Private employment and temporary recruitment are governed by the Federal Law on Employment and Labor Leasing (Loi fédérale sur le service de l’emploi et la location de services, LSE). A company must have a license to carry out these activities.
More than 6,000 companies in Switzerland are active in private employment and temporary recruitment. These activities are regulated by the Confederation through three legal acts:
- The Federal Law on Employment and Labor Leasing (Loi fédérale sur le service de l’emploi et la location de services, LSE),
- The Ordinance on Employment and Labor Leasing (l’ordonnance sur le service de l’emploi et la location de services, OSE),
- The Ordinance on Wages, Commissions and Securities provided for by the Law on Employment (l’ordonnance sur les émoluments, commissions et sûretés prévus par la loi sur le service de l’emploi, Oemol-LSE).
A placement agent seeks to connect the employer and job seekers so that they may enter into contracts.
Temporary recruitment implies that an employer surrenders the services of an employee to a labor leasing company by entrusting to the leasing company part of its managerial powers over the employee. This most often applies to interim or temporary work.
Application for a license
Any company that wishes to offer private employment and temporary recruitment on a regular basis and for remuneration must apply in writing for a cantonal license to the authority of the canton in which it is established.
In case of cross-border activities, a federal license is required in addition to the cantonal license. Once issued, the license is valid for an unlimited period and allows companies to offer the services in all of Switzerland.
A branch that does not have its seat in the same canton as the parent company must obtain a license specific to the canton in which it is operating.
When private employment is carried out via the Internet, and if the company only targets native job seekers, only a cantonal license is required.
Conditions to be met for obtaining the license
To be granted the license, a company:
- Must be registered in the trade register;
- Must have suitable commercial space;
- Must not engage in other professional activities which may conflict with the interests of the employer or job seekers;
- Must be headed by a person of Swiss nationality or possessing a residence permit (except for EU/EFTA nationals) and who has a good reputation and a certificate of completion of apprenticeship or equivalent training and can attest to several years of professional experience in the field of private placement and labor leasing services.
The cost for the grant of a license for private employment and temporary recruitment ranges between CHF 750 and CHF 1,650 depending on the workload for the authorities, while the cost for change of license ranges between CHF 220 and CHF 850. A deposit of between CHF 50,000 and CHF 150,000 must be paid by labor leasing companies (depending on their activities).
Revocation – Penalties
Private employment/temporary recruitment companies operating without a license may be subject to financial penalties ranging up to CHF 100,000. Companies that solicit the services of an unauthorized private employment/temporary recruitment agency may be fined up to a maximum of CHF 40,000.
The license can be revoked if it was obtained on the basis of inaccurate or false information and if the company has infringed legal provisions relating thereto or if the conditions for its issue are no longer met.
Once the license has been obtained, the responsible cantonal service may conduct audits of private employment and temporary recruitment companies. It examines, for example, wage amounts compared to conventional standards, the conformity of contracts used or the respect of the right to holidays.
Sources: www.travail.swiss website (April 2018); SECO, Department of Labor (May 2018)