No more work permit quotas available for assignees from EU/EFTA member states

Background
Swiss work permits are limited by quota, as follows:

  • 4’000 L permits for Non-EU nationals
  • 2’500 B permits for Non-EU nationals
  • 2’000 L permits for EU/EFTA assignees
  • 250 B permits for EU/EFTA assignees

Please note that the above quotas are only relevant for permits that are valid for more than 4 months or 120 days. All permits valid for up to 4 months or 120 days remain quota free.

Please note that permits for EU/EFTA citizens locally hired in Switzerland and subject to Swiss social security are not affected, as they are not subject to quota restrictions.

IMPORTANT! The quota for Non-EU work permits is released annually and dispatched to the cantons according to a specific number set in advance. The quota for work permits for EU /EFTA assignees is released quarterly for all of Switzerland.

No quotas left for EU/EFTA assignees until 1 April 2016
There are no more quotas left for assignees from EU/EFTA countries for the 1st quarter of 2016. This means that until 1 April 2016, it will not be possible to obtain new work permits valid for more than four months / 120 days for EU nationals assigned to Switzerland as part of an intra-company assignment or to work on a project at a client site.

Suggestions on how to deal with the current situation

  • For extensions of work permits no quota is required – business as usual.
  • Work permit conversions from a quota free work permit into a longer term work & resi-dence permit will not be possible until 1 April 2016. For such cases, the on-line notifica-tion procedure will likely have to be used in the next 30 days as an interim solution.

New applications for EU/EFTA assignees

  • For all EU/EFTA assignees who need to start to work in Switzerland prior to 1 April 2016, there are the following options: use the on-line notification or obtain 120 day / 4 month quota free work permits;
  • For EU/EFTA assignees who need to start to work in Switzerland as of 1 April 2016, an application for a work permit should be submitted as soon as possible.
  • As EU/EFTA work permits for local hires are not restricted by a quota, we advise, when-ever possible, to switch assignees to a local Swiss employment contract. This implies however the registration of the employee in the Swiss social security system and would result in the individual being subject to Swiss employment regulation

What changes can we expect in the coming months
Generally all work permit applications are increasingly scrutinized by the different immigration authorities involved. Due to cantonal differences and the persistent change in the practice, we highly recommend that companies carefully check the need and requirements for all new se-condments to Switzerland very closely.

We expect further pressure to provide detailed and well drafted applications that outline the specific need for each assignment and the economic benefit thereof for the company and the Swiss canton where the employee will be assigned. Therefore we kindly ask that you support us to obtain the required information, as detailed and specific as possible, on any upcoming as-signments.

PwC will continue to monitor the Swiss immigration authorities on federal and cantonal level very closely, and will continue to have close discussions with the various authorities involved. We will advise all clients on any upcoming changes and we will keep you updated throughout of any impending amendments.

Your PwC Contacts:

Mirela Stoia
PwC Geneva
+41 58 792 91 16
Mirela.stoia@ch.pwc.com
Martin Zeier
PwC Basel
+41 58 792 52 74
Martin.zeier@ch.pwc.com

Immigration alert: Current practice of the Zurich Labour authority

Background

On 9 February 2014, voters in Switzerland approved a new constitutional provision (art. 121 a Federal Constitution; Cst) by a slim majority of just over 50 percent.

After the acceptance of this provision (even though it will only come into force in February 2017), we have observed that certain cantonal immigration authorities are applying increasingly stringent practices, in particular the Zurich Labour authority (hereafter ‘AWA’). The main reasons for this, as communicated to us by the AWA, are the lower quotas available compared with 2014 and the more stringent practice implemented by the Federal authority (‘SEM’).

As a reminder, the work permit quotas for Non-EU nationals and for assignees (i.e. posted workers) from EU/EFTA countries for the whole of 2016 are limited to:

  • 4,000 L permits for Non-EU nationals
  • 2,500 B permits for Non-EU nationals
  • 2,000 L permits for EU/EFTA assignees
  • 250 B permits for EU/EFTA assignees

The above quotas are only relevant for permits that are valid for more than four months or 120 days. All permits valid for up to four months or 120 days remain quota free.

Please note as well that permits for EU/EFTA citizens working on a local Swiss contract and subject to Swiss social security are not affected, as they are currently not subject to a quota. This may change when the new constitutional provision mentioned above will come into force in February 2017.

