Border unemployment: the future in the Joint Committee (cross-border guide)

Context

In a nutshell

• The European Parliament has voted on a new regulation on social systems
• The reform points to the 'Lex Loci Laboris' principle for unemployment
• The final decision for Switzerland is up to the Joint Committee
• Significant financial impacts for the Canton of Ticino are feared

Key facts

• What: Reform of the coordination of social security systems
• When: Parliamentary vote in Strasbourg, ten-year process
• Where: EU and Switzerland, via Joint Committee
• Who: European Parliament, Federal Council, SECO
• Amount: Estimates between 600 and 900 million francs per year

The European Parliament expressed its support for the new regulation on the coordination of social security systems, registering 511 votes in favour, 87 against and 61 abstentions in Strasbourg. The reform, which has been in the works for over a decade, proposes the transition from the 'Lex Loci Domicilii' criterion to that of the 'Lex Loci Laboris'. Specifically, the burden of unemployment benefits for frontier workers should fall on the country of last employment rather than the country of residence. For the Canton of Ticino, this scenario would entail a radical change: Switzerland, as a State of employment, would no longer limit itself to reimbursing benefits, but would have to take direct responsibility for the payment of benefits for workers (with G permit) who lose their jobs. The Secretariat of State for the Economy (SECO) has pointed out that, although the EIA

Operational details

The current situation sees Switzerland reimbursing the countries of residence for the benefits paid to unemployed frontline workers. According to the SECO, in the previous year, the reimbursements to neighboring states amounted to 283.3 million Swiss francs, distributed as follows: 226.5 million to France, 29.3 million to Germany, 21.1 million to Italy, and 6.4 million to Austria. Despite these outflows, the Swiss unemployment fund registers revenues of approximately 600 million Swiss francs from contributions paid by frontline workers, generating an estimated annual surplus of around 300 million Swiss francs. The adoption of the reform would completely balance this financial situation. Daily estimates, although not officially confirmed by the SECO, suggest additional costs between 600 and 900 million Swiss francs annually for the Swiss unemployment funds.

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Key points

In the meantime, while the issue is not yet officially on the agenda of the Mixed Committee Switzerland-EU, workers must continue to refer to the current regulations in effect. The procedure for those who lose their job remains linked to their country of residence, which grants the allowance based on contributions paid in Switzerland and certified by the employer. There are no operational changes for the citizen at this time. However, the evolution of the debate requires constant attention to the dynamics between Bern and Brussels. For those working in Ticino, the management of their insurance position is a fundamental aspect that requires a correct understanding of the functioning of social benefits.

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