Introduction
The legal regime governing employment relationships in Switzerland is generally more liberal and favourable towards the employer than in many other European countries. This is partly because labour unions are somehow less influential in Switzerland compared to, for example, labour unions in European Union countries, but also because the unemployment rate traditionally has been and remains relatively low in Switzerland.
According to the principle of freedom of contract, the parties of an employment agreement are free to agree on the content and terms of their agreement to an extent that is substantially greater than in most other European jurisdictions. Swiss employment law, however, does contain some basic mandatory provisions. Most important, are the mandatory provisions aiming to protect the safety and the health of the employee. Public labour protection regulations cover, among other things, working hours and breaks, special protection for young employees, pregnant women and breastfeeding mothers, work-related injury insurance and industrial accident prevention.
For issues relating to employment law, the provisions of the employment contract should be the first point of reference, taking into account mandatory statutory provisions. If the employment contract is silent on a certain issue, then the non-mandatory statutory provisions apply.
New Developments
Taxation of Cross-Border Commuters (CH-F): As a general rule, the double taxation agreement between Switzerland and France (DTA CH-F) is based on the principle that income is taxed in the country where the work is physically performed. However, for cross-border commuters special rules apply. A temporary solution encouraged by the Covid-19 pandemic has recently been made permanent by the introduction of an additional agreement to the DTA CH-F which entered into force on 24 July 2025 and applies from 1 January 2026. Under the new rules, cross-border commuters residing in France and working for an Employer with its registered office, actual place of management or permanent establishment in Switzerland may now perform up to 40% of their working time per calendar year in their home office in France without losing their cross-border commuter status. As for how the income earned in this way is taxed depends on which Swiss canton the employer is based in.
Withholding Tax: Due to an increase in the median wage, as of January 1, 2026, employers must apply a 6.5% withholding tax rate for pension fund contributions (up from the previous 6%).
Retirement Age: As of January 1, 2025 the retirement age for men will remain at 65, while for women, the previous retirement age of 64 will be gradually increased by three months each year until it reaches 65 in 2028 (for all women born in 1964 or later).
Family Allowances: As of January 1, 2025, the minimum amounts for family allowances in Switzerland increased. The child allowance rose from CHF 200.00 to at least CHF 215 per month and the education allowance from CHF 250 to at least CHF 268 per month. Cantons may provide for higher amounts or additional allowances.
Minimum Salaries: Switzerland does not know federal minimum wages other than those introduced by collective bargaining agreements. Having said this, cantonal or regional minimum wages are becoming more popular. In recent years, Basel City, Jura, Neuchatel, Ticino and Geneva have introduced cantonal minimum wages. In the cantons of Valais and Solothurn, corresponding votes are pending. Voters in the city of Zurich and Winterthur have also voted in favour of a communal minimum wage. However, the introduction of the municipal minimum wages has been delayed as the employers’ associations have appealed against it. As of 2026, several border cantons (Geneva, Neuchatel, and Jura) have raised their minimum wages.
Important New Case Law on Blocking Periods: In its Judgement 1C_595/2023 of March 26, 2024, the Federal Supreme Court (FSC) ruled that in cases where an incapacity to work is limited to the current workplace, the temporary protection provisions regarding dismissal (blocking periods) do not apply. Further information on this topic may be found in our June 2024 Employment Law Tracker.
