The Swiss labour market is known for its precision, transparency, and regulatory clarity. Recruitment companies that wish to operate in this environment face one fundamental requirement: they must obtain a Seco License.

This permit, issued by the State Secretariat for Economic Affairs (SECO), is the legal foundation that allows agencies to provide staffing and job placement services. But the license is not just an entry ticket—it comes with strict obligations and restrictions. Understanding these limits is essential for any recruitment firm planning to establish itself in Switzerland.

What is the Seco License?

The Seco License authorises recruitment companies to engage in employment placement and labour leasing. It ensures compliance with the Swiss Employment Services Act (AVG/LSE) and related regulations. For agencies, holding this license means access to the Swiss market under transparent rules; for workers and clients, it guarantees protection of wages, contracts, and social contributions.

Why Are Restrictions So Important?

Switzerland’s labour market is small, competitive, and tightly monitored. Without restrictions, agencies could exploit vulnerable workers, encourage wage dumping, or undermine the quality of employment. The Seco License is therefore tied to precise conditions that safeguard the balance between flexibility for employers and fairness for employees.

Which Restrictions Apply to Recruitment Companies?

Recruitment firms with a Seco License face a number of key restrictions:

• Legal Form: Agencies must operate as a Swiss legal entity, most commonly a GmbH or AG, registered in the commercial register. Informal or unregistered operations are not allowed.
• Financial Requirements: Agencies must demonstrate sufficient liquidity. They are obliged to cover wages, insurance, and social contributions even if a client defaults. Authorities often require proof of reserves or a bank guarantee.
• Territorial Scope: Domestic agencies can work only within Switzerland. For cross-border leasing, a separate international license is required. Without it, agencies cannot legally bring workers from abroad.
• Office Presence: A permanent office in Switzerland is mandatory. Virtual addresses or “letterbox” companies do not satisfy SECO requirements.
• Management Qualifications: The directors of the agency must demonstrate professional competence and a clean compliance record. Convictions or past violations can result in denial of the license.
• Sectoral Rules: In regulated sectors such as healthcare, construction, or financial services, additional restrictions apply. Agencies must respect collective labour agreements (CLAs) and sector-specific wage minimums.

Restrictions on Labour Leasing

Labour leasing—where the agency employs staff and assigns them to clients—is particularly sensitive in Switzerland. Restrictions here are detailed and strictly enforced:

• Leasing cannot occur without a valid license; even occasional leasing is illegal.
• Workers must receive contracts that meet Swiss standards, regardless of their nationality.
• Agencies cannot lease workers to companies that are themselves unlicensed or non-compliant.
• Maximum leasing durations may apply, and repeated renewals are monitored to prevent abuse.

Restrictions for International Recruitment

For agencies wanting to import labour from neighbouring countries, the Seco License is only part of the puzzle. A specific international leasing permit is required. Restrictions include:

• Proof that cross-border workers receive equal pay and conditions as Swiss staff.
• Compliance with bilateral agreements between Switzerland and the EU/EFTA states.
• Stricter financial requirements, as authorities want guarantees that workers from abroad will not be left unprotected.

Agencies that breach these rules risk losing their license altogether.

What Happens if Agencies Ignore Restrictions?

Violating the conditions tied to the Seco License can lead to:

• Heavy administrative fines
• Suspension or revocation of the license
• Permanent exclusion from the recruitment sector
• Legal claims from workers for unpaid wages or benefits
• Reputational damage that makes client acquisition almost impossible

The Swiss enforcement system is thorough. Cantonal labour offices and SECO conduct audits, review payrolls, and investigate complaints. Once an agency is found to be non-compliant, its chances of recovery are slim.

The Strategic Value of Compliance

While restrictions may seem demanding, they serve a purpose. By complying, agencies gain access to Switzerland’s highly trusted labour market. Clients prefer licensed partners because they minimise legal risk, while workers value transparent contracts and social protection. In practice, the Seco License becomes more than a regulatory burden—it is a competitive advantage.

Looking Ahead: Future Restrictions

The Swiss labour market is evolving, and so are the restrictions on recruitment companies. Remote work, digital staffing platforms, and new models of flexible employment are challenging the existing framework. SECO is expected to tighten rules around online recruitment, cross-border digital services, and financial guarantees. Agencies entering the Swiss market today should prepare not only for current restrictions but also for stricter standards tomorrow.

Conclusion

The Seco License is the gateway to Switzerland’s recruitment industry, but it comes with carefully designed restrictions. From financial guarantees to cross-border compliance, these rules are not obstacles—they are safeguards that maintain fairness, trust, and stability in the labour market. For recruitment agencies, success in Switzerland depends not only on obtaining the license but on respecting its boundaries every single day.