“Fictitious self-employment” in Switzerland

By Marc Ph. Prinz and Gian Geel, VISCHER
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Supposedly self-employed service providers (e.g., freelancers, contractors or subcontractors) in Switzerland are often in fact so-called “fictitiously self-employed persons”. As a result, the actual employer does not pay any social security contributions and there is a risk that the fictitiously self-employed person will not be covered by social protection for workers. If the fictitious nature of the self-employment is revealed, the employer faces various obligations, some of which are applied retroactively. But when is there fictitious self-employment and what are the legal consequences?

Prinz_Marc
MARC PH. PRINZ
瑞士菲谢尔律师事务所
合伙人
Partner
VISCHER, Switzerland

When is there an employment relationship or respectively fictitious self-employment? In practice, the distinction between normal employment and self-employment is important because of the different legal consequences. Therefore, it is necessary to examine, on the basis of economic circumstances, whether a service provider is actually self-employed or whether there is in fact an employment or similar relationship with all the rights and obligations associated with it.

Among others, the following criteria indicate an employment relationship: The service provider (1) does not have to provide a work result or a success, but rather a work performance on time; (2) is integrated into the work organization of the contractual partner; (3) is bound by the instructions of the contractual partner, that is, he does not act autonomously; (4) cannot move freely on the market, e.g. conclude contracts himself; (5) operates on a regular basis and essentially only for one (main) contractual partner (and is thus economically dependent on it); (6) is not paid on a flat rate but per hour; (7) is subordinated to the contractual partner, that is, it must not only be accountable, but the contractual partner can control the performance; (8) bears no entrepreneurial risk; (9) gets his working equipment provided by the contractual partner; and (10) has a need for protection.

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Marc Ph. Prinz is a partner of VISCHER in Switzerland. He can be contacted on +41 58 211 36 17 or by email at mprinz@vischer.com

Gian Geel is an associate of VISCHER in Switzerland. He can be contacted on +41 58 211 34 48 or by email at ggeel@vischer.com