Things to know about the deposit requirement in Switzerland
Collective labour agreements
Working conditions in Switzerland are governed by collective labour agreements in numerous industries. Collective labour agreements are concluded by the relevant professional associations on the employer side and by the trade unions involved on the employee side. As a result of the official act of declaring collective labour agreements to be generally binding, they are legally binding not only for the members of the contracting associations, but also for all domestic and foreign companies and their employees who work in this industry.
Many of these collective labour agreements provide for a deposit requirement. The deposit requirement serves to secure the employers' obligations to the contracting parties under the collective labour agreement. Accordingly, a deposit must be paid by all domestic and foreign companies operating in the relevant industry.
A collective labour agreement is administered by a joint commission. This includes, among other things, monitoring compliance with the collective labour agreement, charging enforcement costs, collecting deposits and pronouncing contractual penalties in cases where the collective labour agreement has been violated.
Central Deposit Administration Authority Switzerland (ZKVS)
Practically all joint commissions whose collective labour agreement provides for a deposit obligation have entrusted the ZKVS. ZKVS is a division of AMS Arbeitsmarkt-Services AG in Pratteln, and specialises in deposit administration. On behalf of the joint commissions, ZKVS is responsible for the uniform implementation and management of the deposit obligation (in particular the demand, administration, claiming and refunding of deposits).
A company only has to pay a deposit once in Switzerland. This deposit is then valid everywhere in Switzerland, regardless of where it is used and regardless of its specific activities. A deposit can be paid in CHF or EUR into a blocked account (so-called cash deposit) or by depositing a bank or insurance guarantee. The guaranteeing banks and insurance companies must be subject to the Swiss Financial Market Supervisory Authority (FINMA).
Deposit before commencement of work
The deposit must be paid before the start of work. The companies concerned will be individually requested by ZKVSto provide a deposit by email, fax or letter, enclosing a leaflet and a sample guarantee certificate, and will be informed of the obligation to provide a deposit. Nevertheless, it is the responsibility of each company to ensure that a deposit is validly paid or provided before the start of work - even if no request has yet been issued by ZKVS. Otherwise, the company runs the risk of being charged a penalty in the event of an inspection due to the missing deposit.