Mandatory and voluntary fringe benefits in Switzerland

Fringe benefits are also known as fringe benefits. These are benefits from which you as an employee benefit in addition to your normal salary payment. These can be financial or other, non-material benefits. Some of these fringe benefits are prescribed by law and must be integrated into the corporate culture by the employer. Others are entirely voluntary and can be customised to best suit the company.

Fringe benefits can be an important tool with which companies can influence their employees to a certain extent. Good conditions and a positive salary structure not only ensure that vacancies can be filled quickly, but also that the best skilled workers are employed. Good fringe benefits can help a company to remain competitive with rival companies.

This increases a company's chances of being able to hire high-quality skilled workers. If employees are remunerated fairly, they are generally more eager to work. The same principle applies to fringe benefits: Voluntary benefits in particular are seen as a strong plus that can increase employee motivation. As a result, they are more committed to their job and perform better.

What is retention management?

The term retention management refers to the retention of employees in the company. People are generally the most valuable asset in a company - this includes employees as well as managers and the highest management level. It is only possible to manage a company successfully with committed, motivated and loyal employees. The more satisfied employees are with their employer, the more connected they feel to the company. Long-serving employees and managers can bring great added value to a company. Fringe benefits are one aspect that employers can utilise in this sense for their company. They are most effective when they are benefits from which employees benefit in the long term.

There are a number of different fringe benefits that a company can make use of. Employers cannot avoid some of them because they are enshrined in law. In addition to these mandatory benefits, however, there are many others that employers can decide for themselves.

Mandatory fringe benefits

Some fringe benefits are prescribed by law. They can be found, for example, in Article 362 of the Swiss Code of Obligations (CO) among the mandatory provisions. A change is only possible if it is in favour of the employee. Although fringe benefits of this kind are variable to a certain extent, they cannot be completely abolished. These include the following benefits, among others:

Insurances

Compulsory insurance is probably the largest part of fringe benefits. These include old-age and survivors' insurance, disability insurance, loss of earnings compensation scheme (EO) and unemployment insurance. The EO also includes maternity compensation, which women receive after the birth of a child. Another type of insurance is accident insurance, which is set out in the Federal Law on Accident Insurance (UVG). Among other things, it stipulates when employees are entitled to continued payment of their salary in the form of a daily allowance following an accident.

Paternity leave

Both maternity leave and paternity leave are mandatory benefits. They are regulated in Article 329f CO and Article 329g CO. Extended paternity leave in particular often sets a company apart from its competitors. The law stipulates that this must be for a period of two weeks and must be taken by fathers within the first six months after the birth. Employers are not allowed to waive paternity leave under any circumstances, not even through an individual employment contract. However, companies can set themselves apart by offering fathers a longer period of leave.

Paid holidays

According to Article 329a CO, all female employees are entitled to four weeks' holiday per year. These must be paid with the regular salary and may only be reduced in special cases. Holidays are also part of the mandatory regulations and may only be changed in favour of employees. An employer can therefore distinguish itself by offering more holiday days than is legally stipulated.

Voluntary fringe benefits

Many fringe benefits are not mentioned in the law. It is up to each employer to decide whether or not to introduce them in their company. Below you will find a selection of possible fringe benefits that a company can offer its employees:

Higher pension fund benefits: this is one of the most popular benefits for employees. The employer pays higher contributions into the pension fund than is mandatory. Health insurance premiums can also be one of the fringe benefits.

Transport: At the top of the list for many employees in Switzerland is a free car park on the company premises. Alternatively, public transport tickets are often offered. Company vehicles can also be among the benefits. These are often reserved for management or frequently travelling employees.

Mobile phones for private use: Mobile phones, laptops and similar items of this kind only count as fringe benefits if employees are also allowed to use them privately. Otherwise, they are merely items that the person needs to carry out their work.

REKA checks: These can be redeemed at various locations throughout Switzerland. For example, they can be used at petrol stations, in restaurants or for leisure activities.

This list goes on and on. The following benefits, among others, are also possible:

• Sabbatical
• Childcare
• Shares
• Products
• Free work clothes
• Food discounts

What fringe benefits are worth

The monetary value of fringe benefits cannot always be clearly determined. While some benefits have a clear value (e.g. a smartphone or a REKA check), others are not so easy to convert into a monetary value. This is particularly the case with benefits such as holidays or other benefits that are more likely to be measured in time. This improves the work-life balance and often also the quality of life and work of the beneficiaries. Employers should always bear in mind that excellent employees who stay with the company long-term can have a very positive impact on the company's performance. Satisfied and skilled employees are a company's most important assets.

In this respect, it depends on which benefit is involved. Those benefits that are prescribed by law as mandatory can either not be changed at all or only to the advantage of the employee. For example, the employer cannot shorten statutory holidays, but can certainly extend them. If it is not a statutory benefit, the employer can change it at any time. It is up to each company to decide which benefits it wishes to offer.

Are employees entitled to fringe benefits?

In principle, only the mandatory benefits are prescribed. All employees of the company are therefore entitled to these. The employer is also not permitted to override any special remuneration stipulated in the employment contract. After all, this was signed by both contracting parties and therefore cannot be amended without consent. Article 322d CO refers to this type of benefit as a bonus. Accordingly, special bonuses must be paid out if this has been agreed. The law explicitly mentions special payments at Christmas, at the end of the financial year and on other special occasions.

Employers should also take equal treatment into account when it comes to fringe benefits. Some benefits are only available to certain groups, which could put other employees at a disadvantage. This is the case, for example, with paternity leave or childcare. Anything to do with family can ultimately only be utilised by employees who have children. Childless employees could feel that they are treated unequally as a result.

One possible solution: fringe benefits can certainly be customised. This is even recommended. In this way, all employees receive the offer that is most beneficial to them personally. Ideally, employers should therefore offer a catalogue of benefits from which employees can choose which are best suited to their individual needs.

Fringe benefits and taxes

Most of the benefits must be considered for tax purposes and employers must declare them clearly in the salary statement. REKA cheques, for example, are exempt from this, but only up to a certain amount. An employment lawyer can best help you in this regard and advise you correctly.