Are you running a Swiss business that hires freelancers? You could be unwittingly operating in a legal gray area that Swiss authorities are scrutinizing. Find out how to prevent falling into that trap.

Introduction
Pseudo-independence refers to a situation where a worker is formally classified as self-employed but, in reality, operates under conditions similar to those of an employee. This misclassification can lead to significant legal and financial consequences for both the worker and the employer.

Legal Definition and Criteria
In Switzerland, the authorities, particularly the Swiss social security system (AHV/IV), assess whether a worker is genuinely self-employed. The main indicators of pseudo-independence include:

• Lack of Entrepreneurial Freedom: A self-employed person should have the ability to freely determine their working methods, pricing, and client base.
• Integration into the Employer’s Business: If the worker operates within the employer’s organizational structure, follows instructions, and lacks decision-making autonomy, they are likely an employee.
• Exclusivity: A worker who primarily works for one client, rather than multiple clients, may be considered dependent.
• Fixed Working Hours and Workplace: A genuine freelancer should have flexibility in choosing their work schedule and location.
• No Own Employees: A self-employed individual typically hires their own personnel rather than working alone for one main client.
  
  

Legal Consequences
If an individual is deemed to be in pseudo-independence, both the employer and worker face serious consequences:

• Social Security Contributions: Employers must retroactively pay social security contributions (AHV, IV, ALV, and pension funds) for the misclassified worker.
• Tax Penalties: Tax authorities may reclassify income, leading to additional tax payments and fines.
• Employment Rights: The worker may be entitled to benefits such as paid vacation, sick leave, and protection against dismissal.
• Legal Proceedings: Swiss authorities, including the compensation funds regularly conduct checks and may impose heavy penalties for violations.
  
  

Common Industries Affected
Pseudo-independence is particularly prevalent in industries such as IT, media, consulting, construction, and delivery services. Many companies seek to reduce labor costs by hiring freelancers instead of employees, often crossing legal boundaries unintentionally.

Preventing Pseudo-Independence
To avoid legal risks, companies and freelancers should:

• Ensure that the freelancer works for multiple clients.
• Draft contracts that emphasize independence and lack of subordination.
• Allow freelancers control over their work schedule and methods.
• Conduct a status assessment with the Swiss compensation funds if uncertainty exists.

Conclusion
Pseudo-independence remains a significant issue in Swiss labor law, affecting workers’ rights and employer responsibilities. Companies must carefully evaluate their working relationships to avoid legal repercussions, while workers should ensure they operate with sufficient independence to maintain their self-employed status.