Pay Equity Switzerland

Basic Summary

Switzerland's Gender Equality Act requires companies with 100+ employees to conduct mandatory equal pay analyses and have them audited by independent bodies. Results must be shared with employees and shareholders. This makes Switzerland one of the few countries with mandatory, audited pay equity assessments.

Key Legislation

Federal Act on Gender Equality (Gender Equality Act, GEA)

Enacted: 1995 (amended 2018 for pay analysis requirements)

Effective for pay analysis: July 1, 2020

Establishes the right to equal pay for work of equal value and prohibits gender discrimination in employment.

Ordinance on the Verification of Equal Pay Analysis

Specifies the methodology and audit requirements for pay analyses.

Mandatory Equal Pay Analysis

Scope

Employers with 100+ employees (calculated on June 30, 2020, and every subsequent reporting period)

Employee count: Includes all employees in Switzerland (full-time and part-time, converted to full-time equivalents).

Requirement

Employers must:

1. Conduct an equal pay analysis using the prescribed methodology
2. Have the analysis audited by an independent body
3. Inform employees of the results
4. Inform shareholders (for listed companies, include in annual report)

Timeline

First analysis: Completed by June 30, 2021 Audit and communication: By June 30, 2022 (one year after analysis) Second analysis: By June 30, 2025 (4 years after first)

If compliant after first analysis: No need for second analysis (one-time requirement). If non-compliant: Must repeat analysis after 4 years and demonstrate improvement.

Methodology: Logib

Logib Software

The Swiss government provides Logib, a free statistical tool for conducting equal pay analyses.

Logib uses regression analysis to:

• Compare pay between men and women
• Control for legitimate explanatory factors (e.g., experience, education, seniority, position level)
• Identify unexplained pay gap attributable to gender

Logib Process

Step 1: Data Collection

Gather for each employee:

• Gender
• Gross monthly salary (standardized to full-time equivalent)
• Years of service
• Years of potential professional experience
• Educational level
• Position/function level
• Other relevant factors (industry-specific)

Step 2: Regression Analysis

Logib runs a regression model controlling for:

• Educational level (required training)
• Experience (years of relevant professional experience)
• Seniority (years with current employer)
• Position/function level (hierarchical level, responsibility)

The model calculates the unexplained pay gap (gender coefficient).

Step 3: Interpretation

Threshold for compliance: Unexplained gap ≤5% (in either direction)

• ≤5% gap: Compliant (statistical tolerance range)
• >5% gap: Non-compliant; suggests potential gender-based pay discrimination

Minimum Sample Size

Analysis is only valid if:

• At least 50 employees in the dataset
• Sufficient variation in explanatory variables

If sample is too small or homogenous, Logib may not produce reliable results.

Audit Requirement

Independent Audit

Equal pay analysis must be audited by:

• An independent, accredited audit firm, or
• Employee representatives (works council, union) if no audit firm is engaged

Audit firm requirements:

• Independence from employer
• Expertise in statistical/compensation analysis

Audit scope:

• Verify data quality and completeness
• Confirm correct application of Logib methodology
• Validate results and conclusions

Audit Report

Auditor issues a report confirming:

• Methodology was applied correctly
• Results are reliable
• Employer is compliant or non-compliant (based on ≤5% threshold)

Information Obligations

Inform Employees

Employers must inform all employees of the results of the equal pay analysis:

• Whether the company meets equal pay requirements (compliant/non-compliant)
• General findings (but not individual employee data)

Timeline: Within one year of completing the analysis (by June 30, 2022 for first analysis)

Method: Written communication (e.g., internal memo, intranet posting, announcement)

Inform Shareholders (Listed Companies)

Publicly listed companies must include analysis results in their annual report (management report or compensation report).

Enforcement and Consequences

No Direct Penalties

Switzerland does not impose fines for non-compliance with the analysis requirement or for failing the ≤5% threshold.

Indirect Consequences

• Reputational risk: Public disclosure (for listed companies) may harm reputation
• Employee claims: Results can be used as evidence in individual equal pay lawsuits
• Shareholder pressure: Investors may demand corrective action

Individual Equal Pay Claims

Employees can file lawsuits for pay discrimination under the Gender Equality Act:

Burden of proof: Shifts to employer once employee establishes prima facie case of unequal pay Remedies:

• Back pay (up to 5 years)
• Prospective pay adjustment
• Compensation for damages Costs: Prevailing employee recovers legal fees

Sunset of Mandatory Requirement

One-Time or Ongoing?

Currently, the mandatory analysis is intended as a one-time requirement (or twice if first analysis shows non-compliance).

After June 30, 2026: If employer demonstrates compliance, no further mandatory analyses required (though voluntary analyses remain best practice).

Government review: Authorities will assess whether to extend or strengthen requirements based on outcomes.

Best Practices

Conducting Analysis

1. Ensure data quality: Accurate, complete HRIS data on gender, pay, experience, education, seniority, position
2. Use Logib correctly: Follow instructions and ensure all fields are populated
3. Interpret cautiously: A compliant result (≤5%) does not guarantee there is no discrimination; it means the unexplained gap is within tolerance
4. Engage experts: Consider compensation consultants for complex analyses

If Non-Compliant

1. Investigate root causes: Is gap due to starting salaries, promotion patterns, or other factors?
2. Remediate pay gaps: Adjust salaries where disparities are not justified
3. Document actions: Show shareholders and employees the steps taken
4. Re-analyze in 4 years: Demonstrate improvement

Beyond Compliance

• Conduct voluntary analyses annually or biannually
• Expand scope: Analyze gaps by age, nationality, or other dimensions
• Transparent communication: Build trust by sharing findings and actions
• Board accountability: Make pay equity a board-level priority

Resources

• Logib Software: https://www.logib.admin.ch (free download)
• Federal Office for Gender Equality (FOGE): https://www.ebg.admin.ch
• Gender Equality Act (full text): https://www.fedlex.admin.ch
• Guidance on Equal Pay Analysis: https://www.ebg.admin.ch/ebg/en/home/topics/work/equal-pay/analyse.html

Compliance Calendar

Date	Action
June 30, 2021	Complete first equal pay analysis (100+ employees)
June 30, 2022	Complete audit and inform employees and shareholders
June 30, 2025	Complete second analysis (if first was non-compliant)
June 30, 2026	Complete second audit and reporting
Ongoing	Voluntary analyses recommended annually

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Disclaimer: This guide is for informational purposes only and does not constitute legal advice.