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Minimum wage in Switzerland: What you need to know

Feeling the pinch in Switzerland? Here’s what Swiss law says about minimum wage.

Minimum wage in Switzerland: What you need to know
Photo: Depositphotos

After being first implemented in New Zealand and Australia in the 1980s, minimum wage laws have spread across the world. Most European countries have now put in place some form of minimum wage limit. 

When compared to its European neighbours – or countries globally – Switzerland is known for its high salaries. Therefore, it is perhaps surprising to find out that the country does not have an officially mandated minimum hourly wage. 

One canton – Neuchâtel – has put in place minimums, while Jura has recently approved a minimum via a referendum, but hasn’t yet put it into law. 

REVEALED: The best and worst jobs in Switzerland

The remaining cantons have not followed suit, while there is no minimum at the federal level. In 2014, Switzerland held a referendum on whether to set the minimum wage at CHF22, but the move was rejected. 

That does not however mean that your employer is free to pay you as much – or as little – as he or she wants. Instead, the minimum amount you can be paid will be determined through negotiations with your employer which will may feature a trade union representative. 

Road work. Image: Depositphotos

Minimum wage in Switzerland

To expats arriving from other countries – particularly English-speaking ones – the idea of not having a federally-set minimum wage is sometimes hard to grasp. 

Whether this be an hourly amount or one which is set for full or part-time hours, setting a minimum standard in specific industries is a common way to ensure workers aren’t underpaid or unpaid. 

READ: The cost of parenting in Switzerland – and how to save money

In Switzerland, minimum standards are not set by law, but by collective or individual bargaining with your employer. 

Generally, collective agreements will be negotiated by trade union representatives and will apply to an entire industry or in an entire canton, meaning that you yourself do not need to negotiate. 

There are however some jobs or industries – usually for jobs with higher incomes or which are less common – where negotiations will take place on an individual basis. 

These agreements will not just cover a minimum payment amount, but they will also set benefits, holiday pay and working conditions. 

The government has published a list of collective agreements based on different industries and cantons to give you an idea of how much you will be paid. This can be found here

Minimum wage in Europe

In total, 22 of the 28 European Union countries have an officially prescribed minimum wage. 

The EU countries without a legally mandated minimum wage include Italy, Sweden, Finland, Austria and Denmark, while non-EU countries like Switzerland and Norway also don’t have federally set minimums

Minimum wage in Europe in 2018 (in $US) Image: Wikicommons

While this lack of a statutory mark might be unusual, in these countries – as with Switzerland – there are various other collective agreements and influences which will prevent employers from undercharging workers. 

Indeed, the ‘nominal’ minimum wages in these states – the figure which is generally seen as the minimum wage without being legally mandated – is higher than those in some countries where a specific mark is set. 

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ECONOMY

Switzerland must strengthen control of its financial sector, IMF warns

The IMF urged Switzerland on Thursday to strengthen its financial sector regulation as supervising UBS has become "more challenging" since it grew into a global banking behemoth after its takeover of Credit Suisse.

Switzerland must strengthen control of its financial sector, IMF warns

Switzerland’s biggest bank was strongarmed by the government into buying Credit Suisse last year over fears that the second largest lender in the country might go under and spark a global financial crisis.

“Lessons from the CS (Credit Suisse) case should inform further reforms to strengthen the regulatory and supervisory framework,” the IMF said in a statement concluding its annual staff mission to Switzerland.

Like UBS, Credit Suisse was among 30 international banks deemed too big to fail due to their importance in the global banking architecture.

The merger raised serious concerns in Switzerland around jobs, competition and the size of the resulting bank relative to the Swiss economy.

“The complexity of the combined bank’s global operations also makes supervision more challenging,” the International Monetary Fund said.

“In the event of future crisis, the previous merger options may no longer be feasible,” Pelin Berkmen, the head of the IMF delegation, warned at a press conference.

The Washington-based institution noted that UBS is the largest “G-SIB” — global systematically important bank — relative to its home country’s economy.

The IMF said the “powers and resources” of the Swiss financial sector’s supervisor must be increased “to enable early and effective intervention” when necessary.

The G20’s Financial Stability Board, set up following the 2007-2008 global financial crisis to lead industry reforms, made a similar recommendation in February.

The Swiss Financial Market Supervisory Authority (FINMA) has also called for increased powers to punish bad banks.

UBS bought Credit Suisse at the bargain price of $3.25 billion.

The bank initially reported a net profit for 2023 of $29 billion but it published a revised figure of $27.8 billion on Thursday after reviewing the fair-value estimate of the deal.

The IMF said the Swiss economy “boasts strong fundamentals” and growth is “expected to recover gradually this year” to 1.3 percent, followed by 1.4 percent in 2025.

But it added the country faces “several challenges” including “mounting spending pressures”, future financing gaps in the pension system and vulnerabilities in the real estate sector.

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