In Switzerland, the principle of equal pay for women and men has been enshrined in the Federal Constitution for 36 years. Despite this commitment, there is an unexplained difference in the pay between genders amounting to 7.4%.

On 5 July 2017, the Federal Council announced this new figure showing the significant wage gap. It has presented parliament with a bill (amendment of the Gender Equality Act) to compel firms with at least 50 employees to conduct a gender wage audit every four years. The results of the audit would be made public to all employees and, for publicly traded companies, also has to be published in the exhibits to the annual financial statements.

It is anticipated that only 2% of Swiss companies would fall under the proposed new regulations. The federal government intends to exempt companies with less than 50 employees since it is deemed too expensive and time-consuming for smaller firms to comply with the requirements. Nonetheless, the proposed equal pay measures would encompass 54% of the Swiss workforce and, therefore, may still contribute to correcting gender-specific pay discrimination.

The aim of the proposed equal pay measures is to reduce the unexplained difference in pay. The proposal follows a dialogue with the industry and while some companies have taken voluntary measures, little success was visible. The new proposed law is born out of the government’s disappointment at perceived corporate realization on the equal pay question.

The Swiss parliament will now need to decide on the proposed law. The outcome is open: Only half of the parties involved in the consultation period were in favor of the new proposed equal pay measures. The bill does not contain state controls or reporting obligations, but only external audits through auditing companies, recognized equal pay experts or the employees’ representative body.

Irrespective of the parliament’s decision, the proposed bill shows that there is great interest in establishing pay equality between genders. Employers are advised to review their pay policies periodically to assess whether there are any unexplained differences between women and men as they might be discriminatory and therefore constitute a (financial) risk. In addition, companies that fail to pay women and men equally could even be excluded from public procurement processes and deprived from subsidies.

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