EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Limited, each of which is a separate legal entity. Ernst & Young Limited is a Swiss company with registered seats in Switzerland providing services to clients in Switzerland.
Implications for Swiss Companies
Although Switzerland is not a member of the European Union, the EU Pay Transparency Directive nevertheless affects many Swiss employers. Swiss companies must comply with the Directive whenever their activities involve employees and operations within the EU. This includes situations where Swiss based organizations employ workers located in EU Member States or recruit for positions based in the EU.
The Directive’s influence extends beyond strict legal requirements. Market trends in Switzerland indicate a growing shift toward greater pay transparency, driven in part by alignment with evolving EU practices. Swiss employees increasingly expect employers to demonstrate equal pay practices. While these expectations do not mirror formal transparency requirements, they nonetheless create pressure by effectively shifting the burden of proof onto employers.
At the corporate level, multinational Swiss headquarters are progressively adopting EU aligned frameworks to simplify compliance processes across jurisdictions and to ensure consistency across global operations, for example through harmonized job architecture.
Pay equity metrics are receiving heightened attention in governance reporting and stakeholder reviews, making early alignment with transparency obligations strategically advantageous. Swiss companies that proactively adapt to these developments position themselves more effectively in both regulatory and competitive contexts, demonstrating a commitment to fairness, transparency, and responsible business practices.
Recommended Actions for Organizations
With the implementation deadline approaching, affected employers are encouraged to begin preparations as early as possible. Effective readiness will require coordinated efforts across several key areas, starting with the foundational principles that guide pay‑related decisions. We outline the central starting points below:
1. Strengthening the Job Architecture and Pay Structures
A clear, objective job architecture is the backbone of compliance. This clarity supports transparency during hiring and provides a defensible basis for pay decisions. Employers should:
- Review and modernize job families and levels.
- Ensure job evaluation criteria are gender neutral and consistently applied.
- Ensure appropriate salary bands are allocated to all functions.
2. Conduct a Pay Equity Analysis
Early diagnostics enable corrective action before reporting obligations begin. With roles clearly defined, organizations should:
- Analyze pay gaps across comparable roles (categories of workers).
- Identify unexplained gender pay gaps.
- Prioritize areas with gaps above 5%, which may trigger future joint assessments.
3. Review Hiring, Promotion, and Performance Processes
Changes in hiring, promotion and performance reduce bias and enhance fairness in the employee lifecycle. To align with the Directive, employers should:
- Eliminate the use of salary history information.
- Document and communicate pay setting and progression criteria.
- Ensure performance evaluations are structured and consistently applied.
4. Establish Cross Functional Governance
Reliable Human Resources (“HR”) and payroll data will be essential, especially for reporting purposes. Successful implementation requires collaboration between:
- HR
- Legal
- Reward
- Payroll
- Local business leads
5. Prioritize Internal Communication and Training
Clear communication strengthens confidence and ensures smooth adoption of new processes. Transparency obligations introduce new expectations for managers and HR professionals. Organizations should:
- Prepare managers to respond to pay related inquiries.
- Train HR teams on new rights and reporting requirements.
- Develop communication materials to support clarity and employee trust.