Employer of Record in Liechtenstein

General Information

• Currency: Swiss Franc (CHF)
• Employer Taxes:
• Payroll Frequency: Monthly
• Employee Costs:
• Capital: Vaduz
• Fiscal Year: 1 January – 31 December

Main Aspects of the Labour Code

Minimum Wage

General: Liechtenstein does not have a statutory minimum wage. Instead, wages are generally determined through collective bargaining agreements and individual contracts. However, the country has a high standard of living, and salaries tend to be relatively high compared to other regions.

Payroll

Payroll Cycle: In Liechtenstein, the payroll cycle typically involves the following key steps:

1. Payroll Period: Most companies operate on a monthly payroll cycle. Employees usually receive their salaries at the end of the month.
2. Time Tracking: Employers track employee hours worked, including regular hours, overtime, and any leave taken.
3. Calculating Gross Salary: The gross salary is calculated based on employment contracts, which may include bonuses, commissions, or allowances.
4. Deductions: Various deductions are made from the gross salary, including:
   • Social security contributions
   • Pension contributions
   • Health insurance
   • Income tax withholdings
5. Net Salary Calculation: After deductions, the net salary is computed.
6. Payment: Employers process payments, typically via bank transfer, ensuring employees receive their net salary on the scheduled payday.
7. Reporting and Compliance: Employers must comply with local labor laws and regulations, including timely submission of payroll taxes and social security contributions.
8. Documentation: Payroll records should be maintained for auditing purposes and to comply with legal requirements.

It’s important for employers in Liechtenstein to stay updated on any changes in labor laws and tax regulations that may affect the payroll process.

13th Salary

In Liechtenstein, the concept of a 13th salary (or “13th month pay”) is not mandated by law, but it is a common practice among employers. Here’s how it generally works:

1. Voluntary Benefit: The 13th salary is usually offered as a voluntary benefit, often included in employment contracts or collective agreements.
2. Payment Timing: It is typically paid at the end of the year, often in December, providing employees with additional financial support during the holiday season.
3. Calculation: The amount is usually equivalent to one month’s salary, but it can vary based on company policy or employee agreements.
4. Tax and Contributions: The 13th salary is subject to income tax and social security contributions, similar to regular salary payments.
5. Pro-Rated Payments: If an employee does not work the full year (due to starting or leaving mid-year), the 13th salary may be pro-rated based on the months worked.

While not required, many employers in Liechtenstein choose to provide this benefit to enhance employee satisfaction and loyalty.

Working Hours

In Liechtenstein, the regulations regarding working hours are governed by the Labor Law. Here are the key points regarding working hours:

1. Standard Working Hours: The typical full-time workweek is around 40 hours, usually structured as 8 hours per day, Monday through Friday.
2. Flexible Work Arrangements: Many employers offer flexible working hours or part-time options, which are becoming increasingly common.
3. Overtime: Any work beyond the standard 40 hours per week is considered overtime. Overtime must be compensated, typically at a higher pay rate (usually 125% or more, depending on agreements).
4. Rest Periods: Employees are entitled to breaks during their working hours. For a workday longer than 6 hours, a break of at least 30 minutes is mandatory.
5. Daily and Weekly Rest: Employees must have at least 11 consecutive hours of rest between working days. Additionally, they should receive at least one full day off per week.
6. Special Regulations: Certain sectors, like healthcare or hospitality, may have specific regulations regarding working hours that can differ from the standard.

Employers and employees are encouraged to adhere to these regulations to ensure fair working conditions and employee well-being.