IMPORTANT! The quotas for Non-EU nationals are issued annually and distributed among the cantons according to a predetermined number. The quotas for EU/EFTA assignees are issued each quarter Switzerland-wide.

 

Key points of AWA’s current practice

 1. PROJECT ASSIGNEES

1.1. Change of project with a valid Swiss work permit

In Zurich it is no longer possible to obtain approvals for a change of project for assignees (EU/EFTA or Non-EU nationals) who already have a valid work permit for a (different) project in Zurich or in another canton. The AWA does not differentiate between a quota-free four-month/120-day work permit and a permit subject to a quota (e.g. L type) valid for 12 months.

Example: Mr Smith, a UK national employed by company X, has a valid work permit for a project that is being run at the premises of company A in Zurich. After a few months, he is required to work as a project manager on a different project at the premises of company B. The employment conditions are unchanged: he is highly qualified (he has a university degree and between five and ten years’ work experience) and is paid a salary over CHF 10,000 per month. He also has the specific know-how as a project manager required for the project at company B. According to its current practice, the AWA would not approve such a change of project, even if company X cannot find another person in its pool of specialists to do this job and company X has an obligation to deliver this critical project for company B.

The only exceptions to the above practice are:

  1. If one and the same project is being run in several cantons, the canton of Zurich may approve the assignee’s employment in Zurich on this one project.
  2. Only when a project is definitively concluded (‘nachweislich beendet’) is it possible to request a change of project for the remaining days available on the currently held permit. This means, for example, that if the assignee has a valid work permit until May 2016 to work on project A, but project A finishes in February 2016, his/her reassignment to a different project in February and May 2016 may be approved. However, if the assignee finishes his/her project-related tasks in February 2016, but the project itself is not finished, he/she cannot be reassigned to work on another project in the canton of Zurich from February till May 2016.

If one of the two conditions above are fulfilled, the employer may submit a complete application to the AWA, as for a totally new case and the AWA may approve the application. In practice, this means: 1) a few days to gather the required documents; 2) a few hours to prepare a new application letter and file the application and 3) around two to three weeks’ processing time.

Please note that in other cantons in Switzerland, a change of project is still possible for assignees with a valid work permit if there are substantial reasons. Approval for a change of canton may be obtained by communicating the new work location to the authority in question and confirming that the employment conditions are unchanged.

1.2. Contracts (SOW vs. MSA)

Previously in Zurich and currently in other cantons, a master services agreement (MSA) or a confirmation letter covering the main contractual points and signed by the Swiss client at whose premises the project takes place as well as by the company providing the services is considered as sufficient proof for approving a work permit application for a project assignee. Work permits are issued/extended by the relevant labour authorities (with the exception of the AWA in Zurich) on the basis of such an MSA or confirmation letter.

As per its current practice, the AWA only approves applications for project assignees if the applications are accompanied by a statement of work (SOW) duly signed by both parties. Permits are strictly limited to the duration of the SOW.

Example: If the SOW is valid until 31 December 2015, the work permits will be valid only until this date. The AWA does not consider as sufficient either an MSA duly signed by all parties and stipulating that the project will last until (for example) March 2017 or a confirmation letter signed by the company at whose premises the project takes place confirming that the project will effectively last until March 2017.

2. INTRA-COMPANY ASSIGNEES (Non-EU nationals)

The main conditions relating to intra-company assignments Switzerland-wide are:

  • minimum 12 months’ work experience with the group before being transferred to Switzerland;
  • limited duration of employment in Switzerland (generally up to three or four years);
  • highly specialised employee (at least a university degree, several years’ experience in a specific area and the job in Switzerland must correspond to the employee’s specific know-how and experience) or a member of executive management;
  • employment conditions in Switzerland must be in line with those of a Swiss employee with a similar educational and professional background in a similar trade/profession and in the same location; and
  • further conditions, such as overall economic interest, appropriate housing, etc.

According to the current practice of the AWA, only management employees with oversight or leadership responsibilities may be transferred to Switzerland on the basis of a Swiss employment contract. For employees on a lower hierarchical level, the priority of local workforce must be respected (see point 3 below). Highly specialised employees may only obtain a Swiss work permit (provided all of the above conditions are fulfilled and the work permit quota is not exhausted) if they are assigned to Switzerland. This means that:

  • the employees remain in foreign employment throughout the duration of the assignment;
  • they are issued an assignment contract covering their employment conditions during the assignment; and
  • all costs in relation to the assignment, including travel, housing and meal expenses must be borne by the employer. The housing and meal expenses amount to at least CHF 3,000 per month or CHF 36,000 per year and must be paid on top of a gross salary amount that is in line with the Swiss salary requirements.

