New Pay Equity Laws in Switzerland

The revised Gender Equality Act will go into effect in Switzerland on July 1, 2020. It requires employers with 100 or more employees to conduct an internal wage equality analysis, to have the results of the analysis reviewed by an external body, and confirm the results in writing.

Impacted Employers

Employers with 100 or more employees are obligated to analyse their wage equality for the year in question. For the analysis, all employed persons except apprentices are counted as full employees even if they work on a part-time basis.

Employers are exempt from conducting the analysis if:

• they are already subject to a wage equality analysis in a public procurement or subsidy procedure, provided that the reference month is no more than four years ago; or
• a report has proven that they respect wage equality (subject to the below conditions).

The Analysis

The analysis can be conducted by the employer or appointed third parties by any method provided that it is scientifically and legally compliant. The Swiss federal government offers a free tool (Logib) for the standard statistical procedure that employers can use.

For the reference month, the analysis must record all paid wages (consisting of both basic and social wage components) and personal and job-related characteristics of all employees. Personal and job-related characteristics include education, age, qualifications, experience, duties, and benefits. Differences between women’s and men’s wages for work of equal value are considered wage inequalities if they cannot be explained by objective reasons. The standard statistical procedure tolerates up to a five percent wage difference.

The first analysis must be conducted no later than June 30, 2021. Unlike other countries that require annual reporting, in Switzerland, the analysis must be repeated every four years. However, if initial analysis “indicates that there is no inexplicable wage gap between employees of both sexes” then the employer will be exempt from further wage equality analysis.

Verification of the Analysis

The analysis is subject to the Swiss Code of Obligations and must be reviewed by an independent body. Only accredited auditors, employee representatives according to the Participation Act and organizations that, according to their status, promote equality between women and men or safeguard the interests of employees (trade unions) and have existed for at least 2 years, are authorized to review an analysis.

The independent body must review the analysis in terms of formal compliance rather than material assessment. The details of the review (e.g. scope, requirement, procedure, etc.) are only stipulated for accredited auditors and must be determined on an individual basis by agreement from the other bodies.

Accredited auditors must report their results within one year of conducting the analysis and by June 30, 2022, at the latest.

Information About the Results

Employers are obligated to inform their employees in writing of the results of the analysis within one year. The results must also be published to shareholders of listed companies as part of their annual financial statement.

Soft Sanctions

Wage inequalities do not directly impose legal sanctions but employers with wage inequalities must repeat the analysis until equality is achieved. Employers operating with wage inequalities risk wage discrimination claims as well as damage to their reputation.

Comment

Employers that will likely have to conduct the analysis should start collecting data required for the analysis and may wish to proactively conduct trial-analysis.

Written by Ueli Sommer of Walder Wyss and Roger James of Ogletree Deakins

© 2020 Walder Wyss and Ogletree, Deakins, Nash, Smoak & Stewart, P.C.