Potential applicants usually focus on 2 main areas when applying for jobs — compensation and benefits. For this reason, employers in Switzerland should not only offer guaranteed benefits to stay compliant with local laws, but also include additional benefits that will help attract and retain talent.
Switzerland compensation laws
Switzerland does not have an official minimum wage, but employees in trade unions often have industry-related minimum salaries.
Any hours worked over the agreed amount of working hours per week are classified as overtime. Employees typically receive 125% of their regular pay as overtime or additional time off.
Guaranteed benefits in Switzerland
As part of your Switzerland benefits plan, you’ll need to provide all statutory benefits to employees. Switzerland has 26 cantons, or states, that have their own public holidays. The only federal holiday is National Day on August 1. Check the list of public holidays in your canton to determine which days employees are entitled to.
Employees must also get annual paid leave. Switzerland employment law stipulates 4 weeks per year, but that can be extended based on the specific employment contract or trade union agreement.
Another guaranteed benefit in Switzerland is maternity leave after 5 months of continuous employment with a company. Birthing employees receive 80% of their full wages for 14 weeks after giving birth and are protected from dismissal for 16 weeks after giving birth as well. Non-birthing parents receive 2 weeks’ statutory paternity leave.
Switzerland benefits management
Another aspect of Switzerland benefits management is offering fringe benefits that could attract top talent to your open positions. Employers in Switzerland often provide supplemental private health insurance policies that cover treatments that are not included in the country’s compulsory health insurance plan.
Switzerland spends more than 10% of its GDP on health. However, an additional policy could improve the standard of room and assistance in case an employee is hospitalized.
Restrictions for benefits and compensation
Most restrictions for benefits and compensation come from trade unions. Although only a small percentage of employees are involved in a trade union, you should make sure your industry is not covered by one.
Switzerland competitive benefits planning
When you expand to a new country, benefits planning will play an important role in your development. You can use your benefits plan to show employees your appreciation and make your company more competitive in the labor market.
Switzerland employee benefits plans
The benefits plan you develop can set the tone for your company’s global growth. While you’re obligated to provide certain benefits due to labor regulations, there’s more freedom to determine fringe benefits. These additional provisions will improve employee satisfaction, retention, and motivation. They can also make your company more attractive to job seekers, shortening the recruitment time.
As your business continues to develop internationally, your benefits plan will contribute to your reputation. Some of the supplemental benefits you might offer include:
- Stock opportunities
- Flexible working hours
- Meal allowances
- Transportation stipends
- Training opportunities
- Additional parental leave
- Supplemental pension
- Holiday bonuses
Legal obligations for employee benefits
While fringe benefits will make your company more competitive in the labor market, you must consider your legal obligations first. Switzerland’s labor laws describe a variety of required provisions, including:
- Public holidays off
- Paid annual leave
- Maternity leave
- Accident insurance
- Social security contributions
While many of these regulations apply to the entire country, public holidays do not. Switzerland has 26 cantons with different public holidays. Make sure you’re aware of the recognized holidays in your region so you can provide the correct days off.
Designing Switzerland employee benefits plans
Designing employee benefits plans can be challenging, especially if you’re operating in an unfamiliar area. The goal should be to recognize employees’ needs without overextending your budget. You can achieve this balance by following a few fundamental steps.
1. Assess your company’s resources and goals.
It’s essential to understand your revenue and expenses as you create a benefits budget. Consider factors like payroll costs, inventory expenses, and rent when determining your spending power.
You can also use this initial step to identify your company’s goals and how benefits can help you achieve them. For example, if you want to compete with a competitor in the area, you can build a benefits package that offers similar provisions.
2. Learn about the labor market.
You have to understand the market to make your plan competitive. You can do so by researching other companies in the area. Look into businesses similar to yours in size and industry to see what type of benefits are standard.
To learn more about employee needs and expectations, consider conducting interviews or surveys. Once you know which benefits workers are looking for, you can prioritize them as your budget allows.
3. Create a plan.
With the information you’ve gathered about your business and the market, you can create a benefits plan. Allocate funds to the required benefits first, then focus on the fringe benefits that are most in-demand.
Average cost of benefits
Every company has a different budget for benefits based on size, location, and industry. While there’s no true average cost, creating a budget based on your unique needs can help you control your spending.
How to calculate employee benefits
Benefits calculations will vary based on your offerings. However, the labor laws offer guidance for calculating required benefits like social security. Both employees and employers must contribute 6.4% of gross pay to the nation’s social security fund. The breakdown for this rate is as follows:
- 5.3% for old age, survivors, and disability funds
- 1.1% for unemployment
How are employee benefits taxed in Switzerland?
Fringe benefits do not affect employee income, making them nontaxable regardless of the type or value. For this reason, supplemental benefits are even more valuable to workers in Switzerland. Developing your tax plan to include a wide range of benefits beyond the requirements can make your company appealing to the local talent pool.
Employee health benefits
Switzerland operates under a universal healthcare system. The program is funded by taxes, social security contributions, insurance premiums, and out-of-pocket payments.
Residents are required to hold a private insurance scheme from a nonprofit provider, but employers are not required to offer this scheme. That said, employers may choose to provide this supplemental coverage as a part of their benefits plan.
Regardless, employers and workers are responsible for social security contributions, which support a portion of the healthcare system.
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