Legal Compass: Minimum wages in Switzerland – Background, legal framework and current situation

1. Introduction of minimum wages in Switzerland 

On 23 January 2012, the Swiss Trade Union (“USS“) launched the popular initiative “For the Protection of Fair Wages,” aimed at both protecting wages in Switzerland by promoting minimum wages in collective labor agreements and establishing a national legal minimum wage of CHF 22 per hour. This initiative was intended to address poverty and wage undercutting in Switzerland.

On 18 May 2014, the union-backed popular initiative was rejected by 76.3% of voters. In brief, opponents of the minimum wage argued that (1) the measure would impose a rigid framework on businesses, disregarding sector-specific needs and regional differences, (2) the minimum wage would undermine social partnership by reducing flexibility in negotiations, leading to wage leveling downward, and (3) the minimum wage would jeopardize jobs, resulting in higher unemployment rates in Switzerland.

Although the canton of Neuchâtel had initially rejected the USS initiative, it became the first canton in Switzerland to introduce in 2017 a minimum wage set at CHF 20 per hour. Subsequently, the cantons of Jura, Geneva, Ticino, and Basel-City established their own cantonal minimum wages, respectively in 2018, 2020, 2021, and 2022.

For 2025, the hourly and monthly gross minimum wages in these cantons are as follows:

Canton	Gross hourly wage for 42 hours of work per week, in CHF	Gross monthly wage for 42 hours of work per week, in CHF
Neuchâtel	21,31	≈ 3’880.-
Jura	21,40	≈ 3’905.-
Geneva	24,48	≈ 4’455.-
Ticino	20,00 – 20,50	≈ 3’649 – 3’741.-
Basel-City	22,00	≈ 4’014.-

 

In a similar vein, a Valais popular initiative for the introduction of a minimum hourly wage of CHF 22 has been successful. For the cantons of Vaud and Fribourg, popular initiatives aimed at introducing a minimum wage are currently underway. Basel-Country and Solothurn have rejected the introduction of a minimum wage for 2025.

The cities of Winterthur and Zurich, in turn, have approved two projects to introduce a minimum wage within their territories. However, the implementation of these projects is jeopardized— or at the very least delayed—due to ongoing appeals.

2. Legal framework

In Switzerland, minimum wages are embedded in various legal instruments, namely: (i.) collective labor agreements, (ii.) standard employment contracts with mandatory minimum wages, (iii.) cantonal constitutions, (iv.) cantonal laws, ordinances, and decrees, and (v.) professional customs.

i. Collective labor agreements (“CLA”)

A collective labor agreement is a written agreement between employers (often represented by employers’ associations) and employees (often represented by trade unions) that regulates the terms and conditions of employment and the relationship between the parties to the agreement within a company, profession, or specific industry sector. Traditionally, a CLA includes provisions concerning the conclusion, content (e.g., minimum wage, working hours, vacation, etc.), and termination of individual employment contracts.

The CLAs and the minimum wages they stipulate automatically apply to employees who are members of a contracting association, provided the employer is a party to the CLA.

At the request of the contracting parties, the scope of application of CLAs may be extended by the government to include all employers and employees within a specific economic sector or profession in Switzerland, including those who are not members of any union. In such cases, the minimum wages specified in the CLA must be applied to all employees within the sector (e.g., the CLA for hotels, restaurants, and cafés, the CLA for Swiss artisanal bakeries, pastry shops, and confectioneries, etc.). 

ii. Standard employment contracts with mandatory minimum wages (“CTT”)

In professions and sectors where no collective labor agreement applies, standard employment contracts that establish mandatory minimum wages are sometimes enacted by the government to counteract wage undercutting. For instance, the Federal Council has adopted a standard employment contract for domestic workers, which sets minimum wages for private household employees across Switzerland. These standard employment contracts with mandatory minimum wages may also be enacted at the cantonal level. There are eight such contracts in the canton of Geneva, including the CTT-Edom , which sets a scale of gross minimum wages for domestic workers.

If the minimum wages set by a cantonal CTT are higher than those provided by a federal CTT, the cantonal minimum wages take precedence.

iii. Cantonal constitutions

Some cantonal constitutions include provisions regarding the minimum wage. While these provisions do not define a specific amount, they affirm the principle. For instance, the constitution of the canton of Ticino states that everyone has the right to a minimum wage that ensures a dignified existence . However, this is not the case across all cantonal constitutions. In Geneva, for example, the constitution remains silent on the matter.

iv. Cantonal laws, ordinances, and decrees

In Geneva, a cantonal law  sets the minimum wage at CHF 23 per hour. Said minimum wage is indexed to the consumer price index.
On the other hand, the decree on the cantonal minimum wage for 2025  stipulates that “the gross minimum hourly wage is CHF 24,48” in Geneva. This decree implements the increase in the minimum wage due to its indexing to consumer prices.
For the canton of Jura, the same adjustment to the cantonal minimum wage is reflected in an ordinance implementing the law on the cantonal minimum wage .

v. Professional practices

In the canton of Geneva, professional practices are reference documents used to determine the wages and social benefits applied within a specific professional sector (e.g., architecture, graphic arts, butcher-charcuterie, etc.). The signatory companies are typically those that wish to benefit from certain services or gain access to Geneva’s public markets.