Please note that the AWA strictly limits all work permits issued to assignees to 48 months. With very few exceptions, a work permit for an assignee cannot be extended beyond 48 months and the employee cannot be ‘localised’ (i.e. switched to a Swiss employment contract) either. Hence, in principle, the employee must leave Switzerland after 48 months.

3. LABOUR MARKET SEARCH

As best practice, prior to hiring a new employee, all companies are, in principle, required to perform a labour market search to ensure there is no person with the required skills available in the Swiss/EU labour market. This labour market search is a legal requirement when applying for a work and residence permit for a Non-EU national.

According to the AWA’s practice, a job ad should be placed for around three to four months on the cantonal job centre’s website and on at least two internet websites that are publicly accessible (i.e. internal company websites are not accepted). The job ad must be placed explicitly for the specific job in question. The job ad is carefully scrutinised and a general ad is no longer accepted.

4. NO FAST TRACK PROCEDURE

The AWA does not currently have a ‘fast track procedure’. Furthermore, the AWA does not differentiate between various types of cases (e.g. ‘normal’, ‘urgent’, ‘very urgent’, ‘VIP’). This means that AWA processes each case according to its filing date. In principles, no exceptions are made.

The AWA’s standpoint is that, in order to avoid discrimination, the AWA does not offer any preferential processing. Hence, the AWA processes applications according to its ‘normal processing time’, which may vary between ten days and three weeks depending on the workload of the competent officer.

A fast track procedure is currently not planned.

Conclusions and suggestions for dealing with the current situation

Although Swiss immigration law might seem fairly simple compared with that of other countries, the practice of the Swiss authorities may be challenging, as outlined in the above examples. Furthermore, the practice may vary from location to location and it is continuously evolving.

The PwC Immigration Team is in daily contact with the AWA and all the other cantonal labour authorities Switzerland-wide. We monitor very closely any changes in the authorities’ practices and challenge certain problematic practices, whenever possible. We develop suggestions, workarounds and options to deal with issues. Moreover, we push for the use of fast track processes where these are feasible

Given the differences between the various cantons and continuous changes in practices, we recommend that companies check carefully their requirements for new secondments to Switzerland.

We expect the labour authorities will apply further pressure to provide detailed and well drafted applications outlining the specific need for each assignee and the economic benefits to both the company and the canton in which the employee will be assigned. Therefore, we kindly ask that you support us in obtaining as quickly as possible the detailed and specific information required for your upcoming assignments.

PwC will continue to monitor very closely the Swiss immigration authorities at federal and cantonal levels and continue our discussions with them. We will update and advise you on any upcoming changes.

 

Your PwC contacs

Mirela Stoia
Senior Manager
PwC Geneva
+41 58 792 91 16
mirela.stoia@ch.pwc.com
Martin Zeier
Director
PwC Basel
+41 58 792 52 74
martin.zeier@ch.pwc.com

Immigration update – New implementation concept for the ‘Mass Immigration’ initiative

Background

On 9 February 2014, voters in Switzerland approved a new constitutional provision (art. 121 a Federal Constitution; Cst) by a slim majority of just over 50 percent. The vote was the result of years of political pressure, particularly in regions experiencing high migration inflows. Overall, Switzerland takes in up to 100,000 immigrants annually, mostly from European Union (EU) countries.

Key features of art. 121a Cst

In the future, Switzerland aims to manage immigration autonomously. Thresholds and quotas will limit the number of permits issued to foreigners. Such quotas will have to be set in such a way that they reflect Switzerland’s overall economic interests, while businesses will be required to prioritise the domestic workforce in their hiring decisions.

Art. 121a Cst will be implemented by amending the Federal Act on Foreign Nationals (FNA). The amended FNA enters into force in 2017, provided the political process is completed by then. (If the FNA is not amended in time, the Federal Government will enact transitional regulations.)

Implementation concept 

The Federal Council issued an initial draft of the FNA implementation concept in February 2015 for public consultation. On 4 December 2015, the Federal Council communicated the next steps in the implementation process of art. 121a Cst. By March 2016, the final FNA draft will be sent to Parliament.

