The USS Warning Signal Also Matters for Swiss SMEs

Wage disparities are once again at the centre of the Swiss economic debate. In its 2026 report on income distribution, the Swiss Trade Union Federation (USS) states that low and middle incomes have lost ground since 2016, whilst the highest earners have seen a significant increase in their earnings. This finding is politically charged, but it also touches on a very practical issue for businesses: how to set justifiable, consistent and transparent wages against a backdrop of pressure on purchasing power?

For SMEs, the issue is not merely a matter of a national debate between trade unions, employers and the cantons. An unclear pay policy can hamper recruitment, fuel internal tensions and expose the company to disputes, particularly when pay differences are not based on objective criteria. The SGB’s criticism therefore serves as a reminder: pay is not just a cost; it is also a management signal.

Purchasing power is diverging between the middle and upper echelons

According to the USS, real wages for the middle class stagnated between 2016 and 2026. Real wages refer to wages adjusted for inflation: they measure what income can actually buy. The trade union organisation contrasts this trend with the period from 2006 to 2016, during which real wages had risen by 0.9 per cent per year, despite the financial crisis, according to figures reported by watson.ch based on ATS data.

The trade union also highlights a disconnect with productivity. According to its analysis, productivity has risen by around 1 per cent per year in recent years, without this increase being fully reflected in wages. In the USS’s view, a larger share of the value created has benefited employers and shareholders, notably through higher profit margins and dividend payments.

The contrast is particularly stark at the top of the pay scale: wages for the top 1 per cent of employees have risen by more than 16 per cent since 2016, according to the USS. At the same time, the organisation condemns situations where employees have sometimes not even received compensation for the rise in the cost of living. This is why it is calling for automatic compensation for the rise in the cost of living to once again become the norm in wage negotiations.

For a company, this demand raises a practical question: should salaries be indexed automatically, adjusted on a case-by-case basis, or should targeted increases be prioritised? There is no single answer. But in a labour market where employees are increasingly comparing the terms on offer, the lack of a clear method quickly becomes a problem. An SME that fails to explain its pay decisions leaves the field open to perceptions: a sense of injustice, suspicions of favouritism or frustration during annual appraisals.

Women and men: two figures, two interpretations of the same unease

The gender dimension lies at the heart of the debate. The USS states that women earn on average 2,000 francs less per month than men. It adds that one in two women earns less than 5,000 francs per month, whilst half of men earn less than 7,000 francs. According to Daniel Lampart, co-head of the USS secretariat and chief economist, this difference can be explained in particular by lower employment rates – as women still shoulder a significant share of unpaid work – but also by lower wages in professions predominantly carried out by women. According to comments reported by watson.ch, around 500 francs remain unexplained, and part of this is directly linked to discrimination.

Official federal figures provide another measure, which focuses more specifically on pay equality in the strict sense. The Federal Office for Gender Equality states that women earn on average 1,364 francs less per month than men, representing a pay gap of 16.2 per cent. Nearly half of this difference can be explained by factors such as education or economic sector; the remainder remains unexplained and may indicate pay discrimination.

These figures do not necessarily contradict one another: they do not always measure the same scope. An overall income gap may take into account part-time work, career breaks, sectors of activity and the division of responsibilities. An analysis of pay equality, on the other hand, seeks to compare people in comparable situations, whilst controlling for certain objective factors. For an employer, this distinction is essential. It is not enough simply to note that two roles are different; one must be able to explain why they are paid differently.

The so-called ‘unexplained’ pay gap must be taken seriously. According to figures cited by Travail.Suisse, based on data from the Federal Statistical Office, the proportion of unexplained pay inequalities rose from 47.8 per cent in 2020 to 48.2 per cent in 2022. The increase is small, but it shows that the issue is not going away over time. Within a company, an unexplained difference is not automatically unlawful in every specific situation; however, it does indicate that the criteria used must be documented and checked to ensure they are sound.

