Agreement with the EU Federal Council adopts 14 measures to protect Swiss wages

On Friday, the Federal Council decided on 14 domestic policy measures in the area of wage protection. These are intended to protect Swiss wages in the event that the negotiated agreements with the EU come into force. The most important questions and answers.

Keystone-SDA

21.03.2025, 20:14

SDA

The trade unions in particular fear that the possible expansion of the bilateral agreements with the EU will put increased pressure on Swiss wages. To counteract this, the social partners and the cantons, under the leadership of the State Secretariat for Economic Affairs (SECO), have been holding talks since December 2022 on measures to safeguard the level of wage protection in Switzerland.

The talks were held with the umbrella organizations of the social partners. On the employers' side, these are the Swiss Employers' Association (SAV) and the Swiss Confederation of Skilled Crafts (SGV), and on the employees' side, the Swiss Federation of Trade Unions (SGB) and Travail Suisse. The cantons were represented by the Conference of Cantonal Governments (KDK) and the Conference of Cantonal Directors of Economic Affairs (VDK).

In February, the social partners and the cantons reached a "common understanding" on measures to protect wages. The Federal Council subsequently proposed 13 measures based on this. It has now adopted this package - and added a further measure.

The Federal Council divided the joint agreement measures into three categories: Measures to compensate for concessions; measures to safeguard the services freeze; and measures to protect the Swiss level of expenses.

During the negotiations, Switzerland agreed to reduce the pre-notification period for cross-border service providers from eight calendar days to four working days. Furthermore, a deposit can only be requested if an infringement was detected during the last assignment. A total of eight measures are planned in this area, writes the Federal Council. They are intended to ensure that reports from service providers in the EU reach the supervisory authorities more quickly, to facilitate checks on compliance with wage and working conditions and to strengthen prevention to prevent abuse.

The Federal Council decided on two measures to achieve this: retaining the existing regulation on the services ban in the Posted Workers Act and participating in the EU's Internal Market Information System. In general, the Federal Council states that the barriers are an important element in the enforcement of the Posted Workers Act. It was applied over 600 times in 2023. There are fears that this element could come under pressure from the EU.

Switzerland was not granted an exemption from the EU's expenses regulations during the negotiations. This means that the principle of "equal pay for equal work in the same place" only applies to wages, but not to expenses. As a measure against this, Swiss expenses are to be guaranteed under Swiss law. Specifically, the following should be added to the Posted Workers Act: "If the rules in the country of origin do not cover the actual costs of the stay, then this must be compensated according to the actual costs in Switzerland," said Seco Director Helene Budliger Artieda on Friday in Bern.

The Federal Council is pursuing the goal of safeguarding social partnership structures in wage protection with two measures, as it writes. To this end, the collective employment agreements that have already been declared generally binding are to be secured and improved legal protection is to be created for domestic companies that are to be subject to a generally binding CEA.

It is proposing improved protection against dismissal for elected employee representatives, for members of an employee pension fund body and for members of national sector boards who work within the framework of a collective employment agreement that has been declared generally binding. With this measure, the Federal Council is also responding to a complaint pending at the International Labor Organization (ILO/IAO), said Economics Minister Guy Parmelin in Bern. Specifically, Switzerland is accused of violating human rights in the protection against dismissal of union-active employees.

The SGB welcomed the Federal Council's approval of the social partner compromise. Without this, companies would be able to charge Swiss prices and pay foreign wages. The trade union federation sees the EU agreement as making Switzerland a target country for "dubious and semi-criminal" companies. The SGB intends to make a final assessment of the agreement once it has been discussed by the Swiss parliament. Travail Suisse called the measures an "acceptable compromise". The current level of wage protection can thus be secured.

The SAV and also the SGV expressed reservations about the additional point proposed by the Federal Council. This would create both inequality and a basis for extending protection against dismissal to a larger group of people, wrote the SGV. Employer representatives were generally in favor of the remaining 13 measures. The SAV described the social partnership solution as a "win-win situation for employees and employers alike".

Federal Councillor Guy Parmelin was cautiously optimistic. The aim is to have all key players on board by the end of the consultation process in the fall. "It's a fragile compromise." The future will show how sustainable it is.

The agreed measures will be incorporated into the consultation draft for the Switzerland-EU package. This is expected before the summer break in 2025. The dispatch to Parliament is expected to be adopted in the first quarter of 2026. Prior to this, the agreement on Switzerland's participation in the EU programs is to be initialled in Brussels in April 2025, the Federal Council wrote last month regarding the timetable. In diplomacy, initialling means the provisional signing of a treaty. The remaining agreements are to be initialed in May. The timetable envisages the Federal Council and the EU Commission signing the treaties in the first quarter of 2026.

According to the Federal Council, it has been agreed with the EU that the outcome of the negotiations on wage protection and the adoption of EU posting rights will be implemented three years after the amended Agreement on the Free Movement of Persons comes into force. Updating the agreement requires the approval of the Federal Council, the Federal Assembly and, if necessary, the Swiss electorate. Legislators on the EU side must also approve the agreement.