Still little known in Switzerland, payroll employment nevertheless offers a wide range of advantages, notably for consultants without status, freelancers and business founders. Aligned with new ways of working, this model is set to grow, as Hervé Grosfilley, Managing Director of MITC, a company specialised in this activity in Switzerland for more than 20 years, explains.

Monde Economique : What exactly is payroll employment?

Hervé Grosfilley: First of all, it should be noted that this system is aimed at many professionals, including business founders or buyers, recent graduates, consultants, but also executives and employees looking for a job, as well as early retirees.
Payroll employment can be defined as a three-way relationship between a company such as ours, a so-called “hosted” employee, and the company where that “hosted” employee works. Let us take a concrete example. A consultant is approached by a company with which he has already worked, or which he has approached himself. The company entrusts him with an assignment. The consultant can accept it and handle all the administrative tasks that follow himself, or he can turn to a payroll employment company that will do so on his behalf. The consultant is then hired for a fixed period by MITC, for example, which acts as an intermediary. MITC draws up the service contract with the client company by employing the consultant as an employee.

Monde Economique : What is the advantage for the “hosted” employee?

Hervé Grosfilley: The advantages are truly numerous, but the first is most likely the security of being an employee. For the duration of the employment contract with the payroll company, the employee benefits from a salary paid on time, payment of pension contributions, unemployment insurance, occupational and non-occupational accident insurance, as well as income protection insurance. They also, of course, are entitled to paid holidays.
At the same time, the “hosted” employee retains complete independence, since it is up to them to find clients, define the project terms and negotiate prices. The payroll company only steps in when the contract is drawn up.
For the rest, the “hosted” employee is free to organise their work as they wish, and to choose their workplace and working hours.

Monde Economique : Whether by personal lifestyle choice or out of economic necessity after being laid off, the number of employees wishing to start their own business is increasing. Can payroll employment be a solution for them? 

Hervé Grosfilley: Absolutely! It avoids the costs associated with setting up a business, as well as the administrative burden, including accounting, which is essential to the development of any company. Yet clients are taking longer and longer to pay. Today, payment terms are well beyond 30 days, which is unsustainable for a start-up or an independent professional. A payroll company can monitor clients through its accountants and thus enable the entrepreneur to stay financially afloat and focus on finding clients.
Moreover, entrepreneurship is not without risk, and if the project does not work out, the “hosted” employee will not have to liquidate their company and will be entitled to unemployment benefits while they get back on their feet.

Monde Economique : How do companies view the use of payroll employment?

Hervé Grosfilley: It is still a little-known concept, but companies are very receptive to it, especially in this health crisis context where, unfortunately, many of them may have to make redundancies. Payroll employment offers them real flexibility. Indeed, if a company is no longer able to provide its employees with full-time work, it may well be able to hire them at 50 or 60%.
Companies are also more likely to call on the services of a consultant, for example, because they do not have to hire them and do not have to bear the administrative burden. This flexibility is useful.

Monde Economique : So payroll employment is set to expand in the future?  

Hervé Grosfilley: Yes, because it matches the new ways of working seen everywhere around the world. In the United States, for example, more than 60% of active workers do not benefit from an open-ended employment contract from the company that hires them. Payroll employment can therefore be a simple and effective solution for them between contracts.

Patricia Gagnon

For more information http://www.mitc-consulting.com

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