In no country in the world today is there wage equality between women and men. What sounds shocking in the 21st century has three main reasons: women are penalized when they have children, they more often work in low-wage sectors, and they have fewer opportunities for advancement.
Switzerland, too, is struggling to close the gender pay gap. Compared with the rest of Europe, the gap here is particularly wide: on average, women earn around 18 percent less. That means they effectively work almost one-fifth of the year for free, measured against the wages men typically earn – in private companies, the gap rises to 19.5 percent. The Federal Office for Gender Equality makes it concrete: on average, women earn 1,500 Swiss francs less per month than their male colleagues. The gender pay gap is similarly high in Germany and Austria, at 18 and 18.8 percent respectively.
The gap also has consequences for the economy
This disparity is painful above all for women – but not only for them. The World Bank estimates that unequal pay costs the global economy 160 trillion US dollars every year. For comparison: global economic output this year is expected to reach around 105 trillion.
And yet, it would be possible to close the so-called gender pay gap. Pay transparency is particularly effective in uncovering pay discrimination – that is, the gap that cannot be explained by objective factors such as level of education. This is the conclusion of a study by the Organisation for Economic Co-operation and Development (OECD): «The disclosure of salaries provides employees, employers, and the public with an important tool in the fight against income inequality, since it makes not only the existence of the problem but also its scale visible,» the study states.
Swiss companies are required to carry out an analysis every five years
Some countries are already using this instrument to combat pay discrimination. They require their companies to disclose gender pay differences – and have been successful in doing so. Switzerland has also taken a step in this direction. Since 2020, companies with more than 100 employees have been required to carry out a so-called pay equity analysis every five years and have it reviewed by an independent body. Although this applies to only one percent of all companies, they employ 46 percent of Switzerland’s workforce.
To support this, the federal government offers companies a free online tool called Logib. The analysis is intended to uncover wage inequalities based on gender, and all employees must be informed of the results. Whether the latter always happens in practice, however, remains unclear.
No controls and no sanctions
It is also questionable whether this change will actually have any effect. In addition, the legislator has neither provided for monitoring of companies’ compliance with the reporting requirement nor sanctions for firms with large gender pay gaps. The law also does not specify how wide the pay differences between women and men within companies may be. Logib merely stipulates that a company must repeat the analysis in five years if the pay gap exceeds five percent. If the gap is below that threshold, the company is exempt from conducting another pay analysis in five years. It is therefore doubtful how committed companies really are to taking action against pay discrimination.
Denmark leads the way
It is evident that in other European countries, similar legal requirements have already reduced pay inequality. In the United Kingdom, for example, companies with more than 250 employees are required to publish an annual report on the gender pay gap online. Failure to do so results in sanctions. The law has had an impact: since its introduction, the gender pay gap in the UK has fallen by three percentage points, though it still stands at around 19 percent.
Denmark has gone further, having introduced reporting requirements for companies as early as 2006. With success: women there now earn on average 11 percent less than men, compared with around 20 percent in 2006. In Denmark, even companies with as few as 35 employees are obliged to ensure transparency, meaning small and medium-sized enterprises are also included. They must also inform their staff about the results of the pay analyses.
The results should be made public
In Switzerland, the regulation is still so new that its impact can hardly be measured. However, progress is likely to be slow if companies only have to report every five years and face no consequences. It would also be important for the results of the pay analyses to be made public. This would help raise awareness – both in politics and among those looking for a fair employer. Management, too, would come under pressure to address the issue if pay discrimination were exposed: first, because of the risk of reputational damage, and second, because companies want – and need – to remain attractive employers for their current staff as well as for future applicants.
The latter is particularly important in times of skilled labor shortages. «Companies facing a shortage of skilled workers are under greater pressure to ensure equal employment conditions for women – especially in the IT sector,» says entrepreneur and headhunter Esther-Mirjam de Boer. Swiss companies need to recognize: «If equality truly works in their organizations, they will have better chances in the dried-up labor market.»
Majority of Swiss people support pay transparency
In most industries, however, pay transparency remains taboo. Only one-third of Swiss companies are willing to make their employees salaries public, according to a Jobcloud study from last year. Among the general population, however, the issue is well received: according to a 2019 survey by the online portal Statista, 57 percent of Swiss people are in favor of pay transparency.
It is still difficult to measure how much legally mandated pay transparency actually helps reduce the gender pay gap. But initial studies show that such regulations are particularly effective when they are monitored, when companies face sanctions for non-compliance, or when the measures receive strong political visibility. If non-compliance has no consequences for companies, however, the laws tend to be ineffective. Moreover, the results of pay analyses should be published prominently. According to OECD experts, the power of «naming and shaming»– or indeed «naming and praising» exemplary companies should not be underestimated.
For transparency: This text was first published on June 24, 2025.
Samantha Taylor
Emelie Metscher
