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Swiss companies are currently being controlled for compliance with the accompanying measures like never before. The inspector of the Swiss labor market authority personally visits the offices or specified locations and checks whether all files for the foreigners working in the company are available.
We therefore recommend that our clients always forward a copy of the notification made or the work permit received to the Swiss client or company. The most important issue in a labor market inspection is the payment of the Swiss local and industry-standard minimum wage. The labor inspector will expressly request proof of payment showing how much the foreigner (has) earned during the posting to Switzerland. As is generally known, this refers to the payslips including the payment transaction. If these are not available, they must be submitted after the inspection. The labor inspector will request the receipts for the posting expenses, which must be paid by the foreign employer (posting company).
There is a legal documentation obligation in Switzerland, in particular regarding the actual working hours, so that the inspector generally requests the work reports from the foreign posting company. If the 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.
It is mandatory that all posted workers are covered by social and health insurance during their posting to Switzerland. This is a product of the EU Posting of Workers Directive, which is 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 issuing these are very long, which is why, among other things, A1 certificates or posting certificates for the UK must be obtained for all posted workers before the posting begins.
If the inspector of the Swiss labor market authority discovers a violation of the Posted Workers Act, the Foreign Nationals and Integration Act and/or Swiss labor law, a warning will generally only be issued if it is the first violation.
A breach of the documentation obligation is generally always 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 client in Switzerland to ensure that the employee has a valid work permit. Compliance with Swiss posting law and the associated liability issues is therefore 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 barred from obtaining further work permits in Switzerland for at least one year. These lists are updated monthly by SECO and are publicly accessible under the link: Entsendung (admin.ch)
This list not only shows the names of the companies but also their address abroad, the type of violation, the start and end of the ban on providing services and its specific duration in months. Details are also provided on the imposition of a fine, inspection and procedural costs as well as the canton of the authority imposing the ban. The shortest ban is 12 months and the longest is 60 months (5 years). The most common reasons for a ban on services under Art. 9, para. 2 (e) of the Posted Workers Act are as follows:
- Violation of the duty to provide information during an inspection (knowingly providing false information or refusing to provide it)
- Resisting the inspection or obstructing the inspection in any way
- Non-payment of the amount in the event of legally binding administrative sanctions due to non-compliance with the documentation obligation and/or the minimum regulations on wage and working conditions, missing notifications or work permits
Below we present an excerpt from the current "black" list in a blurred format, for data protection reasons. Under no circumstances do we want to highlight specific companies from the entire long list of 7 pages:
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.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
