4 September 2023
Employment Tax
Impact: Medium
Summary
The bulletin provides an update about the changes which have been implemented or agreed on during the summertime.
The Detail
Geneva parental leave
In June Geneva had a vote on parental leave which was accepted by the majority of voters. This has an impact on the benefits new parents receive from the government in Geneva but also on the Geneva social security contributions, as this additional parental leave will be financed by the contributions made by the employer and employee to the Geneva’s maternity insurance scheme. The total contribution may raise by 0.15% – 0.2%. The new rules are also applicable for parents with same sex, adoptive parents or permanent foster care parents. While the additional contributions are mandatory the granting of the additional benefit is voluntary.
| New | Old | |||||
| Benefit mother resp. person who benefits from the maternity insurance | 16 weeks + 0-2 weeks* | 16 weeks | ||||
| Benefit father resp. person who does not benefit from the maternity insurance | 2 weeks + 6-8 weeks* | 2 weeks | ||||
*The additional parental leave will be 8 weeks in total whereas at least 6 out of 8 weeks are compulsory allocated to the father resp. the person who does not benefit from the maternity insurance. The remaining two weeks can be allocated between the parents based on their agreement.
As a reminder, any employer who has employees working in the canton of Geneva may be impacted by this change. Be prepared for the necessary changes which need to be implemented into your payroll program. The exact date enforcement is not yet announced.
Minimum wages
The two biggest cities in the canton of Zurich (Zurich and Winterthur) had separate votes on minimum wages for work performed in their ground. The majority of the people of these cities have voted YES. Consequently, employers must carefully assess their wage structure.
| Zurich | Winterthur | |||||
| Minimum wage per hour | CHF 23.90 Any mandatory add-on for public holidays or vacation is on top. | CHF 23.00 Any mandatory add-on for public holidays or vacation is on top. | ||||
| For whom is it applicable? | Anyone who is mainly conducting work in Zurich-City. It is also applicable for people covered by GAV or normal work contracts. | Anyone conducting work on the ground of the city of Winterthur. Not the employer’s legal residency is applicable but where the work is performed. | ||||
| Exceptions | Individuals in education and individuals below the age of 25 years without completed business certificate (e.g., completed apprentice). Interns (educational purpose), apprentice and family members who work in their own family business. | Interns, apprentices, individuals below the age of 18 with a holiday job and family members who work in their own family business. | ||||
| Legal actions | The legal actions are in both places alike. The city can levy penalties to employers who are not compliant with the minimum wage requirements. Once the new law comes into force, there will be an expected one-year transition period (or even two years in Zurich-City). The minimum wage per hour is subject to annual adjustment depending on inflation and wage developments. | |||||
Moreover, we like to provide you with some background information for Switzerland on minimum wages. Such initiative was declined on a federal level in 2014 by the Swiss residents as the majority voted NO for a Swiss wide minimum wage requirement. Nonetheless, several cantons have implemented minimum wages in the meantime. Please see the table below.
| Canton | Minimum wage per hour (01.01.2023) | |||||
| Basel-City | CHF 21.45 | |||||
| Geneva | CHF 24.00 | |||||
| Jura | CHF 20.60 | |||||
| Neuchatel | CHF 20.77 | |||||
| Ticino | CHF 19.00 – 19.50 | |||||
Summary of Bulletin and other Tax Blogs published during the summertime
Executive employee Art. 15 (4) Switzerland / Germany DTT
There has been an adjustment of Article 15(4) of the Consultation Agreement of August 11, 1971 between the Federal Republic of Germany and the Swiss Confederation for the Avoidance of Double Taxation on Income and on Capital (DTT CH-D).
Bulletin July 11, 2023
French cross border
Switzerland and France have signed a supplemental agreement containing rules for taxation of income from home office activity for cross-border commuters (applicable in principle until 31st December 2024). In July, the tax authorities published further clarifications in particular on the details of the 40% incl. 10 business trip calculation and the impact of exceeding days.
Flyer August 11, 2023
Teleworking agreement
As of 1 July 2023 the Framework Agreement for Telework has entered into force. This agreement entails that Member States agree to deviate from the main rules as included in the EU-Regulation for social security if a situation meets certain criteria. Under the Framework Agreement for Teleworkers, a cross-border teleworker can continue coverage in the employer country when combining working in the employer country with less than 50% teleworking from their residency country.
Cross-border telework is defined as an activity that can be pursued from any location, carried out in a Member State other than the one in which the employer is vested and is based on information technology to remain connected to the employer’s or business environment. In practice this means that an employee can work in their home country from different locations (and not only from home) as long as they work via ‘information technology’ for their employer who is vested in another Member State.
The Framework Agreement for Telework will not be applied by all EU/EEA countries.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
Natalia Graf
Director
Franziska Tschirky
Senior Manager
Further information on Vialto Partners can be found here: www.vialtopartners.com
Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
© 2023 Vialto Partners. All Rights Reserved.