Swiss Unions Call Referendum on Law That Puts Collective Agreements Before Cantonal Minimum Wages

The Swiss Trade Union Federation (SGB) voted unanimously on Friday to launch a referendum against a controversial legislative change that would give collective bargaining agreements priority over cantonal minimum wage rules. The decision sets the stage for a direct-democratic showdown with the federal parliament.

At the heart of the dispute is a fundamental question: whose wage floor prevails – the canton’s or the industry’s? Under the planned amendment, provisions in collective labor agreements (known as GAVs in Switzerland) would take precedence over cantonal minimum wage regulations. The National Council cleared the way for the change on June 1, and the Council of States had already given its approval in the spring. The final parliamentary vote in both chambers is scheduled for June 19. Federal Councillor Guy Parmelin, who oversees the economy, has publicly spoken out against the reform.

Five cantons currently operate their own statutory minimum wages: Geneva, Ticino, Neuchâtel, Jura and Basel-Stadt. The cities of Zurich, Winterthur and Lucerne have also introduced local wage floors, with hourly rates ranging between 20 and 24.59 Swiss francs. Under the proposed law, those cantonal floors would be frozen until a collective agreement reaches the same level. The Social Democratic Party has condemned the move as a “mini-putsch against cantonal competences.” Supporters from bourgeois parties counter that strengthening national sectoral agreements upholds the principle of tariff autonomy. Unions warn that the change would erode social protections.

Should the referendum succeed in collecting enough signatures, Swiss voters will have the final say – in what promises to be an already packed calendar of direct-democratic decisions. The next federal ballot on June 14 features votes on a sustainability initiative and amendments to the civil service law. If the referendum on the wage hierarchy law qualifies, it could land on the same ballot or a subsequent one.

Parallel to the Swiss debate, a second wage-related standoff is unfolding in Germany. The deadline for implementing the EU Pay Transparency Directive expired on June 7 without the German government submitting a draft bill. For the public sector and state-owned enterprises, the directive takes effect on June 8. Private-sector employers face a sharply increased risk of litigation, experts say, especially after a 2025 ruling by the Federal Labor Court lowered the bar for filing discrimination claims. At the same time, the Verdi union escalated its wage conflict in the retail and wholesale sectors on Friday with nationwide warning strikes. Verdi is demanding a 7 percent wage increase over a 12-month term and a minimum hourly wage of 14.90 euros. Employers have rejected the demands, and Verdi warns that the walkouts could trigger regional supply bottlenecks.

Despite the political turmoil, Switzerland’s labor market remains resilient. Industry analyses for 2025 show that salaries above 100,000 francs are still common in many sectors. Roughly 35 percent of companies plan to hire additional staff, and nearly half award performance-based raises. But employee priorities are shifting: around 39 percent of workers now rank job security above pure salary maximization. Among the most sought-after perks are company cars, job tickets, and home-office subsidies.

The outcome of the union referendum will test whether Swiss voters back the centralization of wage-setting or prefer to keep a local check on pay floors – a question that resonates far beyond the Alpine republic.

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