With the deepening of globalization, when enterprises expand their business in multiple countries, cross-border labor compliance has become one of the most complex and severe challenges. To help enterprises systematically address this issue, we have collaborated with top labor lawyers from over 50 major jurisdictions worldwide (all recommended by Chambers, The Legal 500, or equivalent institutions) to jointly compile a Chinese-English labor & employment compliance guide exceeding 1 million words, and we will continuously update relevant key points.

This article publishes the key points of labor & employment compliance by September 2025 in Switzerland. 

01 Overview of the Labor Law System

1.Legal System

Switzerland operates under a civil law system.

2.Resources and Agencies

The main statutes and regulations governing employment in Switzerland are the Federal Constitution, the Code of Obligations (“CO”) and the Labor Act (“LA”) with its ordinances. 

02 Employment Qualifications and Classification

1.Employment Age

In Switzerland, the minimum general employment age is 15 years, subject to restrictions on the type of work, duration of work and daily and weekly working hours.

2.Qualifications for Employment

A foreign company can, in principle, hire employees in Switzerland without establishing a permanent local entity.

3.Classification of Employment

A distinction is made between private law (with private companies) and public law (with state authorities) employment relationships. In private settings, employees and independent contractors are in focus.

4.Foreign Workers

Save for any special requirements, foreign workers can generally be employed in the same sectors and positions as local workers. Swiss immigration system primarily distinguishes between EU/EFTA nationals and non-EU/EFTA nationals, as well as between local employment and postings to Switzerland. 

03 Recruitment and Employment Contracts

1.Background Examination

While conducting background checks, employers (as well as third-party background check providers) must primarily comply with the Federal Act on Data Protection (“DSG”) and its ordinance when processing applicants’ personal data.

2.Contract Types

The most common type of employment contract in Switzerland is the open-ended contract. Fixed-term contracts are also permitted and are typically concluded for a specific period or project, generally expiring automatically at the end of the term or when the task is completed. Employment contracts may additionally be concluded for a defined piece of work, on an hourly basis or part-time.

3.Probationary Period

By law, the first month of employment is considered the probationary period. The parties may mutually agree in writing on a longer probationary period, which must not exceed three months (this is very common). The probationary period may also be waived entirely. Any inability to work during the probationary period (e.g., illness) may extend the probationary period.

04 Working Standards

1.Remuneration and Statutory Benefits

By law, the employee's wages must be paid at the end of each month, unless shorter periods have been agreed or are customary, and unless otherwise specified in NAVs or CLAs. It is customary for the monthly salary to be transferred to the employee's bank account around the 25th calendar day.

2.Social Security and Employment Taxes

In a nutshell, Switzerland has three types of social insurances, whereby the first and second are mainly relevant from an employment perspective:

• Federal pension (government established)

• Occupational pension (private carriers)

• Private Pension (private carriers)

3.Working Hours

Work on Sundays (from Saturday at 11 pm to Sunday at 11 pm) is generally prohibited. The national holiday (1 August) and up to eight cantonal public holidays are treated as Sundays as well. Official authorization for an exemption from the ban on working on Sundays and public holidays may be granted if, e.g., there is a compelling operational need. Furthermore, certain types of work are exempt from the authorization requirement under special statutory provisions.

4.Rest and Leave

Over the weekend, generally a continuous rest period of 35 hours (11 hours of daily rest + 24 hours on Sunday) must be granted, which must include the period from 11 pm on Saturday to 11 pm on Sunday. If the working week exceeds five days, a half-day off of at least 8 hours must be granted each week before or after the daily rest period.

05 Occupational Health and Special Protection

1.Occupational Health and Security

Employees are compulsorily insured against accidents at work. If they work at least 8 hours per week, non-occupational accidents are also insured. The employer pays the premiums for occupational accident insurance, while the employees pay the premiums for non-occupational accident insurance (deviating agreements in favor of the employees are permitted).

2.Special Protection

Pregnant women, for example, enjoy protection against dismissal during pregnancy and the 16 weeks following childbirth, as well as special rules on working hours and health protection at the workplace. Young workers are subject to strict limitations regarding working hours, night work, and hazardous activities to safeguard their health and development. 

06 Personal Information and Privacy

1.General Rules

Employee privacy and personal data are protected primarily by the DSG and its ordinance. Within the employment context, the CO additionally requires that employers may only process data relating to an employee insofar as it concerns the employee’s suitability for the employment relationship or is necessary for the performance of the employment contract. Any processing must be carried out in good faith, be proportionate, and serve a legitimate purpose.

2.Transnational Transfer

According to the DSG, personal data may generally only be transferred abroad if the destination country has an adequate level of data protection. Data may therefore be disclosed abroad if the legislation of the recipient country guarantees adequate protection. 

07 Anti-Discrimination and Anti-Harassment

1.General Rules

Employers are prohibited from discriminating against employees or job candidates and they are required to prevent and address any form of workplace harassment, particularly mobbing and sexual harassment. Employers must take appropriate measures to protect employees from discrimination and harassment, investigate complaints promptly and take corrective action where necessary.

2.Protective Characters

The main protected characteristics under anti-discrimination rules include, among others and depending on the underlying law, race or ethnic origin, gender, age, religion or belief, disability, sexual orientation, political opinion, and marital or family status.

08 Internal Policies

1.Applicability

Employers commonly regulate standard terms and conditions of employment by internal policies (e.g., HR handbooks, codes of conduct, IT policies, car policies, expense policies, remote work policies etc.).

2.Validity

Internal policies are generally only legally binding if they have been duly established by the employer and handed out to the employee or otherwise brought to their attention and approved by them. The consent of non-contracting parties such as authorities or employer representatives is generally not required.

