Swiss immigration: recent developments and outlook 2018

in Legal, Tax, 15.12.2017

Looking back at 2017 and forward to 2018, I offer an overview of the latest developments and outline some recommendations for navigating Switzerland’s immigration laws and admission practice. It’s clear employers will have to review recruitment processes before the ‘Stop Mass Immigration’ plan takes effect in July 2018.

The Swiss Federal Council increased the number of work permits for 2018 – ending 2017 on a positive note. Still, next year promises to be a challenging one for recruiters and foreign workers.

We can expect the implementation of new legislation arising from the ‘Stop Mass Immigration’ initiative by mid-2018. Aimed at reducing the number of EU nationals in the workforce, the legislation brings considerable legal uncertainty and may place a huge strain on employers. Read on to find out what you can expect regarding immigration in 2018 and get a brief review of 2017.

Immigration Outlook 2018

Let’s start by looking at the developments you need pay attention to in 2018.

1. Increase to 8,000 permits for non-EU nationals and EU nationals on assignment in 2018

What it means:

Quotas non-EU nationals (on local contracts and on assignments)

  • Increase to 8,000 permits for non-EU nationals (3,500 residence B permits; 4,500 to short-term L permits).
  • The quotas will be released on 1 January 2018.
  • Each canton receives a quota according to its estimated needs (2,000 L permits; 1,250 B permits).
  • The federal migration authority may assign quotas from the federal reserve on request of the cantons (2,500 L permits and 2’250 B permits) if necessary.

Quotas EU nationals on assignment

  • Increase of quota for EU nationals to a total of 3,500 (500 residence permits and 3,000 to short-term L permits)
  • The quotas will be released on a quarterly basis on 1 January 2018, 1 April 2018, 1 July 2018 and 1 October 2018.

 

 

What you need to do:

Overall, the quota situation in 2018 looks slightly better compared to the past couple of years. Nonetheless, it’s highly likely the EU nationals quotas will be exhausted before a quarter’s end – in the past, the quotas were often already depleted two weeks into a new quarter. This means that individuals with applications still pending at the quarter’s end aren’t entitled to take up work and must await the release of the next quota-portion – or even refile their application.

You can avoid delays. Be sure to:

  • Plan ahead when setting up assignments to Switzerland or staffing projects. Note that the quota for EU nationals may be met early in the quarter.
  • When possible, use a starting date at the beginning of a quarter for work permits as applications are treated ‘first received, first processed’.

 

2. ‘Stop Mass Immigration’ initiative

What you need to know:

Many employers will have to reconsider their recruitment processes – at the latest – by July 2018 when the ‘Stop Mass Immigration’ initiative is implemented.

The new legislation foresees the following elements:

  • Employer’s obligation to register job vacancies with the local unemployment office (RAV)
  • All professions suffering from an outstanding nationwide unemployment rate (first of at least 8%[1]) are subject to such registration
  • The employer must involve RAV regarding the suggestion of candidates, review of candidate profiles and response to RAV. etc.
  • During this process, the law bans employers from publishing a job advertisement for several days
  • The employer may only continue with its “usual” recruiting process – such as publishing job ads – only if no suitable job applicant is found via the RAV

What you need to do:

The scope of affected professions is rather broad and uncertain. Nevertheless, compliance is crucial as violators may face fines of up to CHF 40,000 per case.

To avoid such fines, employers will have to reassess the recruitment processes and decide whether they:

  1. will notify the RAV as a default step in the recruiting process;
  2. assess the necessity to notify the RAV in each individual case (e.g. Does the job vacancy match one of the professions with an unemployment rate of at least 8%?).

Read more about how ‘Stop Mass Immigration’ initiative may impact your recruiting process in 2018.

 


Immigration developments 2017 in a nutshell

The last couple of months brought several changes in the Swiss immigration landscape. Here’s a summary of the most important changes in 2018 and how they could affect your business.

1. Activation of a Quota System for Romanian and Bulgarian nationals

What it means:

  • Type B work permits for Bulgarian and Romanian citizens with new long-term (more than 12 months) employment with a Swiss employer are (again) subject to quota.
  • They are only admitted in limited numbers (quota) subject to official approval and require formal application.
  • These restrictions apply until 31 May 2018. The Swiss Federal Council may decide to prolong the period of restrictions (quota) for one more year effective 1 June 2018.