Key elements of the FNA draft

  • Dual immigration concept: The Federal Council intends to maintain different systems for EU/EFTA nationals and for non-EU nationals, like today. The initial concept envisaged applying quotas on permits for EU nationals employed in Switzerland. However, this raised major concerns concerning compatibility with the Bilateral Agreement on the Free Movement of Persons. Now, the Federal Council has opted for a new approach which introduces a ‘safeguard clause’ in the FNA for EU/EFTA nationals employed by Swiss companies, whereas quotas will continue to apply to permits for non-EU nationals as they do today.
  • Safeguard clause: Once a certain annual threshold of EU/EFTA permits is reached, quotas shall be introduced. These quotas will limit the issuance of new permits to EU/EFTA nationals arriving in Switzerland in the following year. If the threshold is not exceeded, no restrictions will apply. The Federal Government will determine the threshold, taking into account the economic situation and the recommendation of an immigration commission*.
  • Quotas: After consultation with the immigration commission, the Federal Government will decide on the exact quotas per year. Quotas will be assigned for each canton (the Swiss administrative regions), taking into account the cantons’ specific needs. In principle, all permits valid for more than four months shall be limited by quota, except those for EU/EFTA nationals, which will be limited only if the threshold of the safeguard clause is exceeded.
  • Prioritisation of the domestic work force: A foreign national may be hired in Switzerland only if no suitable candidate is found locally. It is unclear to what extent this requirement will be assessed in individual cases, whether it will be assessed generally in determining quotas and the extent to which it will apply to EU/EFTA nationals.
  • Specialised labour force: To date, only (highly) specialised employees from non-EU countries are granted admission to the Swiss labour market and this remains unchanged. For EU/EFTA local hire, non-specialised employees may continue to apply for Swiss work permits.
  • Further restrictions: Some further restrictions may be imposed concerning the immigration of family members, unemployed persons and asylum seekers.

The elements outlined above are part of the implementation concept. However, the final FNA draft will likely contain further – as yet unknown – elements. Two factors are crucial here: the negotiations with the European Union and the results of the parliamentary debates.

* The newly appointed immigration commission is composed of experts and officials of the authorities and representatives of various associations.

Next steps regarding the implementation concept

The Federal Council will continue to work on finding a consensual solution with the EU to align the new FNA with the Bilateral Agreements.

The Federal Council’s proposed introduction of a safeguard clause may unblock negotiations with the EU. This would be the best-case scenario. Nevertheless, in case the EU does not agree with the terms of the proposed safeguard clause, the Federal Government is working in parallel on a unilateral safeguard clause, which will not be subject to the EU’s approval. However, this may endanger relations between Switzerland and the EU, as well as jeopardise the Bilateral Agreements.

Further changes in the Swiss immigration landscape

Apart from the revision of the FNA, the Federal Council decided on 18th December 2015 that additional measures will be taken to protect the Swiss labour market and employees. For instance there will be increased penalties of up to CHF 30’000 (instead of currently CHF 5’000) for infringements of Swiss minimal salary and working conditions when assigning employees to Switzerland. Furthermore, the Federal Council foresees enhanced controls in order to prevent illicit work.

We do not expect major changes in the current practices of the Swiss immigration authorities. However, some authorities have already adopted practices that are more restrictive.

The PwC Immigration team is in close contact with the cantonal and federal authorities as well as various organisations involved in the process. We continuously monitor developments relating to immigration and the Swiss labour market. We will advise clients on upcoming changes and any impending amendments to the FNA.

Please don’t hesitate to contact Mirela Stoia or Martin Zeier if you have any questions or wish to discuss these or other aspects of immigration in Switzerland.

Reforms to the Schengen agreement anticipated by the end of the year

Following the emergency meeting in Brussels on 20 November 2015 between European Union Ministers, stricter border security measures have been confirmed, ensuring “systematic controls” on all individuals entering the Schengen area.

Previously, EU nationals were subject to minimal identification procedures when entering the Schengen area. The new security measures will enforce verification of biometric information and systematic document checks against criminal and security databases. These measures apply to both EU and Non-EU citizens entering the Schengen area.

Since the Paris attacks, checkpoints have also been implemented on major routes between France and Belgium, where individuals are subject to passport checks. This comes after Germany, Austria, Sweden and Hungary reinstated internal border controls in order to control the influx of migrants this summer.

