Undeclared employment at home: risks incurred
Hiring a cleaning lady, nanny, or gardener without formalizing the employment relationship may seem trivial. In Switzerland, however, this practice is illegalβeven if the work is occasional, low-paid, or paid in cash. The consequences can be serious for individuals, who are often unaware that they are legally considered employers.
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As an employerβeven a private oneβyou are legally required to declare your employee to the AVS compensation fund, pay social security contributions (AVS/AI/APG/AC), and provide accident insurance. Depending on income, affiliation with an occupational pension fund may also be required.
If you fail to do so, you risk back payments of contributions for up to five years, plus interest. Administrative fines may also be imposed. This can lead to significant financial claims, even if the omission was unintentional.
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The Federal Accident Insurance Act (LAA) protects employees even if the employer failed to insure them (Art. 95 LAA). This means that if the employee is injured during their work (a fall, injury, poisoning, etc.), they will still be covered.
However, be careful: the insurer can then demand reimbursement of the benefits paid from the employer (Art. 66 para. 1 LAA). The employer remains financially liable.
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Failure to declare the employment does not strip the employee of their rights. They can take the case to the labor court to claim unpaid wages, unused vacation days, or challenge an unfair dismissal.
Moreover, the lack of a written contract or time sheet makes the employerβs defense much more difficult. In a dispute, the employee's wordβsupported by written exchanges or witness statementsβmay be enough to establish the facts.
Such proceedings can also result in a criminal complaint for undeclared work. If the employee is a foreign national without a work permit, a violation of immigration law may also be found.
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The good news: as long as the situation has not been reported, it is often possible to regularize it voluntarily. A spontaneous declaration to the compensation fund can help limit the consequences, especially criminal ones. This kind of initiative is generally viewed more favorably than waiting for an inspection or legal conflict.
When it comes to domestic employment, good faith alone wonβt protect you. Complying with legal obligations is the only way to avoid serious consequences.
Written by Me Renato CAJAS