Blog: 02.06.25Reclassification of Freelancer as Employee in Switzerland: Legal Risks

Hiring freelancers is becoming increasingly common in Switzerland, particularly among SMEs, NGOs, and companies undergoing digital transformation. This mode of collaboration offers valuable flexibility, allowing organisations to strengthen their teams quickly and without long-term commitment.

However, this flexibility comes with risks. If the working relationship is poorly structured, authorities may interpret it not as an independent mandate, but as a concealed employment contract. The consequence? The reclassification of a freelancer as an employee, with serious legal, fiscal and social implications.

In this article, we explain how to avoid this pitfall by identifying key risk factors and adopting the right contractual and operational practices.

Contrary to popular belief, it is not the type of contract that determines the nature of the working relationship, but the actual conditions under which the work is performed. This is a point regularly emphasised by the SECO (State Secretariat for Economic Affairs).

Even if a contractor is formally registered as self-employed, authorities can conclude that a subordinate relationship exists and therefore reclassify the collaboration as an employment relationship, if certain indicators are present.

According to SECO, an individual is considered self-employed if they:

• Work on their own account
• Bear the economic risk of their activity
• Organise their work independently
• Have multiple clients and their own business structure (e.g. sole proprietorship, GmbH)
• Are registered with the social security authorities as self-employed

Conversely, the following signs may suggest an employment relationship:

• Integration into the company’s internal organisation
• Following detailed instructions
• Working on the company’s premises
• Fixed working hours imposed
• Use of company-provided equipment

… these are all strong indicators of subordination, and therefore of an employment-like situation.

Subordination refers to a hierarchical relationship in which the company controls how the contractor performs the work. It is the decisive factor used by the authorities when reclassifying a role as employment.

This type of relationship is typically identified when:

• The company imposes a workplace and/or fixed hours
• The contractor receives frequent or detailed instructions
• The contractor reports to a line manager
• Equipment is provided (computer, access badge, internal software)
• The contractor is treated like an internal employee (email address, intranet access, participation in team meetings)

This subordination can develop gradually and informally, but it remains the primary indicator used to justify the reclassification of a working relationship.

Let’s consider a common scenario in the tech industry.

Initial situation:

A company hires a freelance web developer for a six-month project. A service contract is signed, the freelancer works from home and invoices daily rates.

Over time:

• The developer is present daily at the company’s premises
• They participate in internal meetings
• They follow a schedule set by the technical lead
• They use a company-provided laptop
• They work exclusively for this one client over an extended period

At this stage, the working relationship mirrors that of an employee. In the event of an audit, the authorities could decide to reclassify the collaboration as an employment contract, with all the consequences this entails.

Financial consequences:

• Retroactive payment of social security contributions (AVS, LPP, AC – both employer and employee shares)
• Back payments over several years, with interest
• Potential fines in cases of undeclared employment

Legal consequences:

• Risk of litigation (unpaid leave, severance, notice periods)
• Right to protection against dismissal
• Claim for seniority and employment benefits

Reputational consequences:

• Loss of trust from clients and partners
• Damage to corporate image, especially in regulated or sensitive sectors

These consequences can unfold over years and heavily impact a company’s operations and stability.

To secure your freelance collaborations, here are key practices to adopt:

1. Draft a clear, structured service contract

The contract should be carefully worded and aligned with self-employed status. Avoid any terms typically associated with employment (e.g. position, salary, reporting line, working hours) and instead emphasise:

• Defined deliverables and objectives
• A billing structure (per task, per hour, per day)
• Working methods chosen independently by the contractor

2. Preserve the freelancer’s autonomy

A true freelancer must retain full organisational independence. This means:

• Not imposing a specific workplace or schedule
• Not providing tools or IT systems
• Not integrating them into internal processes (no company email, team calendar or HR procedures)

3. Encourage multi-client activity

Contractors working with multiple clients are clearly identifiable as independent, which greatly reduces the legal risk of reclassification.

4. Verify the contractor’s legal and social status

Before starting any collaboration, ensure the freelancer:

• Is registered as self-employed with AVS
• Can issue valid invoices
• Operates under a recognised legal form (e.g. sole trader, GmbH)

5. Avoid long-term exclusive dependencies

The longer a mission lasts, the more the contractor risks becoming economically dependent on your company. Prolonged exclusivity may lead to the reclassification of a freelancer as an employee under Swiss law.

A well-drafted contract is essential, but insufficient. It is the real-world execution of the collaboration that determines whether a relationship qualifies as freelance work or constitutes an employment relationship. The one line that must not be crossed? Subordination.

In today’s increasingly hybrid working environment, understanding and managing this legal nuance is key to protecting both your organisation and your collaborators. It is far better to anticipate and properly structure the relationship than to deal with a reclassification after the fact.

Our experts are here to help you clarify your practices, secure your contracts, and stay ahead of regulatory developments.