Remote working – Switzerland

The term “Digital Nomad” is often used to describe a remote worker that travels to different locations to work, sometimes based out of a coffee shop or a co-working space. A number of these co-working spaces now even offer communal living to encourage work collaboration.

But whether remote worker, digital nomad or location-independent professional – there are still some contentious and perhaps even “old-fashioned” issues to consider when working remotely – no matter where that is. Not surprisingly, these include: the law of the land.

In this post, we look at several remote work scenarios for Switzerland and consider some of the implications for both the worker as well as the client company engaging them.

The Swiss Federal Statistical Office or FSO recently reported that between the end of 2014 and 2019, the number of foreign nationals in the Swiss labour market grew by more than 9 percent, to reach a total of 1.7 million people. This now represents roughly 20 percent of Switzerland’s 8.5 million population.

And while a number of these foreign workers may be classified as digital nomads – temporarily based at one of the scenic locations the country has to offer – more likely than not, most are skilled professionals, engaged in project work for a company for a specific time period. This type of skilled “remote” work is not to be confused with that of the digital nomad.

Remote working scenarios – Switzerland

1. What are the main possibilities?

• A foreign or Swiss national engaged in work for a Swiss based company.
  • Assuming the worker has a valid permit to live and work in Switzerland, under the work status “EOR” or Employer of Record, the worker can also work remotely if agreed with the client company.

• A foreign or Swiss national engaged in work for a foreign based company.
  • Assuming the worker has a valid permit to live in and work in/from Switzerland – the worker can work remotely for a foreign company under:
    • EOR or Employer of Record Status
    • ANobAG Status

2. Why would workers living in Switzerland want to work remotely for a Foreign based company?

• A Spouse or Partner has a job offer in Switzerland and the worker wishes to accompany them and continue working for their current (foreign based employer).
• A worker who has already been employed by a company in Switzerland, now wishes to engage in work for a foreign based company, but wishes to continue living in Switzerland.
• A foreign based company is looking to engage specific staff in Switzerland as their employee or as a contractor, without having to establish a Swiss branch office to do so.

3. What are the differences for both the Worker, and the Client Company with EOR and ANobAG work status’?

• Employer of Record (“EOR”)
  • Employer of Record is typically implemented when the client company is based in Switzerland, however it can be equally effective and legal, if the client company is a foreign company based outside of Switzerland. This would be classified as working remotely.
  • This is where the worker (or their agent) negotiates conditions for engaging the worker with the client company (time and daily/hourly/weekly rates).
  • Once this is agreed, the worker signs an employment contract with a Swiss employment services company – such as Accurity – which in turn signs a supplier agreement with the client company.
  • The worker is then leased to the client company (for example by Accurity) in a process referred to as “labour leasing” and under a work status called “Employer of Record” or “EOR” for short.
  • The worker is employed for a temporary period of time, as agreed by the employment services company and commits to completing the work under the agreed terms and rates for the client company.
  • The worker has a Swiss work contract and pays into the Swiss social security system, although they work exclusively for the client company – which can be based in, or outside of Switzerland.

• ANobAG
  • This is where the worker is directly employed by the foreign based company.
  • The worker has to pay all the Swiss social security contributions themselves (including the employer part).
  • In order to work under ANobAG status, the worker has to register at their local Gemeinde or Commune where they live, presenting a valid work contract. The local authorities own the approval process and considerations such as sufficient funds will also be taken into account before a work permit is granted (foreign workers).
  • Assuming approval is granted, the worker has to set up the payment of all statutory insurances and social payments including (usually) a pension plan.
  • The worker is solely responsible for making the monthly payment to the various social security authorities – although this is also a service offered by qualified SECO-licensed employment services companies such as Accurity.

4. For both the client and the worker, there are certain points to consider with both work scenarios

• For the Worker
  
  • The worker must have a work permit that is correct and valid for the current situation.
  • The worker must ensure that they register at their local Gemeinde or Commune where they live – and confirm to the client company in writing that all their documentation is correct and they have proof of sufficient funds.
  • The worker should consider to engage a SECO-licensed employment services company for both EOR and ANobAG models. This can be to act as the local employer (EOR) or as a service provider (ANobAG).
  • The worker should keep a tab on all social payments and taxes especially end of year payments.

• For the Foreign-based Client Company
  • The company should understand both the EOR and ANobAG models – advantages and possible implications – with the goal of engaging the worker in the right one both for the worker and the company.
  • The company should discuss and agree payment terms to potentially include the employer social payments for either the EOR or ANobAG scenario.
  • There are advantages with both models such as: flexibility, agility and cost savings – and the need to open a Swiss branch office is negated in both cases.
  • There may also be some disadvantages for the company but this greatly depends on the relationship between worker and company.
    • One example of this could be in the ANobAG model,  where a disagreement between worker and company could result in legal action. The court of jurisdiction according to international law is the place where the worker is based – which would be Switzerland in this case.
    • In the case of EOR, where the worker has in effect a Swiss employment contract and employer, this reduces risk for the client company – who is the labour leaser and not the employer.

Summary:
Providing  all the Federal and Cantonal requirements are met, workers with a valid permit to live in Switzerland can work remotely while living in Switzerland – either for a Swiss based company (as agreed) or for a foreign based company. In both cases, workers will pay into the Swiss social security system.

As Switzerland’s most trusted payroll provider, Accurity GmbH has over 20 years’ experience providing company clients and workers from all industry sectors with the best advice about their payroll, pensions and social security, thereby ensuring they make the right decisions. Focusing on core competencies is key and our expertise in all things payroll can help our clients achieve that.

If you would like to speak with one of our team of experts, simply contact us now to see how we can make Switzerland easy for you!