Currency used for salary payments: What are the employee’s rights? How can it be changed?

For both the company and the employee, the terms of paying a monthly salary become more complex once the employee requests payment in a foreign currency. Converting the amount from Swiss francs into another currency often brings complications in terms of cost and procedure.

Here, without further ado, are the rights you have and the alternatives available to you in such a situation.

Current context for salary payments

Choice of payment currency

In Switzerland, employees are generally paid in the national currency.

However, certain conditions allow the employer to pay the salary in a foreign currency. This case frequently arises when a foreign worker (for example, a cross-border commuter) carries out their job on behalf of a Swiss company.

For payment in a currency other than the Swiss franc to take place, it is recommended that the following be observed:

• the explicit or implicit agreement of both parties (employer and employee);
• the prohibition on discrimination (set out in the Agreement on the Free Movement of Persons between Switzerland and the EU);
• any applicable collective labour agreement and cantonal legislation;
• any other rule intended to protect the employee from arbitrary decisions by the employer.

Payment arrangements

Beyond the choice of payment currency, there is also the question of how the salary is paid. Article 323b(1) of the Swiss Code of Obligations provides that payment must be made in cash, at the workplace and during working hours; in practice, however, this is generally no longer the case today, since bank transfer has become the norm.

This method is permitted provided the employee gives their consent. By giving the employer the details of the bank account of their choice, the employee is deemed to give tacit consent to payment by bank transfer.

Obligations of the parties

Constraints on international transfers

Unless otherwise agreed, several obligations fall on the employer when it agrees to make a payment by bank transfer involving conversion of its currency (Swiss francs) into the currency specified by the employee:

• Interbank transfer fees. Whether the transfer is international or not, the costs of paying the salary by bank transfer fall on the employer;

• Currency conversion fees. Although most banks offer multi-currency accounts and currency conversion, hefty fees are often added on top of the exchange rate;

• Employee access to their salary. The employer is responsible for ensuring the employee receives their salary before the end of the month. This deadline is not only morally preferable, but also customary and sometimes even mandatory.

Good to know: Any delay and/or additional fees attributable to the employee’s bank generally cannot be charged to the employer.

Constraints on domestic transfers

Conversely, opening a Swiss bank account can be problematic for the employee: time costs, administrative costs, a minimum deposit to be paid… 

For this reason, it is generally accepted that the employer cannot require the employee to open an account in the national currency on Swiss territory. Indeed, given its unilateral nature, resorting to compulsion would call into question the principle of mutual agreement between the two parties.

Faced with this deadlock, and in order to avoid any inconvenience, solutions exist to bring the two parties together and create common ground conducive to a smoother working relationship.

The b-sharpe solution

Concept and how it works

Instead of a bank account, the employee can express their tacit agreement to receive payment from their employer by providing the account details of an external service provider. Once the salary payment has been received into this account, it can then be forwarded to the employee. This arrangement remains in line with the Article 323b(1) mentioned above.

This alternative is what the b-sharpe concept is based on: after registering on the online platform, the employee receives a document showing their client code as well as the information the employer needs to make the transfers.

This account works in two simple steps:

1. The funds are automatically converted into the currency designated by the customer. This is done in real time at the prevailing exchange rate, with a reduced margin compared with standard bank fees;

2. The funds are paid into the customer’s bank account within 24 hours, or on the next business day following receipt. Here, there is no conversion issue, since this has already been carried out beforehand.

It is as a regulated financial intermediary that b-sharpe is authorised to carry out this fast and cost-effective transfer between the employer’s salary payment and its receipt in the employee’s bank account.

Benefits for both parties

The solution offered by b-sharpe spares the employee from having to open a bank account in Switzerland. The simplicity of opening this intermediary account contrasts with the administrative and financial burden involved in opening an account with a bank on Swiss territory.

On the employer’s side, two objections can justify refusing to pay the salary into an external service provider’s account:

• the existence of a clear contractual basis;
• proof of a tangible disadvantage for the employer or the employee.

In fact, implementing the b-sharpe solution actually reduces the economic burden on the employer. So unless its accounting process is adversely affected by the introduction of such a procedure, the company cannot use this last point to reject the employee’s request.

Please note: Moreover, when the accounting software used by the employer is provided by their accounting firm (as is often the case in small businesses), the company is not affected by the change of procedure and therefore has no reason to reject the employee’s request.

The choice of method for paying an employee’s salary in a foreign currency should be guided by a thorough analysis of all the options available to the employer.

With this in mind, b-sharpe provides you with all the information about its services, its platform and the registration process.