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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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MONEY

Is it better for consumers in Switzerland if the Swiss franc is strong or weak?

Although Switzerland’s currency has weakened slightly against the euro in recent weeks, it remains strong. Is it good or bad news for consumers?

Is it better for consumers in Switzerland if the Swiss franc is strong or weak?

Generally speaking, when a country’s currency is strong — as the franc is right now  against both the euro and dollar — consumers benefit on several fronts.

The main reason is that they will get more bang out of their francs, especially in these situations:

Imported goods

Since the exchange rates between the Swiss and foreign currencies are in franc’s favour, any merchandise that comes from abroad will, in principle, be cheaper.

If you go shopping in a supermarket and find, for instance, that the price of Swiss eggs hasn’t budged (and certainly not downward), you will have more luck with eggs imported from Germany or France.

However, while you may see some savings when purchasing foreign goods, this may not be a huge amount.

The reason, according to Moneyland consumer platform, is that “Swiss importers are not obligated to pass on extra profits earned on exchange rates to customers – and many of them don’t reduce prices at all.” 

Cross-border ‘shopping tourism’

Most products are cheaper — and sometimes by much — in other countries.

Even though inflation rates are higher abroad than they are in Switzerland, as is the Value-Added Tax, the franc’s power means it is still worth your while to buy your groceries in France, Italy, Germany, and other eurozone countries as well.

That, however, doesn’t mean that all products are cheaper abroad – it all depends on the specific goods and services in question.

For example, in general, electronics have lower price tags in Switzerland than in the EU countries.

READ ALSO: The one product that is cheaper in Switzerland 

Foreign vacations

With the franc stronger than the euro and US dollar, you can definitely benefit from travel abroad.

Whether just for a long weekend or full-scale holidays, you will be able to get more out of your money in many foreign countries, at least in terms of accommodations and food, than you would for the same amount of money in Switzerland.

Keep in mind, however, that the strong franc will not compensate for the cost of getting there and back, as the prices for airplane tickets, train travel, and petrol remain high.

All that is good, but is there a flipside as well?

The biggest ‘negative’ of the strong franc is that export-based companies suffer, because the goods they sell are too expensive abroad.

You may argue that this affects economy as a whole rather than individual consumers, and you’d be right — but only up to a point.

That’s because whatever happens in the economy at large will eventually trickle down to, and affect, the population, along with consumer confidence and spending habits.

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