3.Whistleblowing

In Switzerland, there is currently no private law specifically dedicated to whistleblowing. Protections for whistleblowers are therefore derived from general labor law principles, including protection against unfair dismissal, and from data protection rules under the DSG. 

09 Transactions

1.Employment Relationship

Whether and how employees’ employment contracts continue after an M&A, equity, or asset transfer depends on the nature of the transaction and the applicable law. In a share (equity) deal, the legal employer generally remains the same, so employment contracts, including positions, remuneration, and terms, generally continue unchanged.

2.Compensation

Employees are not entitled by law to any special compensation solely because of an M&A, equity, or asset transfer. However, compensation or benefits may be triggered if specifically provided for e.g., in employment contracts or company compensation schemes. 

10 Termination of Employment

1.Termination Grounds

In Switzerland, in principle freedom of dismissal applies, i.e. an employer does generally not have to have specific reasons for dismissal unless the underlying grounds are unlawful / discriminatory. Additionally, under Swiss law, termination with immediate effect is possible with good cause.

2.Termination Procedure

By law the notice periods are based on the length of service, as follows (per the end of a calendar month):

• First year of service: 1 month

• Second to ninth year of service: 2 months

• From the tenth year of service: 3 months

3.Termination Protection

Despite the freedom of dismissal, a dismissal can be abusive in certain cases. The CO sets out a non-exhaustive catalogue of abusive grounds for termination.

4.Severance and Compensation

In case of an ordinary dismissal, there is generally no entitlement to severance pay in Switzerland unless specified by contract, CLAs, or in cases of wrongful dismissal. For employees aged 50 or older with at least 20 years of service, employers must pay severance compensation ranging from two to eight months' salary. However, contributions to mandatory pension plans can offset this requirement (wherefore this case is highly rare in practice).

5.Wrongful Termination

In the event of an abusive or wrongful termination, the employment relationship is considered terminated. The party that wrongfully terminates the employment relationship (based on abusive ground or a protected category of employees) may be primarily required to pay compensation of up to six months' salary. The GlG offers special remedies such as re-instatement, which is rather rare though.

6.Mass termination and Layoffs

Before proceeding with mass terminations, the employer is required to inform and consult with the employees’ representatives or, if none exist, directly with the employees. Employees must be given the opportunity to make suggestions on how to avoid or limit the dismissals and mitigate their consequences. The employer is also obliged to notify the relevant authorities. If mass termination processes are not complied with, the termination might be void or unlawful. In larger companies, there is a duty for companies to negotiate a social plan. If, at the end of the negotiations, the parties have not agreed on a social plan, an arbitral tribunal must be appointed. 

11 Confidentiality, Non-Compete, and Non-Solicitation

1.Confidentiality

While the CO already imposes a general duty of loyalty and confidentiality on all employees, employers often include confidentiality clauses in employment contracts to strengthen legal protection (including penalties in the event of a breach).

2.Non-Compete and Non-Solicitation

It is common practice in Switzerland to include (post-contractual) non-competition and non-solicitation clauses in employment contracts. To be legally valid, such clauses must be concluded in writing. Additionally, these clauses are only enforceable if the employee, by virtue of their position, has the potential to harm the employer using knowledge relating to, and had insight to the employer’s clientele or business and manufacturing secrets.

12 Work Representation and Trade Unions

1.Work Representation

Under the MitwG, employees in private companies with at least 50 employees have the right (but not the duty) to elect employee representatives. The establishment of such a body requires a request from at least one-fifth of the employees. In larger companies with more than 500 employees, the request must come from at least 100 employees.

2.Trade Unions

In Switzerland, trade unions are voluntary organizations that are rooted in the Federal Constitution and are often affiliated with umbrella organizations such as the Swiss Trade Union Confederation (“SGB”). In Switzerland, trade unions have the right to organize employees, represent their interests, engage in collective bargaining, and conclude CLAs. 

13 Dispute Resolution

1.Procedures & Enforcement

In Switzerland, labor disputes generally begin with the employee or employer submitting the case to the competent conciliation authority to seek an amicable settlement. If conciliation fails, the authority grants authorization to proceed, allowing the case to be brought before the competent labor or district court.

2.Waiver & Enforcement

An employee may agree to waive non-mandatory provisions both during and after the employment relationship. However, during the term of the employment relationship and for one month after its termination, an employee may not waive claims arising from mandatory provisions of the law or from mandatory provisions of CLAs. One month after the end of the employment relationship, the waiver of employment claims even of mandatory provisions is permissible.

14 Others

1.Latest Development & Trends

Current labor market trends particularly show a clear shift toward more flexible and remote employment arrangements. In response, a new framework for teleworking is being introduced that adapts working time regulations to remote working and introduces a right to be unreachable during rest periods and on Sundays.

2.Cultural and Religious Considerations

Swiss business culture is generally punctual, polite, and consensus-oriented, with workplaces tending to be relatively non-hierarchical and only regulated as necessary as Swiss employees prefer being trusted and given freedom to act independently.

* To avoid ambiguity, this article should not be regarded as legal advice.

Authors

Adrian Tüscher is the Head of KPMG Law Switzerland and leads its HR Legal Services Practice. He also serves as KPMG’s Global Employment & Labor Law Lead. As a Swiss-qualified attorney, Adrian has been advising multinational clients for over 16 years on legal, compliance, and strategic matters related to workforce management, particularly in restructuring and cross-border contexts. His expertise covers employment, corporate, and contract law, with a strong focus on complex labor issues such as global employment company setups, freelancer compliance, redundancy programs, and international matrix organizations. 

Translator

Zhou Hao, Master of Laws, Associate at Anli Partners. Areas of expertise: Labor Law, Dispute Resolution, ESG Compliance.