Originally published on 29 August 2023. Updated on 22 January 2026.
In Europe, mandated reporting and other compliance requirements have helped to put diversity, fairness, and inclusion on the priority list for organizations. With the forthcoming EU Pay Transparency Directive, there is a strong desire for forward movement in closing the gender pay gap. Most use the mean or median distribution of women’s and men’s pay. But in July 2020, Switzerland’s revised Federal Act on Gender Equality came into force, and with it, stringent analysis, auditing, and communication requirements. Companies with over 100 employees are obliged to assess the unexplained gender pay gap (adjusted pay gap) using the more sophisticated statistical model, namely an ordinary least squares (OLS) regression analysis. Whilst many companies may worry whether their current gender pay gap is compliant with Swiss requirements, those using the EDGE Certification have little cause for concern.
How Swiss Regulation is Changing the Workplace Fairness Landscape
The rationale for the Swiss government to introduce such a stringent approach was that the average pay gap between men and women working in the private sector both in Switzerland and across the OECD was found to be around 18%. When the Swiss government looked at the reasons for the gap in equal pay, they found up to 8% of that pay gap couldn’t be justified by objective, relevant, and non-discriminatory factors such as tenure, age, level of responsibility, type of performed function, or work-time percentage. It decided to try and hold companies accountable for the unexplained pay gap and incentivize achieving more equality in pay by setting a tolerance threshold of 5%.
The process of measuring the unexplained pay gap is defined by Swiss law. It comprises three phases spanning three consecutive years: first, to complete a legally and scientifically compliant equal pay analysis, such as the EDGE Pay Equity Analysis Methodology; second, to have the results of the analysis verified by an independent, authorized body; and third, to communicate the results to employees for non-public organizations, or to employees and shareholders for public listed companies.
If, at the end of this process, a company’s unexplained gender pay gap remains higher than 5%, the regression analysis has to be conducted every four years until the pay gap falls below this threshold. However, if the 5% threshold is reached, the company doesn’t have to do anything else until 2032, when the legislation will be reviewed again.
Despite the sophistication of the legal framework, early assessments suggest that progress has been uneven. As of mid-2025, public commentary and analysis in Switzerland have highlighted that the law’s reliance on a largely “one-and-done” compliance mechanism, i.e., where organizations meeting the 5% threshold are not required to reassess for several years, has limited its impact on sustained pay equity improvement. Critics point to the absence of a strong obligation for continuous remediation once formal compliance is achieved, raising questions about the law’s effectiveness in driving long-term change. In contrast, the EU Pay Transparency Directive places an ongoing obligation on employers to identify, justify, and actively address pay gaps over time, as does EDGE Certification.
Pay Equity Analysis Methodology Under Swiss Law
All companies in Switzerland with 100 or more employees must conduct an unexplained gender pay gap analysis using a statistically sound methodology. The EDGE Certification methodology meets these requirements, applying an OLS regression analysis consistent with Swiss legal expectations. The EDGE methodology uses the same 5% tolerance threshold, meaning EDGE-certifying organizations are already being guided toward meeting the Swiss regulatory requirement, assuming they haven’t achieved it already.
To help organizations perform the pay equity analysis in accordance with the regulation, the Swiss government provides a free web-based tool for conducting equal pay analyses called Logib. Updates to the Logib tool illustrate the direction of travel in Swiss pay equity policy. In January 2024, the Federal Office for Gender Equality introduced refinements to Logib, including an optional target value of 2.5% for equal pay analyses conducted outside the context of public procurement, while maintaining the legal limit value of 5%. While not legally binding, this lower target value signals an expectation of continuous improvement.
It is important to stress that whilst Logib is the government’s proposed tool for conducting equal pay analyses, it is not mandated as such. The government recognizes that other equal pay methods are already in use in the country, and these methods can continue to be used, assuming they enable compliance with Swiss law and are independently validated by a recognized authority. In this context, the EDGE Pay Equity Methodology provides organizations with a compliant, independently reviewed alternative to Logib, while offering additional analytical depth and international comparability.
Notably, the EDGE Pay Equity Analysis Methodology has been assessed by the economic departments of five top Swiss Universities, which all attest to its scientific rigour and legal compliance. The analysis covers all employees’ base salary, bonuses, and other cash benefits at pro-rated, full-time equivalent rates, in line with Swiss law.
Future-proofing Your Organization Against Future Regulatory Change
With the increasing regulatory pressure in Switzerland and the rest of the EU, compliance in the area of diversity, fairness, and inclusion is unavoidable. Regulatory requirements in the EU are getting increasingly sophisticated, from the very quantitative to the more qualitative, from the outcomes to the processes. Ignoring these changes will mean being confronted with the fines associated with non-compliance and the negative impact on the reputational value of being the organization at the back of the crowd!
But at EDGE, we know that organizations need more resources to meet all the different requirements, now and those coming in the future. EDGE is at the forefront of compliance with these emerging regulations and is helping companies to navigate the change. EDGE is streamlining and creating efficiencies by ensuring the methodology and solutions can be verified by independent third parties. Such a holistic approach is necessary to future-proof organizations against regulatory changes. Enabling companies to comply easily with the revised Federal Act on Gender Equality and its strict requirements to help reduce the current estimated unexplained 8% gender pay gap in Switzerland is just one example of how EDGE is doing that.
No matter what new regulation may be just around the corner, EDGE Certification can play a crucial role in helping organizations to stay compliant, stay committed, and drive Real. World. Change.
