What is Swiss Labour-Leasing Law all about?

The State Secretariat for Economic Affairs (SECO) regulates the Swiss market to protect workers and the Swiss employment market. It specifically prevents Swiss employers recruiting staff through foreign management companies and foreign recruitment companies. Art 1 RS 823.11 Loi federale sur le service de l’emploi et la location de services (LSE)

What is required to undertake labour-leasing legally in Switzerland?

  • Federal and cantonal authorisations are both required to undertake labour-leasing in Switzerland from abroad. Art 12 LSE
  • The management company is required to register at the Swiss Commercial Register as a labour-leasing company (services de location). Art 3.1.a LSE
  • The management company must provide a financial surety of a minimum of CHF 100,000 for a cantonal and federal licence. Art 14 LSE
  • The management company must have offices based in Switzerland. Art 3.1.b LSE
  • The management team must have a fit and proper person who substantially devotes his or her time to labour-leasing matters. Art 3.2 and 3.3 LSE

What is permitted by the law?

  • A Swiss client may only hire labour from a Swiss management company that is authorised to carry out labour-leasing. Art 12.2 LSE
  • It is permitted for staff to be contracted between companies that are members of a group of companies. Art 2.5 LSE
  • If a labour-leasing company opens a branch in another canton, the new branch shall have the authorisation as well. Art 2.5 LSE
  • A foreign management company can operate in Switzerland if it has an office in Switzerland and registers itself as a management company with the Swiss authorities.

What is forbidden by the law?

  • Direct contracting from outside Switzerland is not permissible. Only a Swiss management company can do this. Art 12 al.2 LSE
  • A foreign management company supplying contractors from abroad is not permitted to supply labour-leased staff in Switzerland.
  • A foreign company working in Switzerland is not authorised to employ contractors through a management company which is based abroad.
  • A foreign recruitment company cannot supply staff to a Swiss client nor bill the Swiss client.
  • A Swiss management company cannot contract directly with a foreign recruitment company.
  • A foreign recruitment company cannot take on staff permanently or temporarily to labour-lease to a Swiss client. Art 12 al. 2 LSE + Art. 21 LSE


  • There is a penalty of CHF 100,000 for any business wilfully operating without a labour-leasing licence. Art 39. LSE
  • A Swiss company illegally engaging labour-leased staff is at risk of being fined CHF 40,000. Art 39.2 LSE
  • An employer faces fines of up to CHF 5,000 for each illegal employee. For serious infractions, they may be banned from working in Switzerland for one to five years. Art. 9 al. 2 A Loi sur les travailleurs détachés + Art. 9 al.2 B.
  • It is possible the company may be refused work permits for its contractors in the future.
  • Those that organise or help illegal workers enter Switzerland can face possible imprisonment and be fined up to CHF 100,000. Art 39.1.b LSE + Art.117 . 1 and Art 122 LETR
  • Employees without permits have no entitlement to federal or company pensions, unemployment pay, health or accident insurance and no job protection. Art 115 LETR (law of Foreigners)
  • Illegal contracts are null and void. Art 19 Al.6 LSE and Art 22 Al. 5 and Art 20 Swiss Code of Obligations

In what circumstances can consultants use their own Personal Services Companies when working in Switzerland?

  • Self-employed individuals who are EU or EFTA nationals using their own foreign limited companies cannot hire their services to a Swiss-based company for more than three months. After this period the individual must be employed by a Swiss management company.
  • Persons from a country other than the EU who have been working with official permission in an EU or EFTA member state for at least 12 months can be sent by a company based in one of these states to carry out work for services in Switzerland for up to 90 days in a calendar year.
  • The bi-lateral agreements with the EU allow for the free movement of persons but not the free movement of Companies.
  • After 3 months the individual must be employed by a labour-leasing company and a suitable work permit obtained. LETR RS 142 20 + OASA RS 142.201 (Ordonnance relative à l’admission, au séjour et à l’exercice d’une activité lucrative)

Practical Matters

  • What are the limitations of allowing the use of Personal Services Companies (Limited companies)?
    After three months, it is often difficult to encourage the individual using his own limited company to change his status.
  • What can be done if the client is not interested in allowing themselves to be billed by an authorised labour-leasing company?
    This is illegal and the only legal route is for the client to employ the individual directly.
  • What if the end-client is not based in Switzerland?
    If the client is not based in Switzerland it is permitted for an authorised management company to bill that client outside Switzerland.
  • What if the apparent end-client has a labour-leasing licence but does not wish to run a payroll?
    This is permissible only where there is no sub-leasing carried out, that is, the individual is not under the control of the client. It should be noted that it may be difficult to prove that there is no sub-leasing and the Service de l’Emploi will request explanation. SECO insists that the management company must contract with the final client where the contractor is working.
  • What about Swiss agencies/consultancies?
    Swiss agencies and consultancies are subject to the same law and must hold the appropriate authorisations to place or labour-lease staff.

What to do if in doubt?

Contact SECO at:

Tel : +41 (0)31 322 56 56
Fax : +41 (0)31 322 27 49
Address: Staatssekretariat für Wirtschaft, SECO Effingerstrasse 31, CH-3003 Bern

If you have any questions and would like to speak with the Access Financial team, please do email us enquiries@www.accessfinancial.com

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