What are the main requirements if a foreign employer plans to send employees to Switzerland?
The Swiss Posted Workers Act (EntsG) applies to postings to Switzerland. It intends to prevent foreign employers from employing their workers in Switzerland at dumping prices and under poor working conditions.
So what are the differences between posting of employees either to an external client or to an own subsidiary and what are the differences between employees from EU/EFTA countries or from non EU/EFTA countries (so called third countries)?
A. Posting of employees to an external client
“External posting” means, that the employee temporarily fulfils an assignment for his foreign employer at a Swiss client. There is a project contract agreed between the Swiss client and the foreign employer. The posting is allowed for a limited period (maximum 2 years), and related to a special project, service or client.
1. Under 90 days
If an employer from an EU/EFTA country wants to send an EU/EFTA citizen or a person from a third country to Switzerland, the following main requirements needs to be considered:
- No working permit is necessary, based on the Agreement for Free Movement of Persons between EU/EFTA and Switzerland;
- there is a reporting obligation for postings over 8 days a year via an online reporting tool; but for certain sectors (i.e. hotel, restaurant, construction sector), the obligation to register the employee exists from the first day, no matter how long the posting lasts;
- the employment conditions of the foreign employees must be in accordance with the conditions of Swiss law (salary, working / rest time, holidays etc.);
- if the posting is only for a few days or weeks, an additional posting contract is not necessary; a posting contract is a contract that replaces or supplements the previous employment contract for the duration of the posting and regulates all details concerning the posting; in the case of a short posting period, an expense regulation will be more practical;
- for employees of third countries, the same easy way only applies, if they have already been employed by the EU/EFTA employer in an EU/EFTA country for more than 12 months prior to the posting
If an employer from a third country wants to send employees (EU/EFTA or third countries) to Switzerland, the main requirements are:
- a working permit is necessary, if the posting is for more than 8 days a year, with exemptions for specific sectors for which a permit is needed from the first day on;
- the economic interests of Switzerland must be met;
- employee must be a manager, specialist or qualified person;
- application must be in line with the Swiss salary and working conditions.
Please be aware, that the 90-days are attributed to the employer, so if he sends several employees at different times, their stays in Switzerland are added together.
2. Over 90 days
For postings of more than 90 days, EU/EFTA citizens can no longer profit from any privileges, because the Agreement between EU/EFTA and Switzerland on the Free Movement of Persons is not applicable. So it makes no difference whether the employer and employee are from an EU/EFTA country or a third country. The same – now stricter – requirements of the Swiss migration law apply:
- a working permit is necessary;
- the economic interests of Switzerland must be considered, including of the priority of Swiss nationals and residents;
- only managers, specialists and qualified employees;
- Swiss salary and working conditions must be met;
- a posting agreement is necessary; and so forth
B. Posting of employees to an own subsidiary or own branch
If a company sends employees to a subsidiary or branch in Switzerland, this is an internal posting without the involvement of a third company. This is basically a case of the per se prohibited hiring out of staff from abroad. Staff leasing is when the employer (lender) hires out his employee to a third party (company of assignment). The lender remains the legal employer, the company of assignment becomes the de facto employer and has the authority to issue directives, etc.. In the case of a posting, on the other hand, the right to issue instructions etc. remains with the sending employer.
Although the hiring out of staff from abroad is generally prohibited, Switzerland tolerates the hiring out of staff within a group of companies. But please be aware, that this will only be accepted if
- it is an individual or exceptional case; or
- if the sole purpose is the acquisition of experience (technical, linguistic) or the transfer of know-how within the group
The requirements and differences between citizens from EU/EFTA or third countries and also the differences between a posting under or over 90 days are mainly the same as discussed before: EU/EFTA citizens need for postings under 90 days no working permit, for a posting of more than 90 days, a working permit is necessary. Employees of third countries need always a working permit, only highly qualified employees are allowed and the Swiss economic interests must be considered etc.
Author: Cornelia Arnold
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