The 100-employee threshold does not protect small organisations

The Swiss legal framework is clear in principle. Equal pay for women and men has been enshrined in the Federal Constitution since 1981: men and women are entitled to equal pay for work of equal value. The Federal Act on Gender Equality, which came into force on 1 July 1996, prohibits direct and indirect discrimination on the grounds of sex in employment relationships, including in relation to pay.

Since 1 July 2020, companies with at least 100 employees have been required to carry out a pay equality analysis every four years and have it verified by an independent body. The first analyses were due to be completed by the end of June 2021. On 7 March 2025, the Federal Council took note of a report from the Federal Office of Justice on the interim review of the implementation of these provisions.

Many SMEs do not meet this threshold and are therefore not subject to this formal obligation to carry out periodic analyses. This point must not be misunderstood. The absence of an audit requirement does not mean complete freedom. The principle of equal pay also applies to small organisations. A company must be able to justify any differences on the basis of objective factors: experience relevant to the post, qualifications, responsibilities, job requirements, documented performance or specific constraints.

In practice, risks often arise in grey areas: individually negotiated pay without a framework, promotions granted without written criteria, variable bonuses awarded on the basis of assessments that are difficult to trace, or differences inherited from past recruitment practices. These mechanisms are not necessarily problematic in themselves. They become so when the company is no longer able to explain why two employees in comparable roles are not paid comparably.

The pay scale becomes a management tool, not an administrative luxury

Faced with pressure on wages, an SME can take action without necessarily setting up a bureaucratic system. The first step is to clarify job roles. Two identical job titles may cover different responsibilities; conversely, two distinct job titles may conceal work of comparable value. Describing the tasks, the skills required, the level of autonomy and the responsibilities helps to lay a more solid foundation.

The second key factor is internal consistency. A pay scale does not need to be rigid to be useful. It can define pay bands by job category, with clear criteria for progression: experience, mastery of the role, relevant training, taking on responsibility, and contribution to results. The aim is not to prevent any differentiation, but to ensure that it is justifiable.

The third point concerns documentation. When a pay rise, bonus or promotion is decided upon, keeping a record of the reasoning protects the company and facilitates dialogue with the employee. It also helps managers avoid decisions taken under pressure – for example, to retain someone in the short term – which then set a precedent that is difficult to manage.

Finally, salary confidentiality does not exempt companies from the need for consistency. In Switzerland, salary transparency remains limited, particularly in SMEs, and a culture of secrecy remains strong. But the discussion on remuneration is progressing. A company that relies solely on a lack of transparency is taking a risk: if pay gaps come to light, it will have to address the substance of the issue, not merely point out that salaries are a sensitive matter.

Health insurance contributions, taxes and wages: the payslip does not tell the whole story

The USS report does not focus solely on wages. It also includes health insurance premiums and taxes by income bracket. According to the trade union, rising premiums are placing a particular burden on low- and middle-income households, whilst proposals for cantonal tax cuts are on the rise. The USS believes that the cantons should significantly reduce health insurance premiums rather than grant further tax cuts.

For employers, this is an important issue, even though it is largely beyond their control. Employees’ perception of their pay depends on their disposable income, not just their contractual gross pay. When fixed costs rise, nominal stagnation is perceived as a pay cut. This can fuel calls for adjustments, particularly for those on modest wages or working part-time.

In this context, it is in companies’ interests to prepare for pay negotiations using reliable internal data. Who has received a pay rise, according to what criteria, within what range, and with what effect on overall fairness? The answers must be tailored to each company and verified on a case-by-case basis, particularly where collective agreements, industry practices or cantonal regulations come into play.

The debate launched by the USS highlights a simple reality: pay gaps are no longer a peripheral issue. They intersect with purchasing power, gender equality, employer attractiveness and internal governance. For Swiss SMEs, the best defence is not to promise perfect equality, but to develop a pay policy that is transparent, verifiable and capable of withstanding the questions that are bound to arise.