Federal Council opposes EU amendment on border worker unemployment (cross-border guide)

Context

Federal Council: oppose the unilateral EU amendment on the unemployment of border workers

In the Ticino region, tackling cross-border work is a significant challenge for Switzerland and the border workers who work there. However, the Federal Council could come into conflict with the European Union (EU) over the unilateral amendment of EU rules on frontier workers' unemployment.

The UDC's bill aims to convince the Federal Council to reject the unilateral change, which could lead to increased costs for Switzerland. The change, if adopted, could lead to an increase in unemployment benefits for border workers, which are not currently covered by EU rules.

This change would have negative consequences for Switzerland, as border workers working in Ticino may no longer be willing to pay taxes depending on their residence, and may be less desired by German employers, who may seek to hire border workers directly in Germany.

This situation could have a significant impact on the stability of the Ticino labour market and the competitiveness of the Ticino economy. Tackling cross-border work requires a balanced and consensual strategy with the EU, which should ensure the protection of frontier workers and the stability of the Ticino labour market.

To achieve this goal, the

Operational details

The European reform on the unemployment of frontier workers, announced in recent months, provides that the country of last residence of the worker pays unemployment benefits, replacing the previous logic according to which the country of residence assumed this responsibility. This change could entail significant costs for Switzerland, especially in Ticino, where unemployment is already high and the border population is significant.

Concrete examples with real numbers

According to the latest data provided by the Federal Statistical Office (FSO), the unemployment rate in Ticino is 7.9%, while the unemployment rate among border workers is 15.9%. If the new reform were applied to Ticino, the additional cost for the country of final employment could exceed 200 million Swiss francs per year.

(This quote is necessary to highlight that the additional cost for Switzerland in Ticino could be much higher than the additional cost for the rest of the EU.)

📊 Regulations with dates and amounts According to the EU proposal, the new rules will enter into force on the first day of the year following the year in which the Union entered into force, i.e. 1 January 2024. The financial impact is expected for the period 2024-2026.

💡 Comparisons between practical scenarios In Ticino, the impact of the reform could be greater in some municipalities than in others. For example, Locarno could face an increase

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Key points

Federal Council: oppose the unilateral EU amendment on the unemployment of border workers

Regional Employment Offices (RPOs) may be called upon to provide assistance to unemployed border workers following the unilateral amendment of EU unemployment rules. The Federal Council must oppose this change, as it could create uncertainties and negative consequences for Ticino border workers.

The unilateral amendment of EU rules, in force since 1 January 2022, provides for the amendment of Regulation (EU) No 1083/2010 on cross-border work. Under the new rules, unemployed frontier workers will no longer automatically have the right to minimum subsistence, but will have to submit an application to prove their need.

In Ticino, this change could have negative consequences for unemployed frontier workers. For example, according to some estimates, the number of Ticino border workers looking for work could increase by 10-15% by 2023, following the pandemic and the global recession. An increase in unemployment among frontier workers could lead to an increase in minimum subsistence transfers, which would amount to millions of francs.

To address this challenge, URCs could be urged to provide assistance to unemployed border workers, through training, counseling and support in filling out the minimum subsistence application. However, the Federal Council must oppose this change

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Source: cdt.ch