Go Back   English Forum Switzerland > Help & tips > Employment  
Reply
 
Thread Tools Display Modes
  #1  
Old 19.10.2018, 11:36
tch tch is offline
Junior Member
 
Join Date: Jun 2018
Location: Basel Land
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
tch has no particular reputation at present
contractor salary issue (is it a fraud)

I am offered a contract for working as a contractor recently, and found a lot of problems when going through the contract details, I would give an example how they calculate the salary (it is not the real one, just as an example, so the precise percentage may not be correct, but should be more or less correct):

gross hourly rate: 36
basic hourly rate: 30
public holiday compensation: 1
13th month wage: 2

holiday compensation: 3 (only paid when taking holidays)

My questions:
1. it looks that I don't have any paid holidays, as the recruiter says that I will not get salary for the holidays, but instead I will equal amount of holiday compensation, the issue is that the compensation is deducted from my own gross salary, so in the end I am compensating my own holidays from my own salary, it looks like the recruiter pays me holidays compensation, but in fact it is myself who is paying that, as you can see, the holiday is from my own salary and is retained by the recruiter, they give this back to me when I take holiday, I am compensating myself in the end, is this normal or a fraud?
2. the same issue for the 13th monthly salary, it sounds like I have a 13th month salary, but again they put this into my gross monthly salary to help top up the gross salary to 36, so in fact again I don't get any 13th monthly salary, is this normal as well?
3. for sick leave, they say I will not be paid in the first 3 days (waiting peroid), the insurance starts paying 80% of my salary from the 3rd day on after my sickness, sound a bit ridiculous, how can they do this? is the illegal to not pay salary for sickness in the first 3 days?

These are the main concerns I have, since I need to decide if I sign the contract soon, would really appreciate if someone with contractor experience can help me.
Reply With Quote
  #2  
Old 19.10.2018, 12:21
Guest
 
Posts: n/a
Re: contractor salary issue (is it a fraud)

You're a contractor, not a full time employee
Reply With Quote
  #3  
Old 19.10.2018, 12:32
Forum Legend
 
Join Date: Jun 2008
Location: Zurich
Posts: 8,588
Groaned at 304 Times in 231 Posts
Thanked 19,668 Times in 6,856 Posts
k_and_e has a reputation beyond reputek_and_e has a reputation beyond reputek_and_e has a reputation beyond reputek_and_e has a reputation beyond reputek_and_e has a reputation beyond reputek_and_e has a reputation beyond repute
Re: contractor salary issue (is it a fraud)

Quote:
You're a contractor, not a full time employee

No. The OP is an hourly paid employee, not a salaried employee.


You can define the holiday pay and 13nd month as a part of the hourly rate. nothing wrong with that.
Reply With Quote
  #4  
Old 19.10.2018, 12:38
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 14,198
Groaned at 256 Times in 224 Posts
Thanked 21,076 Times in 8,559 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: contractor salary issue (is it a fraud)

Quote:
View Post
I am offered a contract for working as a contractor recently, and found a lot of problems when going through the contract details, I would give an example how they calculate the salary (it is not the real one, just as an example, so the precise percentage may not be correct, but should be more or less correct):

gross hourly rate: 36
basic hourly rate: 30
public holiday compensation: 1
13th month wage: 2

holiday compensation: 3 (only paid when taking holidays)

My questions:
1. it looks that I don't have any paid holidays, as the recruiter says that I will not get salary for the holidays, but instead I will equal amount of holiday compensation, the issue is that the compensation is deducted from my own gross salary, so in the end I am compensating my own holidays from my own salary, it looks like the recruiter pays me holidays compensation, but in fact it is myself who is paying that, as you can see, the holiday is from my own salary and is retained by the recruiter, they give this back to me when I take holiday, I am compensating myself in the end, is this normal or a fraud?
2. the same issue for the 13th monthly salary, it sounds like I have a 13th month salary, but again they put this into my gross monthly salary to help top up the gross salary to 36, so in fact again I don't get any 13th monthly salary, is this normal as well?
3. for sick leave, they say I will not be paid in the first 3 days (waiting peroid), the insurance starts paying 80% of my salary from the 3rd day on after my sickness, sound a bit ridiculous, how can they do this? is the illegal to not pay salary for sickness in the first 3 days?

These are the main concerns I have, since I need to decide if I sign the contract soon, would really appreciate if someone with contractor experience can help me.
It's not fraud. It's all correct. It's how contracting works.

The chain is: client pays agency, agency pays payroll/umbrella company, umbrella company pays you. Each take their cut. Sometimes the agency runs its own payroll company, but for understanding treat them as separate entities.

Client pays agency 1000. Agency pays your umbrella company/payroll company 800 (this is your fee, this is what was advertised). From the 800 the umbrella company takes an admin fee. That leaves, e.g. 750. From the 750 comes ALL the employment expenses, including all employer expenses - like certain insurances and employer social contributions.

That leaves you with a gross daily salary of, perhaps, 600.