Why it matters:

For now, when employing a Bulgarian or Romanian citizen not yet in possession of a Swiss work permit, you take the risk that the employee will not get a B permit (in time).

What you can do:

  • Inform your employee that depending on the quota situation and depending on the employment contract, they will either receive a L- or a B-permit.
  • Plan ahead: Ideally, employment start dates should be at the beginning of a quarter to increase the chances of success in receiving a B permit (‘first come, first served’ principle applies).

2. Adoption of new immigration regime granting Croatian citizens some free movement rights in Switzerland

What it means:

a) Simplified Visa requirements

Croatian citizens do not need an entry visa to enter Switzerland anymore, if they:

  • Visit Switzerland for private stays (vacation, visiting family, etc.) for a maximum of 90 days per calendar year.
  • Come to work in Switzerland for a maximum of 90 days per calendar year.

b) Official online notification tool is now applicable for short work trips to Switzerland (assignments[2] only)

Croatian citizens meant to work in Switzerland on assignment (e.g. project work) may be registered online for a maximum of 90 days per calendar year. It’s important to note that the ‘90 day per calendar year threshold’ applies per employer – not per employee.

Why it matters:

From a workforce planning perspective (project staffing, etc.), the online notification tool is an excellent addition to formal work permits. In the case of planned business trips or assignments of your Croatian subsidiary/business partner, etc. remember that:

  • you can now use the online notification tool for Croatian nationals;
  • no entry visa requirements apply to Croatian nationals who are registered online.

 

 Caveat

As for the access of Croatian citizens to the Swiss labor market (i.e. employment with a Swiss employer), restrictions remain in place for the time being[3].

More concretely, the following limitations currently apply:

  • The principle of priority of Swiss nationals and individuals with a citizenship of an EU member state other than Croatia applies. This means that a Croatian citizen may only be hired by a Swiss employer if – despite strong recruiting efforts – it was not possible to hire a Swiss or EU national.
  • Permits for Croatian nationals with a Swiss employer are limited. 543 L permits and 54 B permits have been issued for Switzerland for the year 2017. For the period from 1 January 2018 until 31 December 2018, a quota of 748 for L permits and a quota of 78 B permits applies.
  • Salary requirements and working conditions will be subject to assessment by the immigration authorities. Failure of compliance with the legal requirements may lead to denial of permit applications.

 

3. New measures to prevent salary dumping

We’ve seen a rise in the number of labor inspections over the past months and years and there’s been an amendment of Swiss immigration law stipulating heavier penalties for violation of Swiss salary requirements.

What it means:

  • Taking effect on 1 April 2017 according to the amended Swiss Law on Assignments (German: “Entsendegesetz”), penalties for violation of Swiss minimum working conditions and salary requirements increased from CHF 5,000 to CHF 30,000.
  • Alternatively, or in severe cases additionally, the non-compliant employer may be banned from performing any services in Switzerland for a period of one to five years. In the construction industry, main contractors may now not only be held liable in the case of sub-contractors undershooting the reference salary levels (as in former times), but may also be prohibited from providing services in Switzerland for up to five years.

Call for action

Over recent months, we’ve seen an increasing number of labor inspections and bans imposed on fallible employers. Therefore, we recommend that:

  • You reassess your salary/expense compliance regularly. Note that Swiss reference salary levels and practice regarding meal and housing allowances are subject to frequent re-evaluations.
  • Companies in the construction industry engaging subcontractors should implement control measures to ensure that your subcontractors adhere to Swiss salary requirements. Ask for evidence in writing, such as salary statements, working contracts, etc.

 

[1] As of January 2020, the threshold will be decreased to 5%.
[2] In the present text an assignment refers to an individual’s limited stay in Switzerland, for working purposes (e.g. project work, intra-group-transfer), while staying formally employed with the legal employer domiciled in another country than Switzerland.
[3] Switzerland may restrict full free movement rights of Croatian nationals until 31 December 2026, at the latest.

 

 

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