What Are the Major Changes to Employment Law in 2020?

1. Adjustment of the OASI contribution rate for employers and employees

On 19 May 2019, the Swiss electorate voted in a referendum on the tax reform and the funding of the old-age, survivors’ and invalidity insurance (OASI) and approved the Federal Act on Tax Reform and OASI Funding. The Act came into force on 1 January 2020.

As a consequence of the approval of the Federal Act on Tax Reform and OASI Funding by the Swiss electorate, the OASI contribution rate was raised by 0.3 percentage points with effect from 1 January 2020. Therefore, since 1 January 2020 the OASI contribution rate is for both the employer as well as the employee no longer 4.2% but 4.35% each.

2. Changes to the requirement to register job vacancies

Since 1 July 2018 there is a requirement to register vacancies in occupations which applies throughout Switzerland. The aim of the requirement to register vacancies is to promote the placement of job seekers who are registered in Switzerland with the public employment service or the competent regional employment centres (RAV), respectively.

Since 1 July 2018 employers have been legally required to register vacancies in occupations where the national unemployment rate is at least 8% or more with the regional employment centre (RAV). With effect from 1 January 2020, the relevant threshold has been lowered from 8% to 5%.

Therefore, from 1 January 2020 onwards all vacancies in occupations where the national unemployment rate is at least 5% or more need to be registered. The portal arbeit.swiss provides an up-to-date list of all the occupations where the national unemployment rate is at least 5% or more and as a result vacancies in these occupations must be registered since 1 January 2020 (see also our blog post “Einführung der Stellenmeldepflicht ab 1. Juli 2018 – Was Sie als Arbeitgeber in Zukunft zu beachten haben“).

3. Revision of the Swiss statute of limitations

On 1 January 2020, the revised statute of limitations entered into force. The revision of the statute of limitations under the Swiss Code of Obligations had, among other things, the following consequences: (i) the extension of certain limitation periods, (ii) the adjustment and extension of the catalogue of reasons for which the limitation period does not begin or is suspended and (iii) the enshrinement in law and clarification of the case law of the Federal Supreme Court to waive the assertion of the statute of limitations.

The revision of the statute of limitations, which was significantly influenced by the court rulings in the asbestos cases, has the following consequences for employment law:

a) Limitation periods for tort claims

Under the previous law, the right to claim damages or satisfaction resulting from tortious liability became statute-barred within one year from the day on which the person suffering damage became aware of the damage and of the identity of the person liable for it. Now, this limitation period (so called relative limitation period) is three years.

In the case of death of a person or physical injury (so called personal injuries), the relative limitation period is now also three years. In addition, the absolute limitation period (period which begins to run on the day of the action causing the damage or if the action is permanent on the day the action ends), has been extended by the revision from 10 to 20 years.

b) Limitation periods for contracts

In addition to the limitation periods for claims under civil law, the Code of Obligations now stipulates limitation periods for contractual claims for damages or satisfaction arising from physical injury or death of a person due to breach of contract. As a result, such claims become statute-barred within three years from the day on which the person suffering damage became aware of the damage (relative limitation period) and in any event within 20 years from the day of the action causing the damage or the day the action ends (absolute limitation period).

c) Waiver of the statute of limitations defense

The possibility to waive the assertion of the statute of limitations was revised comprehensively in the course of the revision of the statute of limitations. On the one hand, the case law of the Federal Supreme Court regarding the possibility to waive the statute of limitation defense has been enshrined in law and, on the other hand, it has been clarified – in contrast to the case law of the Federal Supreme Court – from when on such waiver is possible.

Whereas a waiver of the statute of limitations defense was already possible after entering into a contract according to case law of the Federal Supreme Court, since 1 January 2020 onwards a waiver is only possible from the moment the limitation period has begun to run. Accordingly, the limitation period for a claim must have started to run already. This may cause difficulties in practice as it is not always clear when the limitation period of a claim has started to run.

Whereas no form was previously required for the waiver, the revised law now stipulates that the waiver must be in writing. This refers to the simple written form. Accordingly, the obligating debtor must sign the waiver. An email without an authenticated electronic signature or other written documents without a signature are therefore no longer sufficient.

You can read more about the new statute of limitations in our blog post “Das neue Verjährungsrecht ab dem 1. Januar 2020″.

4. Introduction of the wage equality analysis

The Federal Constitution of the Swiss Confederation stipulates since 1981 in art. 8 para. 3 that men and women have the right to equal pay for work of equal value. Equal pay is therefore constitutionally guaranteed. However, reality shows that equal pay has not yet been implemented everywhere. Considerable differences still exist.