It is perfectly normal for sick leave of the first three days to be unpaid.
__________________
Down with racism. Long live miscegenation!
Reply With Quote
The following 4 users would like to thank NotAllThere for this useful post:
  #5  
Old 19.10.2018, 14:30
tch tch is offline
Junior Member
 
Join Date: Jun 2018
Location: Basel Land
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
tch has no particular reputation at present
Re: contractor salary issue (is it a fraud)

Quote:
View Post
It's not fraud. It's all correct. It's how contracting works.

The chain is: client pays agency, agency pays payroll/umbrella company, umbrella company pays you. Each take their cut. Sometimes the agency runs its own payroll company, but for understanding treat them as separate entities.

Client pays agency 1000. Agency pays your umbrella company/payroll company 800 (this is your fee, this is what was advertised). From the 800 the umbrella company takes an admin fee. That leaves, e.g. 750. From the 750 comes ALL the employment expenses, including all employer expenses - like certain insurances and employer social contributions.

That leaves you with a gross daily salary of, perhaps, 600.

It is perfectly normal for sick leave of the first three days to be unpaid.
thanks a lot, this is very helpful. Now I know in practice, contractor doesn't have real paid holiday, everything one gets is included in the hourly rate.
Reply With Quote
  #6  
Old 19.10.2018, 17:16
Mica's Avatar
Forum Veteran
 
Join Date: Oct 2007
Location: Zurich
Posts: 928
Groaned at 1 Time in 1 Post
Thanked 1,187 Times in 526 Posts
Mica has a reputation beyond reputeMica has a reputation beyond reputeMica has a reputation beyond reputeMica has a reputation beyond reputeMica has a reputation beyond repute
Re: contractor salary issue (is it a fraud)

You can find an example of the calculation (German only, Google translate is your friend) here:
https://www.weka.ch/themen/personal/...-mit-aufpreis/

And yes a contractor does have real paid holidays. You still have the right to 4 weeks holidays, however, since you are not earning a monthly salary, the payment for holiday is folded into the hours worked.
Reply With Quote
This user would like to thank Mica for this useful post:
  #7  
Old 19.10.2018, 18:42
tch tch is offline
Junior Member
 
Join Date: Jun 2018
Location: Basel Land
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
tch has no particular reputation at present
Re: contractor salary issue (is it a fraud)

Quote:
View Post
You can find an example of the calculation (German only, Google translate is your friend) here:
https://www.weka.ch/themen/personal/...-mit-aufpreis/

And yes a contractor does have real paid holidays. You still have the right to 4 weeks holidays, however, since you are not earning a monthly salary, the payment for holiday is folded into the hours worked.
that is a very good point, but can contractor get like you said monthly salary instead of hourly rate? I assume with monthly salary, one can get the real paid holidays.
Reply With Quote
  #8  
Old 19.10.2018, 20:56
Forum Veteran
 
Join Date: Jan 2017
Location: St Gallen
Posts: 534
Groaned at 44 Times in 29 Posts
Thanked 283 Times in 167 Posts
Gramatyka356 has earned some respectGramatyka356 has earned some respect
Re: contractor salary issue (is it a fraud)

Quote:
View Post
that is a very good point, but can contractor get like you said monthly salary instead of hourly rate? I assume with monthly salary, one can get the real paid holidays.

As an hourly employee you are paid the 30 per hour. You are earning your rights to a holiday proportionally to the number of hours. You are being paid your earned holiday up front with each hour, so your effective hourly rate get up to 36. With full time contract you have never seen the money locked each year for your holiday.

The difference with the two contracts is that on your hourly contract you can decide how you utilize the holiday funds, you may decide to work the whole year and to gain a little more cash. Full time employees are required to take their holiday leave as far as I know.

Theoretically if you would be "converted" to what you have suggested, a monthly salaried employee, the conversion would be equivalent to the 30 chf per hour, got it?
Reply With Quote
  #9  
Old 20.10.2018, 09:45
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 14,198
Groaned at 256 Times in 224 Posts
Thanked 21,076 Times in 8,559 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: contractor salary issue (is it a fraud)

Quote:
View Post
that is a very good point, but can contractor get like you said monthly salary instead of hourly rate?
No. Temporary or permanent employees of the client get that. Contrators don't.
Reply With Quote
  #10  
Old 20.10.2018, 10:55
Guest
 
Posts: n/a
Re: contractor salary issue (is it a fraud)

Quote:
View Post
It's not fraud. It's all correct. It's how contracting works.
Yes, sadly this is the way it works these days.

I say sadly because this way it's possible for an individual to lose out if they're not savvy about ensuring the claim back all the contributions they're making into their own vacation and sickness funds, and anyway those payments are at best delayed and earning interest for the agency in the mean time.

