Posting Sales Representatives to Switzerland: Key Requirements and Legal Considerations
Posting sales representatives to Switzerland involves navigating specific notification and approval processes, which vary based on the length of stay. This article provides a comprehensive overview of the requirements and legal considerations for businesses planning to post representatives to Switzerland.
Notification and Approval Obligations
For assignments lasting up to 90 days per year, a simplified online notification procedure is available. However, if the assignment exceeds 90 days within a calendar year, a more complex approval process is required.
Posting for Up to 90 Days Per Year
Eligibility for Posting
Employees of companies based in the EU/EFTA, regardless of nationality, may work in Switzerland for up to 90 days per calendar year using the online notification system, without requiring a foreign employment permit. However, third-country nationals must have been part of the regular labour market in an EU/EFTA member state for at least 12 months prior to their posting.
Self-employed service providers from the EU/EFTA can also benefit from the 90-day rule. However, they are not subject to the Posting of Workers Act (EntsG) and must demonstrate their self-employed status to the relevant authorities upon request. Under Swiss law, self-employment is defined as working under one's own name and account, being independent, and bearing one's own economic risk. Failure to prove self-employment may result in classification as "pseudo-self-employed," subjecting the contractual relationship to the mandatory provisions of the EntsG.
Distinguishing Between Self-Employment and Employment
Determining whether a sales representative is self-employed or employed can be challenging. Even if a contract lacks typical employment elements from a Swiss legal perspective, it may still contain indicators of employment. Swiss courts tend to favour higher social protection in case of doubt. Therefore, it is recommended to register sales representatives under the EntsG, especially if they receive compensation exceeding EUR 5,000, which generally meets Swiss minimum wage requirements.
Calculating the 90 Days
The 90-day calculation is based on both the posting company and the sales representative, irrespective of how many representatives are posted on a given day or their locations. Once a representative has been posted for 90 days, they cannot be sent again under the notification procedure within the same calendar year. Only actual working days are counted.
Example Calculations:
- Posting four representatives for 10 days results in 10 of the 90 days being used.
- Posting two representatives for six days, followed by two others for another six days, results in 12 of 90 days being used.
If an assignment is shortened or cancelled, the relevant cantonal authority must be informed immediately. Extensions, postponements, or interruptions must also be reported. Changes, such as advancing an assignment, require a new online notification referencing the previous one.
Additional Deadlines
Notifications must be submitted at least eight days before starting work in Switzerland, except in emergencies like repairs or natural disasters.
Notification Procedure
Notifications are submitted electronically. A one-time registration is required, and the procedure is free of charge.
Exemptions from Notification
The notification procedure is mandatory for activities exceeding eight days per year. If the assignment is less than eight days, notification is generally unnecessary. However, if the assignment is expected to exceed eight days, notification applies from day one. The eight-day exemption does not apply to itinerant trade, which requires notification regardless of duration.
Posting for Over 90 Days Per Year
Assignments exceeding 90 days require approval from day one. These approvals are limited, and there is no legal entitlement. Extensions beyond 90 days are rarely granted and subject to stringent conditions, including alignment with Switzerland's economic interests, and eligibility limited to executives, specialists, and qualified personnel.
Itinerant Trade
Offering goods or services to consumers through itinerant trade requires a permit. Applicants must not have been convicted of crimes in the two years preceding the application. The permit is personal, non-transferable, valid for five years, and requires carrying an identification card. Applications are submitted in the canton where the activity begins, with specific fees for processing and issuing the card.
Compliance with Swiss Law
Posted employees (and pseudo-self-employed individuals) must adhere to the minimum working conditions set by the EntsG. If a generally binding collective agreement or standard employment contract applies, those conditions must be met throughout the assignment. Self-employed individuals are exempt from mandatory provisions regarding minimum wages, working hours, rest periods, holidays, and expenses.
Unfair Competition
Sales representatives must avoid engaging in unfair competition, which includes deceptive practices or actions against good faith. Examples of unfair practices include:
- Misleading product information
- Causing confusion with competitors' products
- Aggressive sales tactics
- Violating customary working conditions
Unfair behaviour can result in penalties, including imprisonment or fines.
Conclusion
Navigating the legal framework for posting sales representatives to Switzerland requires careful planning and compliance with notification and approval procedures. Businesses must ensure they meet all applicable requirements to avoid penalties and ensure smooth operations in Switzerland.
