In 2023, the European Union adopted a directive aimed at strengthening pay transparency in Member States. This must be fully incorporated into national legislation by June 2026.
Soon, European companies with more than 100 employees will therefore have to analyse and publish their pay ranges. The aim is to make negotiations fairer and to limit unjustified pay gaps between women and men. This gap is still estimated at between 12% and 13% in Europe.
Job applicants will be able to find out the pay range for a role before the interview, and access the average pay of colleagues in equivalent roles. If, following the publication of reports, a gap of more than 5% is found without justification, corrective and binding measures must be put in place.
A taboo subject
In Switzerland, the issue of pay is a sensitive one. Comparing one’s earnings with those of colleagues is often taboo.
The press has reported on situations where pay transparency was introduced overnight in the workplace, leading to conflicts within teams, a prevailing sense of injustice and even resignations. A ‘transparency shock’ that can disrupt working relationships.
This is all the more likely to occur if figures are made public overnight out of context, without explanation regarding criteria such as experience, the scarcity of skills and initial negotiations.
Swiss legal framework
A proposal to enshrine pay transparency in law was raised in Parliament in 2018. However, the bill failed. In our liberal country, this type of regulation tends to rely more on social partnership than on state intervention in corporate decisions.
Since 2020, the Equality Act has nevertheless stipulated that firms with more than 100 employees must carry out an internal pay equality analysis every four years. This must be verified by an external body and the results must be communicated to employees.
How does this differ from European law? Here, no sanctions are provided for in the event of unjustified inequalities. This limits the scope of the scheme. In response to this shortcoming, the trade union Travail.suisse lists on a public website the companies that comply and those that do not – a ‘white list’ and a ‘blacklist’.
According to the Swiss Employers’ Association, it is mainly in the area of communication that shortcomings are common – analyses are carried out, but the results are not systematically communicated on a large scale, or only through annual reports.
Some companies guarantee upon recruitment that equal pay is in place. The public sector is already transparent, with pay bands based on role and experience. However, certain sectors such as finance or insurance remain particularly opaque, due to bonus-based remuneration systems.
Collective agreements can mandate pay equality in their provisions – this is the case with the MEM industry’s collective agreement. According to 2024 figures, the gender pay gap in Switzerland still stands at around 12%. This figure must be analysed whilst taking into account that more women work part-time. However, for an equivalent position and percentage of working hours, they would earn CHF 684 less per month than their male colleagues.
Will European law change anything?
This is a particularly relevant question for companies that recruit internationally, have subsidiaries or their headquarters abroad, or those that employ a large number of cross-border workers.
According to Tamedia, UBS is preparing to implement the EU directive at its EU sites, but the bank has not specified whether it intends to extend these measures to Switzerland. Other giants such as ABB, Holcim, AXA and Zurich are adopting a similar stance. Job advertisements from these groups published in EU countries sometimes already mention the minimum salary for the positions advertised. Furthermore, the pharmaceutical groups Roche and Novartis have openly stated their intention to improve pay transparency in their Swiss subsidiaries as well.
Regardless of the European legislation, an increasing number of federal administrations and public institutions are openly publishing their pay ranges. This is the case with Swiss Post and SBB, which include them in their job advertisements. Some SMEs are also choosing this approach. This strengthens the employer brand. Values such as openness and equality are increasingly sought after and valued in today’s workplace.
A policy that promotes equality
In countries where pay transparency is widespread (Norway, the United States), analyses show that it helps to limit excessive pay gaps across different levels of the hierarchy. It primarily benefits the lowest-paid roles and, if the rules are properly applied, promotes pay equality between men and women.
In the meantime, there are certain tools that allow job seekers to estimate what the fair wage would be for their sector based on the role, region and experience. Examples include lohncheck.ch or the calculator from the Federal Statistical Office (FSO), which is based on real data.
