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WORKING IN SWITZERLAND

Where is Switzerland’s highest minimum wage?

Unlike most European countries, Switzerland doesn’t have a national minimum wage. But five cantons have gone against this trend.

Published: 1 February 2023 11:55 CET
Updated: 9 January 2024 10:16 CET
A person cleans a window
Minimum wage, which is especially needed in low-paid sectors such as cleaning, is going up in Germany. Image by Simon Kadula from Pixabay

Even though its salaries are among the highest in the world, Switzerland is one of only five nations in Europe — the others being Sweden, Denmark, Iceland, and Norway — that has never introduced minimum wages nationally.

In 2014, Switzerland held a referendum on whether to set the minimum pay at 22 francs per hour, but the move was rejected by 76 percent of voters.

They heeded the government’s warnings that implementing a set wage would be detrimental to Switzerland’s prosperous economy, as it would raise production costs and jeopardise jobs by putting smaller companies— which cant’s afford to raise their workers’ wages — out of business.

However, the defeat of the minimum salary on the national level has not prevented individual cantons from introducing their own rules.

To date, several have done so.

At 24.32 francs, Geneva has the highest minimum hourly salary. (Exceptions are employees in the agriculture and floriculture sectors, who have their own minimum pay of 17.87 francs / hour).

Next is Basel-City, (21.45 francs an hour), while Neuchâtel and Jura set it at 20 francs, and Ticino at 19.75 francs.

These salaries, negotiated by unions on behalf of workers, reflect the cost of living in each of these regions, which explains why some wages are higher than others.

In 2023, Zurich residents also voted to introduce a minimum hourly wage of 23.90 per hour.

It was was supposed to come into effect from 2024, but now it will take longer for this measure to be implemented — if it will be at all — because this move is being challenged by employers’ associations. 

Not everyone, however, is subject to minimum wages: most employers already pay more than the minimum mandated by law in those cantons.

Why aren’t more cantons / cities introducing minimum wages as well?

Aside from the widespread belief (as mentioned above) that a set wage harms the economy, the country already has strong labour laws which protect workers in terms of wages, work conditions, and other employment-related rights.

Additionally, the Swiss believe that fair and equitable pay is already guaranteed by collective bargaining agreements (CLA), contracts that are negotiated between Switzerland’s trade unions and employers.

They cover a minimum wage for each type of work, in addition to regulations relating to work hours; pensions; payment of wages in the event of illness or maternity; vacation and days off; and protection against dismissal.

CLAs are sector-specific; in other words, they take into account the particular aspects of each branch. As an example, Switzerland’s largest labour union, The Swiss Federation of Trade Unions (UNIA), maintains 265 collective agreements in the areas of industry and construction.

READ ALSO: What is a Swiss collective bargaining agreement — and how could it benefit you?

In fact, there is a push among some legislators to scrap cantonal minimum wages altogether in favour of CLAs.

If the Federal Council confirms the scope of application of the CLAs — in other words, that they do indeed supersede cantonal rules — minimum wage laws would no longer be valid.

To date, however, the Federal Council has not acted on this.

READ ALSO: EXPLAINED: Why Switzerland could scrap the minimum wage?
 
 

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WORKING IN SWITZERLAND

The pitfalls of Switzerland’s social security system you need to avoid

In most cases, Switzerland’s social benefits system functions well. But there are also some loopholes you should know about.

Published: 24 April 2024 13:37 CEST
The pitfalls of Switzerland's social security system you need to avoid

The Swiss social security system has several branches: old-age, survivors’ and disability insurance; health and accident insurance; unemployment benefits, and family allowances.

This is a pretty comprehensive package, which covers everyone who pays into the scheme for a wide variety of ‘what ifs’.

As the government explains it, “people living and working in Switzerland benefit from a tightly woven network of social insurance schemes designed to safeguard them against risks that would otherwise overwhelm them financially.” 

But while most residents of Switzerland are able to benefit, at least to some extent, from this system, others don’t.

What is happening?

If someone becomes ill or has an accident, Switzerland’s compulsory health insurance and / or accident insurance will cover the costs.

However, a prolonged absence from work can become costly.

That is especially the case of people employed by companies that don’t have a collective labour agreement (CLA), a contract negotiated between Switzerland’s trade unions and employers or employer organisations that covers a wide range of workers’ rights. 

READ ALSO: What is a Swiss collective bargaining agreement — and how could it benefit you?

It is estimated that roughly half of Switzerland’s workforce of about 5 million people are not covered by a CLA.

If you just happen to work for a company without a CLA, your employer is not required to pay your salary if your illness is long.

You will receive money for a minimum of three weeks – longer, depending on seniority — but certainly not for the long-haul.

You may think that once your wages stop, the disability insurance (DI) will kick in.

But that’s not the case.

The reason is that DI can be paid only after a year after the wages stop. In practice, however, it sometimes takes several years of investigations and verifications to make sure the person is actually eligible to collect these benefits, rather than just pretending to be sick. 

In the meantime, these people have to use their savings to live on.

What about ‘daily allowance insurance’?

Many companies (especially those covered by a CLA) take out this insurance, so they can pay wages to their sick employees for longer periods of time.

However, this insurance is optional for employers without a CLA is place.

As a result, small companies forego it because it is too much of a financial burden for them.

And people who are self-employed face a problem in this area as well: insurance carriers can (and often do) refuse to cover people they deem to be ‘too risky’ in terms of their age or health status.

Critics are calling the two situations —the length of time it takes for the disability insurance to kick in and gaps in the daily allowance insurance—”perhaps the biggest failures of the social security system.”

Is anything being done to remedy this situation?

Given numerous complaints about the unfairness of the current system, the Social Security and Public Health Commission of the Council of States (CSSS-E) will look into the “consequences of shortcomings and numerous dysfunctions in long-term illness insurance.”

But not everyone in Switzerland sees a problem in the current situation.

According to the Swiss Insurance Association (SIA), for instance, “making daily sickness allowance insurance compulsory for employers would not have the desired effect. Due to false incentives, it would only exacerbate the upward trend in costs and premiums.”

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