Leave

Annual Leave (Vacation):

In Liechtenstein, annual leave (vacation) regulations are governed by the Labor Law. Here are the key points regarding annual leave:

1. Entitlement: Employees are entitled to a minimum of four weeks (20 working days) of paid annual leave per year, based on a full-time work schedule.
2. Pro-Rated Leave: For part-time employees, annual leave is pro-rated according to the number of hours worked.
3. Accrual: Employees generally accrue their annual leave throughout the year, and it is advisable to take the leave within the same calendar year.
4. Carrying Over Leave: If annual leave is not taken within the year, it may be carried over to the next year, but there may be a limit on how long it can be carried over (often up to two years).
5. Notice Period: Employees are usually required to give notice to their employer before taking leave, and employers may set specific periods during which leave can or cannot be taken.
6. Payment During Leave: Employees receive their regular salary while on annual leave.
7. Special Circumstances: Additional leave entitlements may exist for specific situations, such as parental leave or bereavement leave, which are governed by separate regulations.

Employers and employees should ensure they understand their rights and obligations regarding annual leave to promote a healthy work-life balance.

Public Holidays

There are 13 public holidays.

Sick Days

In Liechtenstein, regulations regarding sick leave are designed to protect employees while ensuring they have access to necessary medical care. Here are the key points regarding sick days:

1. Entitlement: Employees are entitled to sick leave if they are unable to work due to illness or injury.
2. Notification: Employees must inform their employer of their illness as soon as possible, typically on the first day of absence.
3. Medical Certificate: A medical certificate may be required if the sick leave extends beyond a specific duration (usually three days). Employers may specify their requirements regarding documentation.
4. Sick Pay: During sick leave, employees are entitled to continued pay, which can vary based on the length of service:
   • First 3 Days: Generally, no pay is required, although some employers may offer sick pay from day one.
   • From Day 4 Onwards: Employees may receive up to 100% of their salary for a limited period, often up to 13 weeks, depending on company policy or collective agreements.
5. Long-Term Illness: For extended periods of illness, there may be provisions for additional benefits through social security.
6. Job Protection: Employees on sick leave are generally protected from dismissal for the duration of their illness.

Employers and employees should familiarize themselves with their rights and obligations regarding sick leave to ensure proper adherence to labor laws.

Maternity Leave

In Liechtenstein, maternity leave is governed by specific regulations designed to protect the rights of pregnant employees. Here are the key points regarding maternity leave:

1. Duration: Maternity leave typically lasts for 16 weeks, divided into:
   • 8 weeks before the expected delivery date
   • 8 weeks after the delivery
2. Leave Commencement: The leave can start up to 8 weeks before the expected due date, but it is mandatory to take the leave after childbirth.
3. Maternity Pay: During maternity leave, mothers are entitled to receive maternity benefits, which usually amount to 80% of their salary, paid through the social security system.
4. Job Protection: Employees are protected from dismissal during pregnancy and maternity leave, ensuring they can return to their position or an equivalent role after their leave ends.
5. Additional Leave: After the standard maternity leave, parents may be entitled to parental leave or childcare leave, allowing for additional time off to care for the child.
6. Notification Requirements: Employees are typically required to inform their employer about their pregnancy and intended leave in a timely manner.

These provisions aim to support new mothers while ensuring their rights and job security. It’s essential for both employers and employees to understand these regulations to comply with labor laws.

Paternity Leave

In Liechtenstein, paternity leave regulations provide important support for new fathers. Here are the key points regarding paternity leave:

1. Duration: Fathers are entitled to up to two weeks of paid paternity leave, which can be taken within the first few months following the birth of their child.
2. Payment: Paternity leave is usually compensated at a rate of 80% of the employee’s salary, funded through the social security system.
3. Job Protection: Like maternity leave, paternity leave offers job protection, ensuring that employees can return to their position or a similar role after their leave.
4. Notification: Employees should inform their employer about their intention to take paternity leave, typically providing notice a few weeks in advance.
5. Additional Parental Leave: After paternity leave, fathers may also be eligible for parental leave, which allows for additional time off to care for the child.

These provisions are designed to support fathers in their role and promote family well-being. It’s important for both employers and employees to understand their rights and obligations regarding paternity leave.

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