On 1 July 2020, the revised Gender Equality Act and the Ordinance on the Review of Wage Equality Analysis will enter into force. By way of governmental action – the wage equality analysis – equal pay between men and women shall now be achieved. The revised Gender Equality Act obliges employers with 100 or more employees to carry out a wage equality analysis every four years and to have it reviewed by an independent body.

4.1. How should the wage equality analysis be carried out?

For the duty to carry out a wage equality analysis the revised Gender Equality Act sets out the following procedure:

a) Duty to carry out a wage equality analysis

i) Concerned employers and timing

Each employer who has 100 or more employees at the beginning of a year is obliged to carry out an internal wage equality analysis for that year. According to the Ordinance on the Review of Wage Equality Analysis the first wage equality analysis has to be carried out by the concerned employers by 30 June 2021 the latest.

Therefore, the relevant date for determining whether an employer has at least 100 employees is on 1 January of the year in which the wage equality analysis is to be carried out. For the first wage equality analysis the relevant date for the 100 employees depends according to the Federal Office of Justice on which year the employer intends to carry out the analysis in. If an employer intends to carry out the analysis in 2020, the employer has a duty to do so if he had at least 100 employees on 1 January 2020. If the wage equality analysis shall be carried out in the year 2021, the employer has a duty to do so if he has at least 100 employees on 1 January 2021.

The wage equality analysis is to be repeated every four years, unless the number of employees falls below 100 during this time period. In this case, a wage equality analysis only needs to be carried out again if the employer reaches 100 or more employees again.

The Gender Equality Act exempts certain employers from the obligation to carry out a wage equality analysis. These are, inter alia, employers who are already subject to control for compliance with wage equality in relation to public procurement or the granting of subsidies. For example, public procurement requires that companies participating in procurement procedures respect equal pay for men and women. Therefore, there is a requirement in public procurement law to implement the principle on equal pay as provided for in the Federal Constitution. An exemption from the duty to carry out a wage equality analysis further applies to employers whose internal wage equality analysis demonstrated that the requirements for wage equality are met.

ii) Method of the wage equality analysis

The Act stipulates that the wage equality analysis has to be carried out using a scientific and legally compliant method, whereby the Swiss federal government will provide a free standard analysis tool and a free instrument.

The free instrument, which will be provided by the Swiss federal government, is the self-test tool Logib. With this instrument employers can check whether equal wage between men and women is achieved.

4.2. Review of the wage equality analysis

All employers who are subject to the Swiss Code of Obligations are obligated to have their internal wage equality analysis reviewed by an independent body. According to the revised Gender Equality Act employers can choose to have the review carried out by either an audit company approved by the Audit Supervision Act, an organisation according to art. 7 of the Gender Equality Act (organisations who according to their statutes promote the equality of men and women or who safeguard the interests of employees and have existed for at least two years) or by the employee representation in accordance with the Workers’ Participation Act.

4.3. Information about the results of the wage equality analysis

The employers are further obligated to inform their employees in writing about the results of the wage equality analysis within one year of completion by the latest.

If the employer is a listed entity, then the employer is further obligated to publish the results of the wage equality analysis in the notes of the annual accounts.

b) What are the sanctions for violating the wage equality analysis provisions?

The revised Gender Equality Act does not provide for any sanctions if the employer violates its duties in connection with the wage equality analysis. The Act does also not provide for any consequences in the event that the results of the analysis identify wage discrimination and in the event the employer does not take any action against such discrimination.

However, due to the information duties in the revised Gender Equality Act, it can be assumed that an identified wage discrimination against which no actions are being taken, will not only be known internally but also become public outside the company. This would certainly not be in the interest of the concerned employer. To counteract such reputational risk, the concerned employers should be motivated, on the one hand, to fulfill their obligations in connection with the conduction of the wage equality analysis and, on the other hand, to eliminate any prevailing wage discrimination which may have been identified.

In this context it should further be noted, that the Gender Equality Act provides for a relief of the burden of proof in the case of wage discrimination in favour of the concerned person. This means that the existence of a wage discrimination in a judicial proceeding is presumed if the person concerned (claimant) can make a discrimination credible. Where a wage equality analysis identified a wage discrimination, the concerned employees are likely to be more motivated to take legal action against their employer and to file a claim for wage discrimination.

c) Outlook – Evaluation of effectiveness

It remains to be seen whether the introduction of the wage equality analysis will be a suitable instrument to achieve wage equality between men and women.

Under the revised Gender Equality Act, the Federal Council has a duty to review the effectiveness of the obligation to carry out a wage equality analysis and to submit a report to Parliament no later than nine years after the provisions relating to the wage equality analysis have entered into force. This report will indicate whether the objective of eliminating wage discrimination has been achieved or whether it has at least been reduced significantly.

Any questions? Our team would be happy to help!