In November 2015 the federal government submitted a draft bill for consultation, according to which employers with 50 or more employees are required to conduct a wage analysis every four years. The results of this survey must then be reviewed by external inspection bodies, such as chartered accounting firms.

According to draft, the external inspection bodies are obliged to report the salary analysis to the management. No later than one year after receipt of the report, companies must inform their employees of whether the wage analysis was carried out properly, but without rendering any recommendations.

Listed companies have additional public reporting requirements, ensuring that shareholders are kept abreast of the company's continuing efforts to achieve gender pay equality. The bill requires that employers offer an explanation if gender salary gaps exceed 5% (ie, a 5% gap would be a clear indication of pay inequality).

The legislative initiative came after a study by the Federal Statistical Office in 2014 revealed that the gender pay gap in the private sector is still around 15% – 10% of which cannot be adequately explained by objective factors such as professional education, experience and hierarchy.

Voluntary measures proposed by the federal government's Equal Pay Dialogue did not render sufficient results, despite the fact that equal pay is one of the legislative purposes of the Equal Opportunity Act enacted in 1995.

The federal government has also proposed that the Office for Equality between Women and Men file a report if an employer fails to conduct a wage analysis as required or does not undertake appropriate efforts to implement the findings of the wage analysis.

The consultation process – involving all political parties, major employer associations and trade unions – ended in March 2016 and was published in October 2016. Scepticism regarding the increased wage control mechanisms is widespread. Unsurprisingly, business-friendly political parties complain about the additional administrative burden, particularly for small and medium-sized enterprises. It is therefore proposed that only employers with more than 100 employees (instead of 50 employees) fall under the new regime. Certain parliamentarians have also pleaded for an automatic repeal of the proposed new law after 10 years.

Now that the consultation process has concluded, a federal 'gender wage police' – as the proposed amendments are sometimes dubbed – will have a tough time in upcoming parliamentary sessions.

For further information on this topic please contact Thomas Rihm at Rihm Rechtsanwälte by telephone (+41 44 377 77 20) or email (thomas.rihm@rihm-law.ch). The Rihm Rechtsanwälte website can be accessed at www.rihm-law.ch.

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