Engaging skilled workers for temporary projects is nothing new in Switzerland. In fact, some of the first modern day migrants to Switzerland were Italian labourers in the late 19th century. They came to work on major construction projects such as the Gotthard railway or the Simplon Tunnel.
In 1900 there were around 3.3million people living in Switzerland. Today nearly 9 million people call Switzerland home. That leads to questions such as: What percentage are foreign workers? And how are they engaged to work?
Permits
According to the Federal Statistical Office in Q2/23, 1.774 million persons of foreign nationality worked in Switzerland. Nearly 80% of these workers are originally from an EU/EFTA state or the UK and 21% from a third-party state. The types of permits issues in Switzerland vary according to various criteria and include:
- In the latest statistics record, the majority of employed foreign nationals (44.3%) held a C Permit
- These were followed by holders of a temporary residence permit
- 8% with a permit B or L – in Switzerland for 12 or more months
- 9% cross-border commuters (permit G)
- 1% were holders of a short-term residence permit (permit L) and in Switzerland for under 12 months
Engaging Staff in Switzerland
International and Swiss based companies should fully understand the law and legal requirements before engaging workers for special projects or temporary assignments. Non-compliance can result in heft fines.
Thanks to the EU / Free Movement of Persons (FMOP), generally-speaking, there are no issues to engage EU and EFTA nationals. The situation is very different however, with so called “third country nationals”, where a visa is required and the engagement on boarding process can take much longer.
For temporary assignments, the main engagement construct used is the Employer of Record or EOR. To be able to operate as a specialist provider of employment services in Switzerland and act as the EOR for a temporary worker, the provider must have a registered office in Switzerland and be licensed for labour leasing by SECO, the State Secretariat for Economic Affairs. International PEO’s offering global payroll also have to abide by these rules.
The EOR Process
The employer of record process operates as follows:
- The (client) company looks to engage skilled specialists for a project or assignment. The usual process is to work with an approved and licensed recruitment agency for the search, although the company can recruit directly if so desired.
- Once the worker(s) are identified and terms agreed with the client company, the worker (contractor) is either recommended to an EOR partner, or they find one themselves.
- In Switzerland a licensed employment services provider offering EOR services enables the client company to engage full-time workers. These are then given a Swiss employment contract that complies with Swiss payroll, contracts, and benefits laws.
- An EOR will also typically include services such as calculating and paying statutory social fund payments, insurances as well as offering a selection of private pension plans. They will also withhold taxes, complete on-boarding and manage payroll and offer ongoing support.
EOR – Key questions to ask
Whether the client company is based outside of Switzerland and decides to work via an international PEO or is based in country, the local EOR will almost certainly be the local services fulfilment partner. So what are the key points to look out for with an EOR when engaging workers for Switzerland?
- Does the EOR own its own entity in Switzerland?
- To hold a SECO license, the provider of EOR services should have a registered branch in Switzerland. If not, are they are partnering with a local or third-party provider? Who are these?
- Which organisation is the contract holder for the worker?
- Does the EOR offer personal solutions?
- Some EOR providers claim to offer “100% digital” services. Given the need to communicate verbally with many individuals and organisations during the on-boarding process, for example when negotiating pension plans for workers as well as other common HR tasks, it is very unlikely that a service can be 100% digital.
- What support model does the EOR offer? It’s essential that an EOR offers ongoing support as part of its service offer. But buyer beware, many employment services organisations will charge additional fees for ongoing support. It pays to check!
Frequently asked questions – EOR Switzerland
What are the costs involved in working with an EOR?
The first consideration of the client company or agent is to check what services exactly are included in the EOR offer. Some EOR’s will require a deposit or payment in advance. Some offer support and other “extras” for an additional fee, (not included in the original offer). It pays therefore to clarify from the outset:
a) what services are exactly included
b) what extras are not included
c) what these cost
The fees are then typically charged as either a fixed monthly fee or as a percentage of the client billing rate (both with our without “extras”).
Some examples of additional costs could be: on/off boarding, permit administration, on-going support, salary payment in advance, additional HR / PEO services.
What is the difference between an EOR and PEO?
A professional employer organisation or PEO offers an array of additional HR services in addition to being the EOR. This can include administrative services, setting up HR support functions for the company and the PEO thereby takes on more HR responsibility for the workers than an EOR.
Summary
Switzerland has a long history of engaging skilled specialist workers for temporary projects and special assignments and the population of Switzerland is consists of a significant number of foreign nationals.
Today more than ever, Switzerland has a need for skilled specialists. The ICT, Pharmaceutical and finance sectors are just 3 areas where there is an acute shortage of skilled workers.
In addition to the companies already based in Switzerland, international SME’s start-ups and others without a presence in Switzerland are also looking to engage skilled workers in Switzerland. Partnering with a trusted local employment services partner offering both EOR and PEO services saves time & effort, and legal compliance and business risk aversion are also key advantage points to note when working with a licensed EOR partner.
Accurity is SECO licensed with a 20+ year enviable reputation as a trustworthy, reliable and transparent partner for companies of all sizes including SMEs, contractors and recruitment agents. Our core services include Employer of Record or EOR for contractors and international and domestic clients wishing to engage contractors. We also supporter our contractors and clients with advice on state and private pensions and on housing and other cost of living services such as insurances. Our pricing system is fair and transparent. We are based in Switzerland and have excellent local knowledge and connections. Contact our team to see how we can help you.
