Legal Compass Switzerland: Employment Law

1. Background

On 10 November 2020, popular initiatives entitled “A Living Wage” for the introduction of a municipal minimum wage were submitted in the cities of Zurich, Winterthur and Kloten respectively. At the popular vote on 18 June 2023, the proposals were approved by voters in Zurich and Winterthur. In Kloten, the minimum wage initiative was rejected by voters.

Economic associations filed legal remedies against the minimum wage provisions of the cities of Zurich and Winterthur.

2. Current Status

The Federal Supreme Court rulings 2C_28/2025 and 2C_30/2025 of 12 May 2026 have confirmed the municipal minimum wage provisions of the cities of Zurich and Winterthur.

The executive authorities of Zurich and Winterthur must now implement their minimum wage ordinances. The date of implementation is yet to be determined.

3. Minimum Wage in the City of Zurich

As a counter-proposal to the popular initiative, the City Council of Zurich adopted the Ordinance on the Minimum Wage (Minimum Wage Ordinance) on 1 March 2023. The minimum wage aims to contribute to improving living conditions and to protect against in-work poverty.

The minimum wage applies to all employees who perform most of their work in the territory of the City of Zurich. Excluded are employees who:

• are completing an internship with an educational character limited to a maximum of twelve months,
• work as apprentices in accredited training companies,
• are family members in family businesses and thus exempt from the provisions of labor law pursuant to Article 4 para. 1 of the Federal Act on Employment in Industry, Trade and Commerce (Employment Act),
• participate in vocational and social integration programs,
• are younger than 25 years of age and cannot demonstrate at least a vocational qualification at the level of the Federal Vocational Certificate based on a two-year basic training program followed by an examination, or an equivalent qualification process in accordance with the Federal Act on Vocational Education and Training (Federal VET Certificate); or
• are subject to cantonal personnel law or federal personnel law.

The City Council may provide for further exceptions.

The minimum wage is CHF 23.90 gross per hour. Holiday and public holiday compensation are not included in this amount.

The City Council may review the level of the minimum wage annually and increase it as of 1 January of the following year on the basis of the development of the Swiss consumer price index and nominal wage development.

Violations of the Minimum Wage Ordinance are punishable by a fine. Legal entities are jointly and severally liable for fines and costs imposed on their corporate bodies or auxiliary persons. Serious and repeated violations lead to exclusion from participation in public tenders for a period of between one and five years.

Upon substantiated request, the City Council may grant businesses that demonstrably have financial difficulties a two-year transitional period from the date of entry into force of the Minimum Wage Ordinance, during which compliance with the minimum wage is not required.

4. Differences between Zurich and Winterthur

The Ordinance on the Minimum Wage of the City of Winterthur contains similar but not identical provisions to the regulation of the City of Zurich.

For example, there are differences in the exceptions from the scope of application. In Winterthur, the minimum wage does not apply to employees who are younger than 18 years of age and perform work during the school holidays in connection with their primary education. In contrast, in the City of Zurich, an exclusion applies if employees are younger than 25 years of age and cannot demonstrate at least a vocational qualification at the level of a Federal VET Certificate. In both cities, apprentices in accredited training companies are also excluded from the scope of the minimum wages. There are further differences between the two municipal minimum wage ordinances of the cities of Zurich and Winterthur.

In Winterthur, the minimum wage is CHF 23.00 gross per hour (Zurich: CHF 23.90 gross).

Both cities may adjust the minimum wages annually as of 1 January in line with annual inflation developments.

5. Calculation of the Monthly Wage

For the conversion of the minimum wage as an hourly wage into a monthly wage, the weekly working hours agreed with the respective employer are decisive.

If 42 weekly hours apply, an average of 182 working hours per month is assumed. The calculation for the minimum monthly wage in the City of Zurich results in the following monthly wage for this example:

CHF 23.90 x 182 = CHF 4,349.80 gross

Alternative calculation formula based on 42 weekly hours:

CHF 23.90 x 42 x 52 : 12 = CHF 4,349.80 gross

This minimum monthly wage is to be paid twelve times per year and already includes holiday pay and pay for work-free public holidays.

The calculation is based on the minimum wage according to the Ordinance of 1 March 2023 of the City of Zurich. It remains to be seen whether the minimum wage will be increased as of 1 January 2027 due to inflation in the intervening period. The date of entry into force of the Minimum Wage Ordinance is also not yet known.

6. Overtime work and extra hours

If the employee is required to work more than the agreed working hours, this constitutes overtime. Under Swiss law, overtime work is remunerated at 125% of the normal wage. Alternatively, overtime may be compensated by (paid) time off in lieu within a reasonable period, provided the employee agrees.

An agreement deviating from the statutory overtime regulations may be concluded in writing, provided that minimum wage requirements are strictly observed. The written form requirement means that the parties must sign the agreement by hand or by qualified electronic signature under Swiss law.

Overtime work must be distinguished from statutory extra hours under mandatory labor law. Extra hours occur when the statutory maximum weekly working hours under the Employment Act – 45 or 50 weekly hours depending on the sector – are exceeded. In this case, there is a mandatory statutory entitlement to wages with a supplement of 25%. Alternatively, extra hours may be compensated by paid time off in lieu within a reasonable period, provided the employee agrees. Office staff, technical and other employees in office-like occupations primarily engaged in mental work, as well as sales personnel in large retail enterprises employing more than 50 workers at the same location, are subject to a maximum weekly working time of 45 hours. However, entitlement to compensation for extra hours requires the employee to work more than 60 (extra) hours per calendar year. Extra hours are subject to additional restrictions and legal requirements.

7. Collective Bargaining Agreements

The recent Federal Supreme Court rulings have not ended the minimum wage debate. At the federal level, new rules are already being negotiated. Under an ongoing legislative process, generally binding collective bargaining agreements concluded by industry and professional associations (CBA) are to take precedence over cantonal minimum wage provisions, even where lower minimum wages have been agreed in such CBA. According to the Federal Council’s dispatch of 13 December 2024 on the proposed legislative amendment, this precedence is also intended to apply to municipal minimum wages. This crucially affects the City of Lucerne’s newly introduced wage floor and the pending rollouts in Zurich and Winterthur. However, the trade unions have announced a referendum against the planned amendment to federal legislation.

Under the current legal framework, cantonal and municipal minimum wages take precedence over CBA, even where such agreements have been declared generally binding by the competent authority. The cantons of Geneva, Basel-Stadt, Jura, Neuchâtel and Ticino have introduced cantonal minimum wages. The City of Winterthur’s Minimum Wage Ordinance provides for a transitional rule requiring the social partners to adjust the minimum wages agreed in a CBA within one year of the municipal minimum wage taking effect.