Wage equality analysis shall eliminate wage inequality

Wage equality analyses and consequences for employers

On December 14, 2018, the Swiss Parliament adopted the amendment to the Gender Equality Act. A new Section 4a has been added to the Gender Equality Act, obliging employers to carry out an analysis of wage equality, to review it and to inform employees of the results of the analysis.

On August 21, 2019, the Federal Council issued the implementing ordinance regarding the amended legal provisions. The Federal Council therein defined the criteria for the training of lead auditors and regulated the review of the equal pay analysis by the central federal administration, the parliamentary services, federal courts, the Office of the Attorney General of the Confederation, the decentralised administrative units of the Confederation and companies close to the Confederation. Additionally, it has stipulated that the first equal pay analysis must be provided by June 30, 2021 at the latest.

The revised Gender Equality Act and the Ordinance on the Review of Wage Equality Analysis are due to enter into force on July 1, 2020. The period of validity of Section 4a and of the Ordinance on the Review of Wage Equality Analysis shall be limited to 12 years from the date of entry into force of the amendments, i.e. until June 30, 2032.

Affected companies and the process of the wage equality analysis

Article 13a para. 1 stipulates the obligation to carry out an internal analysis of wage equality using a scientific and legally compliant method. A free standard analysis tool called Logib is provided by the Swiss federal government.

Not only private employers are obliged to conduct the wage equality analysis, the duty applies likewise to employers of the Confederation, the cantons and the municipalities.

Companies with more than 100 employees (excl. apprentices) at the beginning of the reference year are legally obliged to carry out a wage equality analysis every four years (as long as at least 100 employees are employed). They must then undergo a review by recognised third parties, namely either (1) a formal review by senior auditors of an approved auditing company who have attended specific training courses or (2) a material review by an internal employee representation or organisation in accordance with Art. 7 of the Gender Equality Act.

Affected employers must carry out the first wage equality analysis by June 30, 2021 at the latest. 

It is to be noted that the revised law provides for an exemption from the obligation to analyse wage equality if a company is already subject to control for compliance with wage equality in relation to public procurement or the granting of subsidies, or if a company has been monitored over the last four years for compliance with wage equality and it has been demonstrated that the requirements for wage equality have been met.

Control and information duties

Following the wage equality analysis and subsequent review by third parties, private companies are legally obliged to inform their employees in writing of the results of the wage equality analysis within one year of the completion of the review by the bodies mentioned in the previous section and, in the case of a listed company, to publish the results of the wage equality analysis in the notes to the annual accounts.

Employers in the public sector shall publish the individual results of the wage equality analysis and the review.

Enforceability in practice

The current Gender Equality Act does not provide for public enforcement of the constitutional right to equal pay in the private sector. So far, the only way to proceed against individual wage discrimination is through wage claims under Article 5 of the Gender Equality Act. Only in government procurement has enforcement by the authorities so far been regulated by law.

Even the revised Gender Equality Act does not provide for any legal sanctions for violations of the provisions on wage equality analysis pursuant to Art. 4a of the Act. Direct sanctions such as fines etc. are therefore not to be feared, neither if no wage equality analysis is carried out nor in the event that the result of the analysis should prove wage discrimination.

Nonetheless, non-compliance with the provisions of the law is unlikely to be advantageous for companies and has consequences in contentious and non-contentious proceedings (consideration of the burden of proof in the case of wage claims pursuant to Art. 7 of the Gender Equality Act, etc.). Even in extrajudicial cases, non-compliance with the legal provisions is unlikely to have no consequences. In view of the current public discourse on wage discrimination, such behaviour can entail a considerable reputational risk and associated competitive disadvantages. In light of the public debate on gender equality, companies are well advised to therefore comply with the provisions of the law and carry out a wage equality analysis. However, it should be noted that wage equality analysis is not intended to reveal group or individual wage discrimination. Nevertheless, the result of the wage equality analysis may be an indication of the credibility for individual wage discrimination.

1 To be found at: EBG

September 2019 | Authors: Michèle Stutz, Gabriela Thut-Wermelinger

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