In Switzerland, employment relationships are subject to specific protection rules that are governed by both private and public law. The contract with an independent contractor is generally considered an « order » or an « employment contract ». Both categories are based exclusively on private law regulations that do not provide for special protection measures for the independent contractor. Independent contractors do not benefit from this legal protection. However, you can take out a private insurance contract that provides for the continuous payment of salary in case of illness up to 720 or 730 days. You must bear the full cost of this insurance coverage yourself. Under Swiss law, an employee is entitled to certain benefits, but not a dependent entrepreneur. The benefits to which employers are entitled are listed below; • during the exercise of compulsory Swiss conscription, civil protection, women`s service or the Red Cross by the other party and, if this service lasts more than twelve days, during the four weeks preceding and following the service; • during protected sick leave (during which the employee is prevented in whole or in part from performing his work without fault due to illness or accident): 30 days during the first year of service, 90 days from the second year of service to the fifth year of service and 180 days from the sixth year of service; • during pregnancy and during the 16 weeks following birth; and • when co-determining the employee with the employer`s consent with a foreign employer. Other effects of the distinction between employees and independent contractors relate essentially to their scope of protection during the contractual relationship. For example, the safety rules of the Federal Labour Act and the Federal Accident Insurance Act apply only to employees. In addition, employers must comply with the rules on the working time of their employees, which do not apply to independent contractors. In general, the main factor that distinguishes an independent contractor from an employee under Swiss law is subordination. Whether or not a subordinate relationship can be accepted is determined by a holistic assessment of each individual case.
It must be checked whether the person obliged to perform the work is more like an employee or a self-employed person. To this end, certain principles have been developed in teaching and practice, so that a number of factors are taken into account in determining the existence of one or the other contract. The essential characteristics that indicate an employment relationship are: Tax Law Employees and independent contractors must declare their income and pay taxes. Self-employed persons can deduct their professional expenses completely from income, while these deductions are not available to employees. On this page, we give you an overview of the most important aspects of a contract with freelancers in Switzerland, including the elements to consider when creating a contract. However, government agencies and Social Security are increasingly concerned about the risk that employers will try to circumvent workers` legal rights by officially hiring them as freelancers under chain contracts. It is therefore quite a challenge for a company to design an agreement that takes into account the independent status of the freelancer while providing the company with the contractual means to monitor the freelancer. Maintenance of salary payments If the employee is unable to work due to personal circumstances beyond his control, such as illness, accident, legal obligations or public obligations, the employer must pay him his salary for a limited period, including fair compensation for lost benefits in kind, provided that the employment relationship has lasted or lasts more than three months. Subject to the individual determination of longer periods, the employer must pay three weekly wages in the first year of service and then wages for reasonably longer periods depending on the length of the employment relationship and the particular circumstances. The employer has the same obligation in the event of an employee`s pregnancy. A written agreement, a standard employment contract or a collective labour agreement may deviate from the foregoing if it grants the employee at least an equivalent benefit.
Indeed, many companies offer more advantageous benefits through a written agreement, such as insurance. B, which provides for a benefit of at least 80% of the salary up to 720 or 730 days of illness. If employers opt for such an insurance contract, they must bear at least 50% of the insurance premiums. If you do not want to become an independent contractor, but want to hire one, you will learn how to do it in a compliant way in Switzerland. There are significant differences in legal protection in the event of termination of an independent contractor`s contract and an employee`s employment relationship. However, since Swiss labour law is a principle according to which any party can terminate an employment contract without any particular reason, the difference should not be as great as in other jurisdictions. In short, the termination of an employment relationship is always subject to the agreed notice period, unless an employment relationship is terminated for a valid reason with immediate effect. Insofar as an independent contractor relationship is considered a mandate within the meaning of the Swiss Code of Obligations, a notice period does not apply even if it has been agreed between the parties. However, there are some legal restrictions regarding termination at an inopportune time. Therefore, as far as social security is concerned, persons who are self-employed in their work, bear the financial risk of their activity and work in their own name are considered to be self-employed. It is important to ensure that the labour supplier is in possession of a valid licence.
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