Nick’s Swiss Watch: Labour Leasing

In this instalment of Nick’s Swiss Watch, I will be answering your questions on a subject which is often thought of as overly complex: Swiss labour leasing.

While labour leasing is a critical aspect of placing candidates with Swiss clients it is largely misunderstood. Here you will find the answers to the questions that I am frequently asked by recruiters on labour leasing. If you are looking for specific information on tax and social security, please take a look at my last article.

What is labour leasing? What is required to undertake labour leasing legally?

Non-Swiss recruitment agencies cannot legally recruit for a Swiss client without holding a labour leasing license. This is regardless of the worker’s nationality, and there are two types of labour leasing licenses: one is cantonal, for use in specific Swiss cantons, and the other is federal, for use across the whole of Switzerland. Agencies must have the correct license in order to place a candidate with their Swiss client compliantly.

Who are SECO and how are they involved in labour leasing?

SECO, the State Secretariat for Economic Affairs, is the Swiss authority that determines Swiss and labour leasing regulations, terms and conditions.

What are the penalties for non-compliance for recruitment consultancies?

For matters of non-compliance, depending on the type and frequency of offences, a recruiter will typically receive a warning letter or email. As such, a recruiter will not receive a penalty unless it has received multiple warnings. However, the end-client would be penalised for engaging with and accepting invoices and payment from someone who is not correctly licensed. Agencies operating without a license are putting their clients in an extremely vulnerable position, therefore clients must check that the recruiters they engage with are operating compliantly. 

What happens if a Swiss client allows themselves to be billed by a non-authorised labour leasing company?

Clients are left vulnerable to multiple repercussions if they allow themselves to be billed by a non-authorised labour leasing company. Typically, the client will receive a warning and a fine.

If the worker is in Switzerland but the end client is in Germany can the rules be circumvented?

Legally, no. Swiss labour leasing rules apply the moment that a worker arrives in Switzerland. Anyone working in Switzerland, regardless of the location of the client, must do so under Swiss law.

What’s the cost to obtain a labour leasing licence?

There are several steps to follow before obtaining a labour leasing license, which will incur other costs in addition to the license itself. Due to the varying hurdles, set-up costs, deposits and bonds required by law, we typically suggest that you should only consider looking into securing a labour leasing licence if you run 25 or more contractors.

I hope that you have found the answers provided here to be useful, and that labour leasing now doesn’t seem as complex as you may have initially thought. If you would like any more information on labour leasing, please leave a comment below.

If you have a specific query regarding working or placing candidates in Switzerland, please send me your questions to answer in the next instalment of Nick’s Swiss Watch.