How to implement successfully the Swiss Equal Pay law?

Johannes (Joop) Smits Director, People and Organisation | Geneva, PwC Switzerland 17 Jan 2019

The Swiss Parliament agreed last December on details for a revision of the equal pay regulation. What are the latest revisions and how can your company prepare for this upcoming legislation? Our PwC experts answer these questions.
What is the law change about?

On 3 December 2018, the Swiss Parliament agreed on the last details for a revision of the equal pay regulation. In brief, the proposed revision encompasses the following:

  1. Companies, with at least 100 employees at the beginning of a given year, are compelled to conduct an equal pay analysis for that given year – apprentices are not considered
  2. The analysis will have to be repeated every 4 years – this obligation is forfeited when a company demonstrates equal pay between women and men
  3. Companies are free to select a specific method provided it is scientific and legal. Alternatively, companies can apply a standard tool developed by the Confederation
  4. The analysis will have to be verified by an external auditor or by a representation of staff
  5. Companies will have to share the results of the analysis with the employees of the company and, in case the company is listed on a public stock exchange also to its shareholders

This revised law is subject to referendum, provided 50'000 voters or 8 cantons request a vote within 100 days of the official publication of the decree, after which the Federal Council will decide on the final date of entry into force. Provided the law revision passes the referendum, if any, a re-evaluation will be done 9 years after the entry into force. The law will be valid for 12 years.

The Parliament also indicated that there would not be any sanctions in case of non-compliance with the equal pay requirements.

What you can do next?

In order to prepare yourself for the upcoming changes in pay legislation, we recommend the following:

  1. Inventory: Look at your pay policies and practices to understand how your salaries and bonus are set
  2. Analysis: Conduct equal pay assessments across your workforce to understand your starting point
  3. Repair: Define areas of improvement and develop programs to fix the gaps
  4. Audit: Request external auditors to review the situation

Generally, companies do not consciously pay women differently from men. However, in practice we see significant pay gaps that companies were not expecting. Even companies that operate sophisticated recruitment and performance management processes may be affected by unconscious bias that lead to unintended discrimination.

Our specialists work with a wide variety of organisations on this topic and would be glad to support you on this important topic. Please do not hesitate to connect if you would like to exchange ideas or learn more.

Summary
  • The Swiss Parliament agreed on the last details for a revision of the equal pay regulation. The revised law is subject to referendum with a deadline set at 8 April 2019.
  • Provided the law revision passes the referendum, if any, a re-evaluation will be done 9 years after the entry into force. The law will be valid for 12 years.
  • Unconscious bias leads to unintended discrimination that is reflected in significant pay gaps.

 

Contact us

Johannes (Joop) Smits

Johannes (Joop) Smits

Director, People and Organisation | Geneva, PwC Switzerland

Tel: +41 58 792 91 64