Switzerland is a country in west-central Europe, bordered by France, Italy, Austria, and Germany. It has a workforce of over 5 million people (2023), and a GDP of 884.94 billion US dollars (2023). It has a strong economy largely driven by the services sector, with low levels of unemployment and inflation. 

Swiss labor laws are considered to be strict, with laws in place over maximum working hours, mandatory paid leave, employee protections, and notice periods. Labor law in Switzerland adheres to the Continental European tradition of public and private law, with the Federal Work Act outlining fundamental Swiss labor law which must be followed by employers and employees in Switzerland.

This help guide will provide a comprehensive overview of Swiss labor law, detailing all mandatory employee benefits in Switzerland including working hours, annual paid leave, overtime, social security, sick leave, and parental leave. We’ll also provide information about supplementary employee benefits in Switzerland and an overview of how RemotePeople can help hire in Switzerland ensuring Swiss labor laws are adhered to.

Switzerland Employment Laws

Swiss labor law is dictated by the Swiss Code of Obligations (SR 220), alongside the Swiss labor act (SR 822.11). The aim of Swiss labor laws is to inform employers and employees of their rights and obligations when working in Switzerland. The Swiss government aim to enable as many people as possible to be part of the Swiss workforce, ensuring they are treated fairly and earn a good living in a safe environment.

Trade unions are not considered to be prominent in Switzerland, with just one in five Swiss workers belonging to a union. This is one of the lowest unionization rates in Europe, the labor disputes often settled by arbitration methods.

Companies employing in Switzerland should consult with legal professionals to ensure Swiss labor laws are fully complied with.

Mandatory Employee Benefits in Switzerland

The below sections will explain mandatory employee benefits in Switzerland, from social security contributions to working contracts.

Social Security

Switzerland has a network of social insurance schemes to financially safeguard people living and working in Switzerland. 

Employers and employees in Switzerland are required to pay a combined social security rate of 12.8%. This helps to pay for social programs such as welfare, health care, and other benefits.

The social security system in Switzerland is divided into the following branches:

Pensions

The retirement age in Switzerland for men and women is 65, with the pension system being divided into 3 pillars.

The first pillar consists of the old-age and survivors insurance, and the invalidity insurance scheme. This is financed by salary contributions, with employees and employers paying equal parts towards this pillar. This pension insurance is state-run and compulsory for all employees/employers in Switzerland.

The second pillar is the compulsory occupational pension scheme, with employees automatically insured under this if they have annual earnings of at least CHF 22,050.

The third pillar is a private savings scheme which is optional. There are tax advantages with this pension scheme and is typically only accessible when employees reach retirement age.

Health and Accident Insurance

While healthcare isn’t covered directly by the Swiss government, it is compulsory for everyone living in Switzerland to take out a basic healthy insurance policy with a provider of their choice. Individuals are required to pay 10% of their healthcare costs (capped at CHF 700 per calendar year). 

Earnings Compensation

Switzerland has an Earnings Compensation Scheme (EO) which helps cover loss of earnings while working for the military, alternative civilian service, and civil protection service. This scheme also covers up to 80% of earnings during maternity in the 14 weeks after having a child, plus earnings lost during paternity leave (2 weeks following birth).

Unemployment Insurance

If unemployed, Switzerland’s social security covers 70% – 80% of the person’s last salary. This is dependent on age, dependents, and length of the insurance period, with a maximum daily allowance amounting to 520 days. To be eligible for this insurance, claimants must have made social security contributions for at least 12 months in the two years prior to becoming unemployed. 

Family Allowances

The Swiss social security system provides child allowance rates which vary depending on the area of Switzerland. The minimum is CHF 200 per month for children under 16, with a minimum education allowance of CHF 250 per month for children between 16 and 25 in education.

Annual Paid Leave

All employees in Switzerland are entitled to 4 weeks of vacation time per year. This is regardless of whether the work is full or part-time.

Employees under the age of 20 are entitled to 5 weeks of annual paid leave. Employers may provide extra vacation time which will be dictated in an employee contract.

Working Hours

The maximum number of hours that can be worked by an employee in Switzerland is 45 hours if you work for an industrial company, are office staff, technical staff, or sales staff for major retail companies. Other employees can work a maximum of 50 hours per week.

Generally, the working hours in Switzerland are 40 – 44 hours per week, and all working hours must be recorded by an employer and records must be retained for up to 5 years.

Overtime Pay

All hours exceeding working hours determined in an employment contract are deemed as overtime. Workers must be compensated for overtime if:

  • The overtime has been expressly ordered by the employer
  • The overtime proves necessary or if the worker has deemed it necessary in good faith

Working at night and on Sundays is generally forbidden in Switzerland unless you work for specific companies such as security agencies.

Workers must be compensated with a 50% wage supplement when working on Sundays. If an employee is required to work unplanned over 6 Sundays in a calendar year, they are entitled to a 50% salary increase.

All employees in Switzerland will receive a paid day off for Swiss National Day if it falls on a working day. Each canton of Switzerland can set up to 8 extra public holidays. 

