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:
- 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.
- 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.
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