Since 1 April 2020 foreign employers sending their employees on long-term assignments to Switzerland no longer have to cover their expenses for accommodation, meals and travel after the first 12 months. Especially now when many companies have implemented cost-saving measures, this well received change makes assignments significantly more cost-efficient. Reviewing assignment allowance policies could result in cost savings of more than CHF 30,000 per employee per year.
Until 1 April 2020 employers were by law required to cover all accommodation, meal and travel costs for employees assigned to Switzerland, irrespective of the assignment's duration. With the recent legal changes, employers can save significantly on such costs. Many cantons prescribe lump sum allowances of CHF 3,000 per month to cover accommodation, meals and travel. In a four year assignment, employers can now save up to CHF 108,000 compared to before the changes.
The Federal Authorities have now confirmed that these legal changes apply not only to assignments with a start date after 1 April 2020 but also to assignments with an earlier start date. However, any changes to the assignment letter or contract require the assignee's explicit consent.
All other legal requirements, in particular the required Swiss salary level and other mandatory labour conditions (such as holiday, working hours etc.), remain unaffected and need to be complied with at all times.
Assignments have always been significantly more expensive than employing local workers. The change in legislation recognises this and significantly reduces the cost difference between assignments and local employment in Switzerland.
We recommend reviewing the policies and respective assignment costs for assignees and amending them where appropriate. If employers want to reduce the assignment costs for ongoing assignments after 12 months, written consent of the assignee is required.
Read more about our range of Employment Law services.
Please reach out to our key contacts below if you would like to know more about this topic.
Explore our collection of Swiss COVID- Tax & Legal insights designed to help companies in Switzerland to better navigate the COVID-19 crisis.