Business travelers & Posted workers - Labor market controls in Switzerland
As a rule, a control by the Swiss labor market authority takes place on the customer site, i.e. the inspector of the labor market authority goes personally to the offices (or other, specified locations) in Switzerland and checks all files for the foreigners working in the company.
In particular, the Labor Market Inspector will check whether:
- a work permit has been obtained and it is on record. – We, therefore, recommend our clients to forward a copy of the notification made or the work permit received to the Swiss client or host company.
- the customary Swiss minimum of the local industry is being paid. - The labor inspector will explicitly request proof of payment, which shows how much the business traveler (has) earned during the posting in Switzerland. It is well known that this refers to payroll accounting including payment transactions. If these are not available, they must be presented after the inspections.
- the mandatory provisions of Swiss labor law are complied with. - Especially with regard to working hours, public holidays, entitlements to overtime, weekend work, night work, etc. There is a legal documentation requirement in Switzerland, especially regarding effective working hours, so that the inspector generally requires the foreign posting company to report the work. If working hours are not recorded, this is sanctioned in most cantons (especially in the canton of Ticino). A fine of between CHF 400 and 600 is common.
- the A1 social security certificate for posted workers is available. - It is imperative that all posted workers are covered by social security and health insurance during the posting in Switzerland. This is a product of the EU Posting of Workers Directives, which are prescribed and implemented by the Swiss Posting of Workers Act and the Posting of Workers Ordinance. Depending on the country of origin, the deadlines for issuance are very long, which is why the A1 certificate respectively Certificate of Coverage is to be obtained before the start of the posting or early enough for all posted workers.
- the posting expenses for the actual working days are borne by the foreign employer (posting company). - It must be proven that the expenses for travel, accommodation and meals have been reimbursed by means of proof of transaction. The reimbursement of self-paid expenses can be proved by the fact that these items are positioned separately on the payslip or if the payment is made by means of a separate transaction. It is important that the foreign company can prove these aspects, regardless of whether by means of payroll accounting or bank transactions. In most cases, the labor market inspector requires both to complete the proof.
In addition, the following documents must be submitted:
- Employment contract between the foreign employee and the foreign company. - If such a document is missing, further evidence in this regard, such as a signed offer letter, will be accepted.
- Project contract with the Swiss customer and the invoices issued. - If such a document is missing, further documents in this context such as purchase orders, order confirmations by email or signed offers will be accepted.
- Personal documents of foreign workers such as passport, ID, CV, copy of diplomas for the purpose of calculating the Swiss minimum wage.
If the inspector of the labor market authority finds a violation of the Posting of Workers Act, the Foreigners and Integration Act and/ or of Swiss labor law, usually only a warning is issued, provided it is the first violation. In general, a violation of the documentation obligation will always be fined.
On the one hand, it is the responsibility of the employer abroad to comply with Swiss regulations in general and, on the other hand, it is the responsibility of the employer in Switzerland to ensure that the employee has a valid work permit. Therefore, compliance with Swiss posting law, including liability, is the joint responsibility of the HR managers on both sides.
In practice, we see many different sanctions such as fines, but also entries on the "black" SECO list, which means that the employer is blocked from further work permits in Switzerland for at least one year. Fines are the most common sanctions and are imposed based on the employee's salary, so it can be a very high amount depending on the management level of the posted worker.
That's why the golden rule applies: compliance in Switzerland costs less than taking the risk of possible violations.