By engaging a SECO licensed Swiss payroll company, foreign recruitment agencies may not necessarily be legally compliant in Switzerland. Learn what full legal compliance means for international agencies. Stephen Clothier, Head of IT & Business Services at Accurity, explains what full legal compliance involves when an agency supplies contractors in Switzerland.
Switzerland is a rich market with an established demand for highly skilled personnel. To meet this demand Swiss companies are increasingly looking to specialist international recruiters to source best-of-class personnel from the EU/EFTA. They often then lease these employees on short term contract positions.
Unless a personnel agency has a SECO Personnel Leasing License they are not permitted to employ contractors and lease them to Swiss clients. Therefore international recruiters typically retain a SECO licensed company (such as Accurity) to perform the employment and leasing function.
However this is not the end of the story!
Staff leasing companies and clients are now coming under scrutiny, as some have not interpreted the rules of personnel supply to Switzerland correctly. Supply is governed by the rules of what constitutes direct and indirect supply. These rules are explained below.
Failure to comply with the Swiss SECO rule regarding indirect supply.
The structure shown below enables contractors and freelancers to be employed by a Swiss payroll company and supplied to a Swiss (or, under some circumstances, foreign) client. However if an agent is involved that does not possess a SECO Recruitment license, commission cannot be paid to them by the payrolling company. Furthermore, this applies even if the payroll company has a SECO Recruitment License in addition to its SECO Leasing License.
Setup for agency margin payments to foreign agencies prohibited by SECO in Switzerland
Being fully compliant with SECO rules.
To be fully compliant, the commission must be paid to an independent agency with a SECO recruitment license, as shown here.
SECO legally compliant setup for payment of foreign agency margins in Switzerland
The SECO licensed Swiss Recruiter can have a partnership with one or more foreign specialist agencies in order to find suitable personnel, and base this on a commission split. There are Swiss companies who will act as intermediaries for this purpose. Since the imposition of this SECO rule over a decade ago Accurity has always paid all commissions to independent SECO licensed agencies/intermediaries.
If you are an agency in this situation, and would like more details about our fully compliant solutions, please don’t hesitate to contact us.