The European Commission has agreed to reform the Schengen border code by the end of the year to allow checks at all external borders, for all travellers (including EU nationals). It is anticipated, however, that the reform may take months to finalise. Currently, Police are allowed to make targeted ‘security’ checks on the border and emergency border controls can be imposed for up to 30 days only.

world map

Non-Schengen countries are also considering the implementation of additional border control measures following the Paris attacks. The United States, for example, has implemented a worldwide travel alert which will remain in place until 24 February 2016. The United Kingdom has also stated that it would be looking into “its own national system”.

PwC Legal are continuing to monitor developments closely and will issue further updates once further information is available.

Please do not hesitate to reach out to your usual PwC Legal contact or e-mail me

EU Ministers at the Brussels summit in talks to re-introduce border controls within the Schengen area

European Union Ministers are meeting in Brussels 20 November 2015 to discuss the tightening of Schengen borders following the attacks in Paris on 13 November 2015.

It is anticipated that the EU Ministers will re-introduce checks on both EU and Non-EU travellers at the borders of the 26 countries of the Schengen zone.

Latest reports are stating that sources have confirmed that the Interior ministers of the EU members are backing France’s call for the re-introduction of increased and systematic checks of all citizens at the borders.

Expected changes include a push for enhanced use of technology to better control external and internal borders, in addition to the implementation of a passenger information register. Collection of passenger information will likely be checked against a database of known or suspected terrorists and criminals. The Ministers will also be looking to examine and restrict the movement of firearms within the EU.

In addition, there will be increased requirements for Schengen visa applications. From today, biometric data collection and personal appearance has become a mandatory requirement for obtaining visas for Germany, Italy, Portugal and the Netherlands. This process is also in place for France, Spain and Switzerland. We expect that increased application requirements will also be implemented and formally announced by other Schengen countries following the summit.

We are monitoring developments as they happen, and will provide further updates on the outcome of the summit once they are formally announced.

Please do not hesitate to reach out to your Swiss legal team or e-mail me

The 2015 work permit quota levels have been re-confirmed for 2016

The Swiss Government has decided to keep the quota levels unchanged for 2016, although the numbers are significantly lower than in 2014:

  • Non-EU: 4’000 L permits and 2’500 B permits
  • EU/EFTA assignees: 2’000 L permits and 250 B permits

Whilst the quotas for Non-EU nationals are released annually and allocated to the cantons according to a set amount, the quotas for EU /EFTA assignees are released quarterly Swiss-wide. Until now we have not experienced any shortage of Non-EU quotas; however, the quotas for EU/EFTA assignees have been reached very quickly each quarter, which has and will continue to cause difficulties for EU service provid-ers in deploying resources in Switzerland.

Please note that the following types of permits are not subject to quotas: work permits valid for up to 4 months or 120 days issued to EU/EFTA or Non-EU nationals, crossborder commuter permits, work and residence permits issued to EU/EFTA citizens employed on the basis of a local Swiss work contract, and dependant permits.

What can we expect in 2016?

We do not expect major changes in the practice of the cantonal and federal authorities compared to 2015: the Zurich and Aargau Labour Departments are likely to continue pursuing their current stringent practice, whereas other cantons, in particular in the French-speaking part of Switzerland, will take a more economi-cally friendly approach.

To maximise the success of applications in all Swiss cantons, we advise companies to submit solidly drafted and complete applications and to ensure that the salaries paid to foreign employees are in line with Swiss local salary levels.

Please note that, as of May 2016, access to the Swiss labour market for Romanian and Bulgarian nationals will no longer be restricted.

Update on the implementation of the Mass Immigration Initiative

On 9 February 2014, a new constitutional provision (121a Swiss Constitution) was approved by 50.34% of the Swiss electorate. The provision has the intention of reducing mass immigration into Switzerland and requires that immigration be restricted by means of quantitative limits and quotas. These new restrictions are expected to enter into force as of February 2017.

Current status: A first draft of the implementation law is now available and will form the basis for political debate and future immigration policy. The RASA initiative has just been validated and may impact the process. The Swiss government appointed Jacques de Watteville for the negotiations with the EU, which represent another unknown factor in the equation.

PwC is closely monitoring the situation and actively discussing any updates with the Swiss authorities. We will keep you apprised of any new changes.

Infographic: Global Immigration Switzerland
The 2015 work permit quota levels have been re-confirmed

 

For more information on the topic discussed above please contact our experts:

Mirela Stoia, Senior Manager, +41 58 792 91 16, mirela.stoia@ch.pwc.com
Martin Zeier, Director, +41 58 792 52 74, martin.zeier@ch.pwc.com