Understanding your Swiss Payrolling contract: key clauses, rights and responsibilities

Signing a payrolling contract is a little like boarding an express train: it is fast and convenient, but you still need to know where it is taking you and under what conditions. Between legal jargon, remuneration calculations and shared responsibilities, understanding your contract is more than just a precaution: it is the key to avoiding unpleasant surprises and making the most of this way of working. So, what are the key elements you need to understand in order to properly navigate the specific features of a payrolling contract?

I. The employment contract between the employee and the payrolling company

Under the payrolling model, the professional signs a Swiss employment contract with the payrolling company. The payrolling company becomes the employee’s official employer. Depending on the client’s or project’s requirements, the employment contract may be fixed-term or open-ended.

Type of contract: open-ended or fixed-term

• Open-ended employment contract: This provides continuity of employee status, including between assignments, subject to internal arrangements.
• Fixed-term employment contract: This is used for specific assignments over a limited period. The contract ends when the assignment comes to an end, unless it is renewed.

Key contractual provisions

• Assignment period and place of work: The contract may specify the estimated duration of the assignment and the location where the work will be performed.
• Remuneration: Gross salary is determined on the basis of the fees invoiced to the client by the payrolling company, less social security contributions and management fees.
• Working time and hours: These are defined contractually in agreement with the end client.
• Professional obligations: The employee must comply with the client’s instructions and perform the services in accordance with the expected professional standards.

II. The relationship between the payrolling company and the client company

Under the payrolling model, the payrolling company manages the contractual relationship with the employee and invoices the services provided to the client company. The client therefore benefits from the expertise of a qualified professional without assuming the obligations associated with an employment contract.

The role of the payrolling company

• Legal employer: The payrolling company is responsible for paying the salary, making social security declarations, taking out the relevant insurance policies and handling related administrative obligations.
• Client invoicing: It establishes the pricing conditions for the assignment and manages the invoicing process.

Nature of the relationship with the client

• The payrolling company may enter into a service agreement or staff-leasing agreement with the client company.
• The client remains responsible for defining the assignment, overseeing the day-to-day work and approving deliverables.

Assignment conditions and invoicing

• Tasks and objectives: These are defined by the client company and approved by the payrolling company.
• Invoicing arrangements: These are based on a daily or monthly rate agreed in advance.

III. Specific clauses to review carefully in the employment contract

Certain provisions of the employment contract are particularly important to understand, as they define the employee’s rights and limitations during the assignment.

Non-compete clause

• This may prohibit the employee from working for one of the client’s competitors during or after the assignment.
• To be valid, it must be limited in terms of duration and geographical scope.

Confidentiality clause

• This protects the client’s sensitive information.
• Any unauthorised disclosure may result in disciplinary or legal sanctions.

Liability and insurance clause

• The employee is responsible for the quality of the services provided.
• The payrolling company provides professional liability insurance, covering risks related to the performance of the assignment.

IV. Rights and protections of employees under the payrolling model

Employees working under a payrolling arrangement benefit from the same rights as any other employee in Switzerland.

Social security benefits

• Health insurance: Mandatory and paid by the employee under the Swiss Health Insurance Act (LAMal).
• Accident insurance (UVG/LAA): Covered by the employer.
• AVS/OASI, AI/DI, AC/ALV and LPP/BVG contributions: Automatically deducted and paid to the relevant institutions by the payrolling company.

Additional insurance and pension arrangements

• Loss-of-earnings insurance: This may be included depending on the applicable arrangements.
• Occupational pension scheme (second pillar): Mandatory above a certain annual salary threshold.

Legal support

In the event of a dispute with the client, the payrolling company acts as a mediator and may support the employee with legal proceedings, within the limits of its contractual obligations.

Conclusion

A payrolling contract is not merely an administrative formality: it is your roadmap, your safety net and, in some cases, your shield. By understanding it clearly, you gain more than peace of mind: you ensure that you can fully benefit from the advantages of the system while remaining in control of your rights and obligations. Before signing, take the time to read the contract carefully, ask questions and, if necessary, request clarification. After all, a well-drafted contract will be your strongest ally.

Helvetic Payroll is committed to supporting its employees throughout their assignments and to providing a framework that complies with Swiss law and the requirements of the Swiss State Secretariat for Economic Affairs (SECO).

About Helvetic Payroll

Helvetic Payroll is the leading payrolling provider in Switzerland. Since 2021, we have been part of the Freelance.com Group, the European leader in secure solutions that empower talents and companies alike.

Need support or advice? Contact us, or discover our career opportunities.