I know that this change was driven by a move towards more transparency with a view to protecting the individual, but I much prefer the old way of working, where the full rate was paid directly with no provision for paid time off - if you didn't, or couldn't, work, you didn't get paid, simples.
Reply With Quote
This user would like to thank for this useful post:
  #11  
Old 20.10.2018, 11:33
robBob's Avatar
Forum Legend
 
Join Date: Mar 2012
Location: Zurich
Posts: 3,035
Groaned at 65 Times in 50 Posts
Thanked 2,911 Times in 1,546 Posts
robBob has a reputation beyond reputerobBob has a reputation beyond reputerobBob has a reputation beyond reputerobBob has a reputation beyond reputerobBob has a reputation beyond reputerobBob has a reputation beyond repute
Re: contractor salary issue (is it a fraud)

Agencies by law now have to make provisions for holidays. So they all have to do it. In earlier times this was hardly done.

Best is to go by the All in rate if you want to compare and shop around. This is the hourly or daily amount before employer and employee deductions.
As for sick days. Contractors never get sick!
Reply With Quote
  #12  
Old 20.10.2018, 16:09
NotAllThere's Avatar
Modulo 2
 
Join Date: Oct 2008
Location: Baselland
Posts: 14,198
Groaned at 256 Times in 224 Posts
Thanked 21,076 Times in 8,559 Posts
NotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond reputeNotAllThere has a reputation beyond repute
Re: contractor salary issue (is it a fraud)

Quote:
View Post
...Contractors never get sick!
I do... but then I work from home, so I don't infect my colleagues.

However, recently I became a 50% employee, and when I was ill with a gum infection earlier this year, it was kind of nice that I still got my salary.
Reply With Quote
  #13  
Old 22.10.2018, 00:01
Senior Member
 
Join Date: Feb 2007
Location: Suisse Romande
Posts: 499
Groaned at 2 Times in 2 Posts
Thanked 113 Times in 90 Posts
eireann has made some interesting contributions
Re: contractor salary issue (is it a fraud)

It’s easiest to think of your base salary as your “real” salary. You will get paid during your holidays as the company “reserves” that salary for you - but it will be on the base hourly rate. A different mindset when you’re used to being an employee.
Reply With Quote
  #14  
Old 23.10.2018, 13:36
tch tch is offline
Junior Member
 
Join Date: Jun 2018
Location: Basel Land
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
tch has no particular reputation at present
Re: contractor salary issue (is it a fraud)

Quote:
View Post
As an hourly employee you are paid the 30 per hour. You are earning your rights to a holiday proportionally to the number of hours. You are being paid your earned holiday up front with each hour, so your effective hourly rate get up to 36. With full time contract you have never seen the money locked each year for your holiday.

The difference with the two contracts is that on your hourly contract you can decide how you utilize the holiday funds, you may decide to work the whole year and to gain a little more cash. Full time employees are required to take their holiday leave as far as I know.

Theoretically if you would be "converted" to what you have suggested, a monthly salaried employee, the conversion would be equivalent to the 30 chf per hour, got it?
thanks for the details, finally know how the staff leasing company is operating, in theory, are there a minimal holidays that I have to take every year? my HR didn't say anything about this. if I get it, I can have taken no holidays through the whole year, in this case, the actual hourly rate 36 will be fully paid to me though the holiday compensation will be paid in the end.
Reply With Quote
  #15  
Old 23.10.2018, 13:40
tch tch is offline
Junior Member
 
Join Date: Jun 2018
Location: Basel Land
Posts: 32
Groaned at 0 Times in 0 Posts
Thanked 1 Time in 1 Post
tch has no particular reputation at present
Re: contractor salary issue (is it a fraud)

Quote:
View Post
It’s easiest to think of your base salary as your “real” salary. You will get paid during your holidays as the company “reserves” that salary for you - but it will be on the base hourly rate. A different mindset when you’re used to being an employee.
Yes, indeed.
Reply With Quote
  #16  
Old 26.10.2018, 18:12
Senior Member
 
Join Date: Feb 2007
Location: Suisse Romande
Posts: 499
Groaned at 2 Times in 2 Posts
Thanked 113 Times in 90 Posts
eireann has made some interesting contributions
Re: contractor salary issue (is it a fraud)

Quote:
View Post
thanks for the details, finally know how the staff leasing company is operating, in theory, are there a minimal holidays that I have to take every year? my HR didn't say anything about this. if I get it, I can have taken no holidays through the whole year, in this case, the actual hourly rate 36 will be fully paid to me though the holiday compensation will be paid in the end.

By law you must take 2 consecutive weeks of vacation.

https://www.englishforum.ch/employme...swiss-law.html
Reply With Quote
Reply

Tags
compensation, contractor, salary




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
IT Contractor on RAV is forced to take permanent positions. Solution? Singhalleluja Employment 56 12.03.2016 22:06
Media Markt - Fraud [Not Fraud - Warranty Issue] junkeitch Complaints corner 28 20.08.2014 15:50
Is it normal here not to reveal salary until offer is made? Nadia77 Employment 46 20.12.2012 11:43
Is it illegal to sell stuff on ebay?[Cutoms issue] swisskat Other/general 10 29.08.2007 11:41


All times are GMT +2. The time now is 01:04.


Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0