Determining Salaries

 

Determining Salaries

Etymologically, the salary comes from the word “salt”. Indeed, before the introduction of the currency, salt was used to pay for work or service provided. Salt could be exchanged for goods and services.

Today, no one is paid in amounts of salt anymore, but the issue of wage negotiations remains important. During the hiring process, a candidate goes through many phases before arriving at the time of negotiating salary and other working conditions. It is therefore a matter of agreeing on a given remuneration between the two contracting parties, namely the employee and the employer.

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In Switzerland, at the federal level, no minimum income is set by the government. It is the negotiations initiated at the time of the engagement between the employer and the employee that determine the level, terms, and composition of the salary. Obviously, certain key elements are taken into account, in particular, the type of contract to be signed (CDI, CDD, interim, or others) and collective agreements that provide for mandatory minimum wages for certain socio-professional categories.

The salary level depends on the supply and demand for certain skills in the labor market. This fluctuates over time depending on the needs of the economy. This means that companies, depending on the sectors and economic cycles, bullish or bearish, will need more or fewer skills according to their forward-looking human resources management.

As in any other competitive market, the more demand there is for a good, the higher its price will be negotiated. The same is true for the salary which will enhance the skills more or less in demand and more or less available on the labor market.

At the cantonal level, there are exceptions. Indeed, the canton of Geneva, for example, sets a minimum wage for domestic workers unqualified for CHF 3'756.- per month gross (CHF 19.25 gross per hour) for the period from 1^st January 2016 to 31 December 2017.

Years of experience are valued from 4 years of experience, even if the employee has no qualifications. By qualification, we mean a training certificate, in this case, a CFC (federal certificate of competence) for vocational training.

The canton of Neuchâtel also applies a salary, but for all professions, to fight against poverty, to guarantee the "working poor", workers who cannot meet their current expenses (rent, health insurance, food, care, clothing, etc.) while working full time. The Neuchâtel population was called upon to vote on the introduction of a minimum wage which amounts to CHF 19.75 gross per hour for 2017.

The wage levels are a priori adapted according to the level of inflation (generalized rise in prices in an economy) in the canton which fluctuates over time, although the level of inflation has been very low, or even zero in Switzerland since. these last years. It should be noted that health insurance is not included in the consumption basket to calculate inflation.

For more on inflation watch video animation of the 1^st paragraph of our article.

Meaning of collective agreements and the standard employment contract

Trade unions have an important role, in particular when negotiating minimum wage agreements with employers. Collective labor agreements ensue from these negotiations which determine the clauses of termination of the contract by one or the other party, the rights and obligations of the contracting parties, but also wages and allowances, leaves, prescriptions concerning working time and protection against dismissal, among other elements.

In the absence of a collective labor agreement, standard employment contracts are put in place by the Confederation, the canton, the municipality (city or town) to determine the minimum wages for certain professional activities.

Key factors in determining wages

Certain key factors can influence the level of wages. These include the level of education, professional qualifications, continuing education, professional experience, geographical mobility, proficiency in foreign languages, age, and gender, although these two latter elements are considered discriminatory factors, as is nationality or origin.

Other elements can possibly influence wages, in particular, the branch or professional activity, the geographical area where the work is carried out, the economic situation of the country as well as the evolution of the labor market. Account must also be taken of the responsibilities and requirements of the position and the remuneration system put in place by the employer (commission, bonuses, bonuses, profit sharing, benefits in kind, etc.).

Salary is one of the factors of attractiveness for a position but it is not the only one, because it is necessary to take into account the social advantages, vacations, possibilities of advancement, among others.

To have a real and realistic assessment of salaries, there are a good number of tools available online which allow you to consult the salaries practiced in the different branches of activity and to make a comparison according to several criteria. To do this, it is possible to use salary calculators to get an idea of ​​salary levels in order to propose a salary range with which to negotiate with your future employer.

There are salary calculators at the cantonal, federal level or even offered by unions. This is the Confederation one.

To find out about agreements, it is sufficient to contact professional organizations and unions, which provide workers with all the information required on the agreements reached relating to minimum wages.

Fairpay, salary calculator

One of the tools to use to have a real salary evaluation is the calculator offered by the Swiss trade union called Fairpay and which is accessible from its platform. Such a tool was put in place with the aim of combating wage dumping and promoting transparency. The information available comes from a survey on the composition of wages which was recently undertaken by the Federal Statistical Office. The data collected relate to wages in 7 cantons and cover 50 branches of economic activity.

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