How ‘Stop Mass Immigration’ may impact your recruiting process in 2018

in Legal, Tax, 30.11.2017

How will the initiative impact recruitment? I’d like to give you an answer on this one. On 8 December 2017, the Swiss Federal Council confirmed the law for the initiative’s definite implementation to take effect on 1 July 2018. Here’s what you need to know.

The implementation plan

A quick overview of the current implementation plan looks like this:

  1. All Switzerland-based employers will be obligated to register selected job vacancies in Switzerland with the regional employment office (RAV).
  2. All professions suffering from an outstanding nationwide unemployment rate (from 1 July 2018 until January 2020 of at least 8%) are subject to the registration.
  3. After having registered the vacant positions, the RAV will search their database and recommend matching jobseekers.
  4. During this process, the employer is banned from publishing a job advertisement for several days.
  5. If a suitable job applicant isn’t found, the employer can continue with its usual recruiting process and may publicly advertise the job.

So far, so clear. However, even if there are a few exceptions to the job registration obligation (such as internal company changes, employment of family members or short work assignments) two burning questions remain:

  • When do we talk of an outstanding nationwide unemployment rate?
  • And what is the relevant threshold?

 The kick-in threshold is low for 2018

The unemployment rate threshold to trigger the notification duty as well as the list of professions affected by this threshold will be set by the Swiss Federal Council on an annual basis.

After initial discussions had revolved around a 12% unemployment rate threshold, the Federal Council set the threshold for 2018 at a much lower rate of 8% as of 1 July 2018. As of January 2020, the threshold will be reduced to 5%.

The list of affected professional titles is broad and unclear

Consequently, the list of jobs affected in 2018 is not only several pages long, but also contains some unexpected professions, such as several from the marketing arena.

There’s also going to be significant ambiguity as to which jobs are subject to notification duty. The list contains unclear professional titles that leave room for interpretation and open up the scope to a great extent. Examples include broad titles such as “mechanical engineers” or the even more confusing “professions in economics” and “other employees with non-determinable non-manual activities”.

What this means for your 2018 recruiting process

Although the changes were initially announced to take effect on 1 January 2018, the Swiss Federal Council has decided in December 2017 to enforce the new rules by 1 July 2018.

When it is enforced, failing to comply with the duty to notify the authorities of a reportable job vacancy may lead to a fine of up to CHF 40,000 per case. So it’s simple: You’d better comply.

Taking the broad and uncertain scope of affected professions into account, this basically means that you may must choose between the following two options with regard to all vacancies that could potentially fall under one of the categories listed:

  • Option A: Assess on an individual-case basis whether a vacancy is a fit to one of the listed professional titles; or
  • Option B: Notify the RAV as a default step in your recruiting process. This applies, at least under the assumption, that the authorities have not elaborated an approach in practice yet.

Option A offers the chance to avoid notifications in some cases, although it means having to assess every case individually and risking a fine. Choosing Option B may mean you avoid the risk of sanctions but must extend your default process and deal with the resulting increased administrative effort.

In an ever more responsive recruiting market, both scenarios create a time-delay disadvantage for Switzerland-based employers compared to their competitors outside of Switzerland. This applies to the recruitment of EU nationals, whilst for non-EU nationals in Switzerland as well as in many other EU states, an even more complex process is already in place.

Anticipate further changes

The directive to introduce the definite framework conditions was adopted by the Federal Council on 8 December 2017.  As the cantons and the unions have heavily criticized the realization plan and due to insufficient development of the notification software (which is currently under construction) the Federal Council decided to raise the threshold to 8% as of 1 July 2018 and to decrease it to 5% as of 1 January 1 2020.

Moreover, even after the implementation of the final version of the rules, the future remains uncertain. The Swiss People’s Party disagrees with the planned soft implementation and has already announced the initiation of a couple of further initiatives – all of which aim to further limit the EU free-movement rights. The ‘Out of the Dead End’ initiative (RASA) that aimed to overturn the ‘Stop Mass Immigration’ initiative was withdrawn by the originators committee due to its rejection in parliament. As a result, we don’t expect to see a ruling to overturn the ‘Stop Mass Immigration’ initiative. Going forward, the Swiss Federal Council’s recent confirmation of the implementation plan should provide some guidance for the near future.

KPMG’s Immigration Services team is closely monitoring the situation. In steady contact with the federal and cantonal authorities, we’re able to keep our clients informed and aware of any need for action.

 

 

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