Amendment to the Federal Act on Gender Equality as of 1 July 2020: Obligation to Equal Pay Analysis

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The Federal Act on Gender Equality of 24 March 1995 (in force since 1 July 1996; GEA) aims to facilitate the enforcement of the constitutional right of men and women to equal pay for work of equal value. In reality, however, there is still an inexplicable gender pay gap.

In order to eliminate the existing gender pay gap, the Swiss legislator has decided to amend the GEA with a new section containing additional government measures to enforce the right for equal pay for female and male employees. The amendment to the GEA will come into force on 1 July 2020 and will be valid for a period of 12 years (sunset clause), i.e. until 30 June 2032.

Subject of the Amendment: Obligation to Equal Pay Analysis

With the forthcoming amendment of the GEA, employers are obliged to conduct an internal equal pay analysis. Employers must carry out the analysis according to a scientific and legally compliant method. The federal government provides a free standard analysis tool (Logib).

There will be no state inspection or reporting obligation to the state. However, the conducted analysis must be reviewed and verified by an independent body. At the employer’s discretion, such independent body can either be (i) an audit firm approved under the Audit Supervision Act[1], (ii) an organisation pursuant to Article 7 GEA[2] or (iii) an employee representation pursuant to the Swiss Participation Act. The audit firm (i) conducts a formal review of the equal pay analysis and must prepare a report for the employer’s management within one year of the analysis being completed. If the review is alternatively to be carried out by an organisation pursuant to Article 7 GEA (ii) or an employee representation (iii), the employer must conclude an agreement on the procedure for reviewing and reporting.

As long as inexplicable pay gaps between men and women occur, the employer must carry out the above analysis every four years. The first equal pay analysis is due by 30 June 2021 at the latest. No later than one year after completion of review, the employer must inform its employees in writing of the result of the equal pay analysis. Companies listed on a stock exchange are obliged to publish the result of the analysis in the notes to their annual report and accounts.

The amendment to the GEA does not provide for any sanctions or mandatory measures in the event of a breach of the obligation to analyse wage equality or if a gender-specific pay gap is established – the employer is only obliged to carry out the equal pay analysis again after four years.

Who is affected by the Obligation for Equal Pay Analysis?

The above obligation to carry out an equal pay analysis applies to employers who employ 100 or more own employees. This threshold includes all persons with the status of employee (including part-time and fixed-term employees), with the exception of apprentices.

Relevant for the determination of this threshold is the number of employees at the beginning of the year in which an analysis is to be carried out. The analysis must be repeated every four years – unless the number of employees has fallen below 100 or the employer has shown with an earlier analysis that equal pay is achieved.

As the law refers to “employer”, the threshold of 100 employees should – in our understanding – be determined based on the relevant legal entity (to which the employment relationship exists) and not on the individual operational business or the group company.

Certain employers who are already subject to controls on compliance with equal pay as part of public procurement or subsidy schemes are excluded from the obligation for equal pay analysis.

[1] Lead auditors, who are mandated by employers to review equal pay analysis, must complete a special training course.

[2] This includes organisations that in accordance with their statutes promote equality between women and men or protect the interests of employees and that have been in existence for at least two years.

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