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Equal pay – Is your organization ready?

  • David Oberson, Partner |

In December 2018, the Swiss Parliament adopted an amendment to the Equality Act including a new section related to Equal Pay requirements between female and male employees.

In August 2019, the Federal Council set July 1, 2020 as the date for the entry into force of the amendment of the Equality Act. As a result, Organizations with 100 or more employees should complete the first equal pay analysis at the latest on June 30, 2021.

What you need to know

  1. Employers with 100 or more employees will have to conduct an internal equal pay analysis
  2. A methodology is provided by the Swiss authorities to perform the analysis in accordance with the rules set by the ordinance
  3. This analysis must be verified at the latest on June 30, 2022 by an external and independent provider such as an auditing firm, an organization Pursuant to Article 7 GEA or an employee representation pursuant to the Swiss Participation Act
  4. At least one year after the verification but at the latest on June 30, 2023, the result of this analysis must be communicated in written to employees
  5. For listed companies, the result of this analysis must be published in the annual financial report
  6. This analysis should be repeated every 4 years, unless the first analysis indicates that there is no inexplicable pay gap difference between employees of both sexes.
  7. There are no penalty sanctions in case of violation of the provisions, however it may impact the employer attractiveness on the market and reputational risk of the organization in case of non-compliance.

Why is this important?

Whether or not your organization may actually be impacted by the legislation, Equal Pay has become a key topic that organizations can no longer ignore.

Wage discrimination generally occurs without the employer even realizing it. The majority of employers in Switzerland actually believe that they respect equal pay whereas recent body of research suggests otherwise. Recent studies show more than half of these organizations have never reviewed their pay practices.

Equal pay analysis will make certified organizations more attractive as employers, help them to recruit and retain best talent and improve the reputation of the organization on the market place.

In addition, being committed to equal pay helps in demonstrating good governance and transparency to employees. It also allows your organization to anticipate the risk of any potential unequal pay case related to discrimination.

As a result, equal-pay is an indisputable advantage for the organization simply because fair working conditions are motivating female and male employees and it makes your organization more attractive as an employer.

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