Effective 1 July 2020, companies with at least 100 employees will have to carry out an internal wage equality analysis and have such analysis audited and communicated to the employees.
On 21 August 2019, the Federal Council decided that the amendment to the Equal Opportunities Act (EOA; Gleichstellungsgesetz) to improve the enforcement of equal pay shall enter into force on 1 July 2020.
The amendment to the Equal Opportunities Act was adopted by the Parliament on 14 December 2018. The referendum period against the resolution of the Parliament expired on 7 April 2019. The aim of the enacted amendment is to reduce the unexplained difference in pay between women and men.
Under the new provisions, companies with 100 or more employees are obliged to carry out an internal wage equality analysis. The number 100 (or more) does not refer to full-time positions, but to employed persons (excluding apprentices). The first internal wage equality analysis must be conducted by the end of June 2021 at the latest.
The Parliament has limited the wage equality analysis requirement to twelve years. Hence, the amendment to the Equal Opportunities Act and the associated ordinance will automatically expire on 1 July 2032. During this period, the companies have to repeat the wage equality analyses every four years, unless an analysis shows that there is no inexplicable systematic gender wage gap. In this case, no further analysis is required. Also, companies whose compliance with wage equality is examined in connection with a public procurement process or the granting of subsidies are not obliged to conduct any further analyses.
The wage equality analysis has to take into consideration all contributions for work performed by employees, thus including both the actual basic wage (the remuneration paid for the work performed) and all social wage components such as family, local and child allowances, gratuities and benefits in kind, including employee stock units, options or other equity. The Federal Government provides a free of charge instrument (Logib) to companies, which calculates the level of wage equality in the company by regression analysis. However, employers are free to use any other method to conduct their equal pay analysis as long as such chosen method is scientifically sound and legally compliant.
The analysis must be reviewed by an independent body. This body may be an auditing company, an organization pursuant to Article 7 EOA (i.e. an organization that, according to its statutes, promotes gender equality or safeguards the interests of employees) or an employee representation pursuant to the Swiss Participation Act. The Federal Council has laid down specific training criteria, which auditors who review equal pay analyses on behalf of employers will have to comply with.
There is no obligation to submit the results of the analysis to an authority or the public. However, listed companies have to publish the result of the analysis in the notes to their annual accounts. All companies have to inform their employees of the results of the analysis no later than one year after completion of the review.
The amendment does not foresee any legal sanctions in case of non-compliance with the provisions on equal pay analysis. However, failure to comply could lead to significant reputational risks as well as procedural disadvantages in discrimination related employment disputes, which will become more likely.