Rise in Investigations Into Foreign Project Workers

Many companies accept projects in Switzerland and have to send their employees to Switzerland in order to fulfill their contractual obligations. There has been a significant rise in the number of investigations by the Swiss authorities into the legality of these arrangements and an increase in the fines being levied for noncompliance.

EU Employers

As a result of treaties between Switzerland and the European Union (EU), EU companies may send employees to Switzerland for up to 90 working days per calendar year without the need for a work permit. It is important to note that the 90 days is on an aggregate basis for the company and not per employee. The rule only applies to EU citizens and third country nationals who have held a valid EU work permit for at least 12 months. For longer stays a proper work permit is required.

Switzerland has introduced an online registration process for such workers. Registration is required at least eight days before the start of work in Switzerland, except in cases of emergency. In most sectors there is no need for registration where the work will last under eight days per calendar year (on an aggregate company basis). However, even these short work periods need to be registered where the business in question is in the hospitality, cleaning, or security services sector or in relation to market-traders, stall-keepers, circus, and fairground workers.

A key factor is that only a company’s own employees can be posted and registered. Temporary workers hired through an agency are forbidden because “employee lending” from abroad into Switzerland is prohibited. Furthermore, the employment of employees solely for the purpose of sending them to a project in Switzerland is, in most cases, classified as prohibited employee lending.

An employer sending posted workers to Switzerland must comply with mandatory working conditions such as health and safety standards, maximum working hours, minimum breaks, minimum vacation requirements (generally 20 days on an annual basis), and minimum salary requirements. There is also a requirement for the employer to pay expenses such as food and accommodation. The Swiss government has established a commission that is monitoring the working conditions in this area, and special commissioners make checks regularly.

Fines of up to CHF 30,000 (USD 32,000 : GBP 23,000 : EUR 26,000) are payable for breaches. In serious cases, a company can be banned from providing services in the Swiss market for a period of five years.

Non-EU Employers

For non-EU companies, no online registration process is in place. Instead, employers are required to obtain a proper work permit for each employee. All of the above rules apply to non-EU employers. In addition, non-EU employers may only send specialists to Switzerland, and they must pay employees that they send at least the average typically paid in Switzerland and not just the minimum wage.

In addition to the remedies outlined above, noncompliance for non-EU employers can also attract a criminal penalty for responsible managers of up to 3 years’ imprisonment and substantial fines of up to CHF 1,080,000  (USD 1,162,000 : GBP 820,000 : EUR 930,000) (but, in reality, they are much lower). This is an additional penalty for the responsible managers; the penalty for the company is the same as for EU employers.

Summary

It can take up to three months to get a work permit, and thus, it is important to start the process as early as possible.

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