Cross-border posting of workers from and to Switzerland: A legal approach
As Switzerland is not an EU-Member-State, the EU-PWD-Regulations are not applicable on postings from and to Switzerland. Instead, Swiss statutory law regulates the legal requirements as well as the applicable minimum standards for a posting to Switzerland and sets the mandatory notification process.
As different laws apply to the two models, the posting is to be differentiated from the staff leasing in Switzerland. This article provides a short overview on the distinctions between postings and staff leasing in Switzerland and delivers guidance for international assignments to companies.
Posting of workers and staff leasing are two common models used to temporarily deploy additional workers into a company. Although these two mobility models serve similar purposes, they are distinguished by clear legal limitations in Switzerland, especially when they are practiced on an international scale. For companies interested in cross-border mobility of their employees it is essential to be aware of the feasibility and the different legal requirements of these models in Switzerland which are outlined below.
When it comes to sending employees from abroad to a Swiss entity to perform work while still being employed with their employer in a country other than Switzerland, a posting of workers can be the right tool as it generally allows a temporary assignment of employees to a host company in Switzerland. As Switzerland is not an EU-Member-State, the Posted Worker Directive-Regulations (“PWD-Regulations”) applicable in the European Union are not valid on postings from and to Switzerland. Instead, Swiss statutory law regulates the legal requirements as well as the applicable minimum standards for a posting to Switzerland and sets a mandatory notification process.
Postings to Switzerland are possible when certain requirements are met. For employees to be assigned to a host company in Switzerland, the home employer abroad needs to formally stay the employer of the assignee, keep the right to give instructions to that employee and stay liable for the assignee throughout the posting. With this type of inbound posting, the terms and conditions of the employment as well as the remuneration prescribed by Swiss federal laws, ordinances, collective bargaining agreements and standard employment agreements, if applicable, need to be observed. The home entity abroad shall furthermore reimburse the posted employee for incurred expenses relating to travel, board and lodging.
Postings from Switzerland to an entity abroad require the employee to be assigned as a service provider to the host entity abroad. The right to instruct the employee and the supervision stay with the formal employer in Switzerland. The employee remains employed by the formal employer in Switzerland under the terms and conditions of the employment agreement and mandatory Swiss statutory law (or the law governing the employment agreement if it differs) needs to be complied with. During the posting to another country, local mandatory working conditions of the country of the host entity shall be complied with as well.
From a Swiss legal perspective, the posting is differentiated from the staff leasing, as different laws apply to these two models. In distinction to the posting, the assignment model of the staff leasing allows for the right to issue instructions to the employees to be passed over to the host entity for the time of the assignment and for the supervision of the employee’s work to lie with the host entity as the employee becomes a part of the host entity’s organisational structure during the assignment.
Regarding the outbound staff leasing from Switzerland to a host company abroad, a cantonal and federal license for cross-border staff leasing is required. The contractual set-up needs to comply with the provisions of the Swiss Federal Recruitment and Staff Leasing Act as the employee remains employed by a Swiss entity during the assignment. Inbound staff leasing to a host entity in Switzerland from abroad is however generally prohibited according to Swiss legislation. According to the State Secretariat for Economic Affairs SECO in Switzerland, occasional staff leasing from abroad is also covered by this prohibition.
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In accordance with practice in Switzerland, assignments can initiate the attention of the Labour Inspectorate to verify the correct fulfilment of working conditions in Switzerland. It is to be noted that not only the contractual set-up but also the lived circumstances on a daily basis are relevant for the assessment. Fines can be imposed in case of violation of the regulation applicable in Switzerland.
For companies that are seeking a cross-border solution for their assigned employees from abroad to Switzerland the model of posting is recommended as Swiss legislation is strict on the interpretation of the prohibition of inbound staff leasing to Switzerland.
Deloitte Legal provides Swiss legal advice around the topics of posting of workers and staff leasing from and to Switzerland and supports companies in the set-up of necessary legal documentation such as service agreements, assignment letters and addendum to employment contracts for their cross-border assignments. Deloitte Legal offers support in the assessment of the necessary content in the documentation and gives advice on the assignment procedure by providing in-depth expertise as well as by working in a strong international network.
If you would like to discuss more on this topic, please do reach out to our key contacts below.
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