Minimum wage: where it exists in Switzerland

In Switzerland there is no federal minimum wage. Anyone arriving from Italy or other countries with a single national floor is often surprised: here the general rule is freedom of contract, tempered however by two mechanisms that in certain cases make a wage floor binding. Employers need to know what they are, because paying less than what is due is not a saving: it is a risk of back-payments and penalties.

The principle: no national floor

The Code of Obligations sets no general minimum wage. Employer and employee agree the pay freely. In 2014 a popular initiative proposing a federal minimum was rejected at the ballot box. Since then the issue has shifted to the cantons and to collective agreements, where minimums most certainly do exist.

The cantons with a statutory minimum wage

Some cantons have introduced by law a cantonal minimum wage binding for work carried out on their territory. These include cantons in French-speaking Switzerland and Ticino. The common features:

• the minimum is expressed as a gross hourly amount and is adjusted periodically;
• it applies to work performed in the canton, regardless of where the employer is based;
• there may be exceptions or reduced amounts for specific sectors, apprenticeships, agriculture or young people in training.

The practical point: if your employee works in a canton with a statutory minimum, that minimum prevails over freedom of contract. Before making a salary offer, check the amount in force at that moment in the canton concerned, because adjustments are frequent.

Collective labour agreements (CLAs)

The second mechanism is the CLA. Many sectors — construction, cleaning, hospitality, security, retail in various cantons — have collective agreements that set sector minimum wages, often differentiated by role, experience and region.

A CLA can be:

• generally binding (declared universally applicable): it applies to all companies in the sector in a given area, even those that are not members of the signatory associations;
• company-level or association-level: it binds only those who have signed up.

If your business falls within a sector with a generally binding CLA, the agreement’s minimum wages cannot be undercut. The other clauses must also be respected: thirteenth month, allowances, working hours, contributions to joint funds.

Standard employment contracts with minimum wages

There is a third, less well-known case: standard employment contracts (SEC) with mandatory minimum wages. The authorities may issue them for sectors where repeated wage abuse is found, usually in fields without a CLA. These too set temporary binding minimums for the sector concerned.

How the rules combine

When several sources overlap, the condition most favourable to the employee applies in principle. In practice, to set a salary correctly you have to check, in order:

1. is there a cantonal minimum wage at the place of work?
2. is the sector covered by a CLA (and with what scope of application)?
3. is there a SEC with minimum wages for that sector?
4. which of the applicable floors is the highest?

Why it is not a detail

Paying below the applicable minimum exposes you to concrete consequences: back-payment of the wage differences, administrative penalties, exclusion from public tenders and, in sectors with joint funds, audits and contractual penalties. The responsibility lies with the employer, who cannot invoke the employee’s agreement to justify a wage below the binding minimum.

There is also a social insurance angle: contributions are calculated on the salary actually due. A wage that is too low or inconsistent declarations draw the attention of the compensation funds.

The mistake to avoid

The typical mistake is to reason “there is no minimum wage in Switzerland, so I am free.” That is true only in the absence of an applicable canton, CLA or SEC. In practice, for many activities a minimum does exist, it simply has to be looked up in the right source. Checking it beforehand costs a few minutes; discovering it after an audit costs far more.

How we help

The Payroll division of SIH ONE checks which minimum wages — cantonal, CLA or SEC — apply to your situation, sets up salaries and payslips compliantly and keeps you aligned with adjustments. Entrust us with your payroll.