Intra-Group Hiring Of Services: Licensing Requirements

Author:Mrs Valerie Meyer and Livia Keller
Profession:Niederer Kraft & Frey
 
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The Swiss State Secretariat for Economic Affairs SECO has issued a new guideline with regard to the licensing requirements for intra-group hiring of services ("2017 Guideline"). 1 In this guideline, SECO clarifies its guideline regarding the Federal Act on Employment Services and the Hiring of Services issued in 2003 ("2003 Guideline")2.

  1. Introduction

    Hiring of services (Personalverleih) on a professional basis within Switzerland requires a cantonal license issued by the competent Cantonal Labour Authority. Businesses providing staff from Switzerland for hire abroad further require a federal license issued by SECO. Non-compliance with such licensing requirements is punishable with a monetary fine of up to CHF 100,000.

    To date, it has been unclear whether intra-group hiring of services may be exempt from the licensing requirement. While the Federal Act on Employment Services and the Hiring of Services (AVG, Arbeitsvermittlungsgesetz) and the Ordinance on Employment Services and the Hiring of Services (AVV, Arbeitsvermittlungsverordnung) never provided for such exemption, SECO's 2003 Guideline explicitly stated that the licensing requirements do not apply in an intra-group situation.

  2. Key Points

    Principle: Intra-Group Hiring of Services Requires a License SECO's 2017 Guideline states that the Federal Act on Employment Services and the Hiring of Services does not contain any special rules regarding intra-group hiring of services, and that - notwithstanding the position taken in the 2003 Guideline - intra-group hiring of services is subject to the general licensing requirements. This applies in particular if intra-group hiring of services is provided professionally by a group company, and if companies within a group of companies are specifically set up to provide other companies with employees (so-called "staffing firms"). In such situation, the hiring of services is done on a professional basis as per the statute, and the employees must be granted the protection awarded to them by law. Exception: No Licensing Requirement in Exceptional Circumstances An exception from the licensing requirement may apply if intra-group hiring of services is (1) limited to individual cases and (2) done solely in order to (i) allow employees to gain professional experience abroad, (ii) assist with a know-how transfer, or (iii) occasionally as per the definition of the law. SECO's 2017 Guideline sets forth the following criteria that might serve as an...

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