council defined its position with regard to these negotiations but for tactical reasons, however, has so far remained silent about its position. In particular, the Swiss labour unions want to retain the current system of accompanying measures. Should an institutional framework agreement be reached, however, adjustments to wage protection are to be expected, as the status quo goes beyond the EU proposal. These adjustments are likely to be one of the key political issues in 2021. Therefore, it is important to keep an eye on the developments.
If you have any questions or require further information, please do not hesitate to contact our Immigration Team.
Authors: Gian Geel, Selim Keller