  • New Year’s Day – January 1 (National)
  • Berchtold’s Day – January 2 (AG, BE, FR, GL, JU, LU, OW, SH, TG, VD)
  • Epiphany – January 6 (GR, LU, NW, SZ, TI, UR, VS)
  • Republic Day – March 1 (NE)
  • St Joseph’s Day – March 19 (GR, LU, NW, SZ, TI, UR, VS)
  • Näfelser Fahrt – April 3 (GL)
  • Good Friday – April 18 (National except TI, VS)
  • Easter Monday – April 21 (National except NE, SO, VS, ZG)
  • Labour Day – May 1 (BL, BS, JU, LU, NE, SH, SO, TG, TI, ZH)
  • Ascension Day – May 29 (National)
  • Whit Monday – June 9 (National except NE, SO, VS, ZG)
  • Corpus Christi – June 19 (National except AR, BL, BS, BE, GE, GL, NE, SH, SG, TG, VD, ZH)
  • Independence of Jura – June 23 (JU)
  • St Peter and St Paul – June 29 (GR, TI)
  • National Day – August 1 (National)
  • Assumption Day – August 15 (AG, AI, FR, JU, LU, NW, OW, SO, SZ, TI, UR, VS, ZG)
  • Jeûne genevois – September 11 (GE)
  • St Mauritius – September 22 (AI)
  • Brother Klaus Festival – September 25 (OW)
  • All Saints’ Day – November 1 (National except AR, BL, BS, BE, GE, GR, NE, SH, TG, VD, ZH)
  • Immaculate Conception – December 8 (AG, AI, FR, GR, LU, NW, OW, SZ, TI, UR, VS, ZG)
  • Christmas Eve – December 24 (GL)
  • Christmas Day – December 25 (National)
  • St Stephen’s Day – December 26 (National except GE, JU, NE, SO, VS, VD, ZG)
  • New Year’s Eve – December 31 (GL)
  • Restoration Day – December 31 (GE)

Employees in Switzerland benefit from sick pay if they miss work due to illness. 

An employee’s salary will continue to be paid regardless of whether the employer has sickness benefit insurance for employees.

Most employers do have sickness benefit insurance, in which case employees will receive their salary for 720 – 730 days of sickness over a 900 day period depending on the level of insurance. 

If employers do not have sickness benefit insurance, employees must pay an employee’s salary for a certain period of time. This is usually 3 weeks in the first year of employment, increasing each year to a maximum period of 4 months.

Employees cannot be dismissed while on sick leave, and are protected for the following durations of time:

Years of Employment
Vacation Days
1st Year
30 days
2nd – 5th Year
90 days
6th Year and Beyond
180 days

If an employee in Switzerland was to have an accident (regardless of whether the accident occurred in or out of work), employers are required to provide insurance.

Employees are entitled to 80% of their salary from the third day of the accident which is paid over a fixed period of time. The exception is for employees that work less than 8 hours per week.

Maternity Leave

Employees in Switzerland are entitled to maternity leave if they meet the following requirements:

  • The employee has been insured under the OASI/AHV scheme in the nine months leading up to the birth
  • The employee has worked a minimum of 5 months during their pregnancy
  • The employee is still employed, self-employed or in paid employment for their husband’s business

Employees that receive a daily allowance from unemployment, invalidity, health, or accident insurance schemes will also be entitled to maternity benefit based on their previous employment.

Maternity leave lasts for 14 weeks and amounts to 80% of an employee’s earnings (up to a maximum of CHF 220 per day).

The 14 consecutive weeks of leave generally begin once the child is born but may begin later in certain cases such as newborn hospitalization, for example. 

Mothers can extend their maternity leave by 2 weeks, however, this leave will be unpaid.

Paternity Leave

Paternity leave is available for employees who meet the following requirements:

  • They are the legal father of the child
  • They were insured under the OAI/AHV scheme in the 9 months leaving up to the birth
  • They worked for a minimum of 5 months during the pregnancy

Employees receiving paternity benefits will be entitled to 2 weeks of paid leave, amounting to 80% of earnings (up to a maximum of CHF 220 per day). Paternity leave can be taken flexibly – it can be taken all at once or as separate days providing it is taken within 6 months of the birth of the child.

Severance Pay

There is no obligation for employers in Switzerland to pay severance pay to dismissed employees. However, employees may be entitled to severance pay if they meet the following conditions:

  • They are over 50 years of age
  • They have been employed by the same employer for over 20 years
  • They haven’t accumulated adequate pension benefit

Supplementary Employee Benefits in Switzerland

Employers should consider offering supplementary benefits to employees in Switzerland to attract talent and improve employee retention. Supplementary employee benefits that you could offer include:

  • Enhanced parental leave
  • Supplementary pension plans
  • Private healthcare
  • Performance payments
  • Allowances such as food, travel, and housing expenses

Optimize Employee Benefits with RemotePeople

RemotePeople can help you hire employees in Switzerland through our Employer of Record (EOR) services. These services ensure that employee benefits, taxes, and payroll are handled in full compliance with Swiss labor laws—managed by experts familiar with local regulations and procedures.

Our EOR solution simplifies the hiring process in Switzerland, helping your business stay compliant while reducing administrative burden.

We can also help find the best employees in Switzerland for your business via our Switzerland recruitment services. Our team is highly qualified in understanding the Switzerland economy and recruitment industry, helping to find talented people while ensuring employment laws are complied with.