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Source: US Global Legal Monitor

(Oct. 9, 2020) On September 27, 2020, Swiss voters in the canton of Geneva approved by a vote of 50.03% to 49.97% a popular initiative that introduces a minimum wage of 23 Swiss Francs (CHF) (about US$25) per hour for all industries. Voter turnout was 54.14%. The popular initiative amends the cantonal Labor Inspection and Relations Act (LIRA). The cantonal parliament of Geneva is required to adopt legislation to implement the popular initiative.

Due to the high cost of living in Geneva, with the city of Geneva being one of the 10 most expensive cities in the world, a minimum wage of CHF23 is required to live above the poverty line according to the organizers of the popular initiative. (Brochure Votation Cantonale, at 26.)

Background on Minimum Wage

There is no federally mandated minimum wage in Switzerland. A popular initiative that sought to introduce a federal minimum wage of CHF22 (about US$24) was rejected by 76.3% of voters in 2014. In 2017 and 2018, respectively, the cantons of Neuchâtel and Jura each introduced a minimum wage of CHF20 (about US$21.82). In the canton of Ticino a minimum wage of CHF19.75 to CHF20.25 (about US$21.55 to US$22.09) per hour will be gradually introduced in three steps starting January 1, 2021. Voters in the cities of Winterthur, Zurich, and Kloten in the canton of Zurich submitted or are in the process of submitting popular initiatives to introduce a local minimum wage of CHF23.

Content of the Popular Initiative

The popular initiative in Geneva introduces a minimum wage of CHF23 per hour for all industries “to combat poverty, promote social integration, and thus contribute to respect for human dignity.” (LIRA art. 1, para. 4 (new), art. 39K, para. 1 (new).) The new rules take precedence over provisions in individual contracts or collective agreements that provide for a lower wage. Apprenticeships, internships, employment contracts with persons under 18 years of age, and the agricultural sector are exempt from the new rules. In addition, the amendment provides for annual indexation to the cost of living. (LIRA art. 39J (new), art. 39K, paras. 2 & 3 (new), art. 39L (new).)

Employers who do not comply face administrative fines of CHF30,000 (about US$32,733). The amount may be doubled for repeated violations. Other administrative sanctions may be imposed depending on the severity of the violation, such as a refusal to issue, for a period of three months to five years, a certification that the company complies with the rules on working conditions and social benefits applicable in Geneva, which is mandatory to participate in a public procurement process; an additional fine of CHF60,000 (about US$65,466) or more; or a prohibition to bid on public contracts for a period of five years or more. (LIRA art. 39N (new), art. 45, para. 1 (new).)

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