These practices stipulate minimum wages, and failure to comply with them may result in sanctions for the signatories (i.e., denial of access to public markets, fines of up to CHF 60’000).

3. Who is not subject to the minimum wage in the canton of Geneva?

Cantons and cities that have implemented a minimum wage generally include exceptions. In Geneva, the following categories are exempt from the minimum wage:

– Employees under the age of 18;
– Apprentices;
– Volunteers;
– Internships that are part of a school or vocational training program required by cantonal or federal legislation;
– Social or professional integration measures and/or internships mandated by cantonal or federal law.

Additionally, provided they meet the conditions established by the employment market supervisory board, the following are also exempt from the minimum wage in Geneva:

– Internships included in a higher education program not governed by cantonal or federal legislation;
– Internships required for admission to a higher education School;
– Pre-qualification internships;
– Professional integration internships;
– Occasional activities for social integration with support; and
– Summer jobs.

With regard to the sectors of agriculture and floriculture, a specific minimum wage of CHF 17,99 (2025) is established by the Geneva State Council.

4. Work permit : Salary requirements

An employer applying for a work permit for a foreign employee must ensure compliance with salary requirements if (1) the foreign employee – regardless of nationality – is posted to Switzerland, and (2) the employee is hired under a local contract and comes from a third country (i.e., a country that is neither a member of the European Union (“EU”) nor the European Free Trade Association (“EFTA”).
For nationals of the EU and EFTA hired in Switzerland under a local contract, salary requirements are not assessed when granting a residence permit.

5. Sanctions for non-compliance with the minimum wage – Examples from Geneva

In Geneva, the LIRT/GE imposes a fine for non-compliance with the minimum wage, which can reach up to CHF 30’000, with can be doubled in the case of repeated offences (Article 39N LIRT/GE). In this context, the Cantonal Office of Inspection and Labor Relations (“OCIRT“), which is responsible for ensuring the proper enforcement of the Geneva minimum wage, may charge the employer for the costs associated with the inspection.

Furthermore, companies subject to the Geneva professional practices may face an administrative fine of CHF 60’000. Such companies are also at risk of being excluded from public tenders for a period of five years and may be denied the issuance of a certificate confirming compliance with these practices (for a period ranging from 3 months to 5 years).

Additionally, the OCIRT compiles and publishes a list of companies in violation of the cantonal minimum wage, which can result in severe reputational consequences for these businesses. A labor procedure may also be initiated by the employee against the company in breach.

Lastly, if the employer fails to meet its obligation to ensure that posted workers receive the salary conditions prescribed by Swiss legal framework, the Law on Posted Workers allows administrative authorities to impose sanctions, including a ban on the company offering services in Switzerland for a period ranging from one to five years, or an administrative fine.

6. Latest developments

6.1 A law prioritizing extended national collective labor agreements over cantonal minimum wages?

Following the adoption of the motion by federal councilor Erich Ettlin, submitted on 18 December 2020, the Federal Council launched a consultation on the proposed amendment to the Federal Act aimed at extending the scope of the collective labor agreement. This draft law seeks to prioritize the minimum wages of extended national collective labor agreements over the mandatory cantonal minimum wage. This would mean that certain minimum wages could be reduced.
Opposed to this proposal, the Federal Council asserts that such a modification goes against several principles of the Swiss legal order, such as the division of competences between the cantons and the Confederation, as well as the principle of legality, which are guaranteed by the Federal Constitution.

6.2 Wage inequality in Switzerland – Statistics

On 19 March 2024, the Federal Statistical Office presented its 2022 data on wage inequality in Switzerland, broken down by industries. While the median Swiss salary shows a reassuring increase, the data reveals a concerning gap of CHF 8’915 between the median wage of the leading industry (i.e., tobacco industry) and the lowest-ranked sector (i.e., personal services). It also highlights a 0.8% decrease in real wages between 2020 and 2022.
These results have generated a significant divide between trade unions calling for wage catch-up and employer associations, that endorse the stability of the situation.