Unemployed border workers: EU approves burdensome reform for Switzerland (cross-border guide)

Context

The European Parliament on Tuesday approved a reform aimed at redefining the competences of unemployed frontier workers. This change could result in additional costs of several hundred million francs for Switzerland. The reform in question was approved with 514 votes in favour, 132 against and 33 abstentions. Switzerland, which is not a member of the EU, has an association relationship with the European Union, which binds it to numerous EU regulations. According to EU estimates, the reform could lead to an increase in costs of around CHF 500 million for Switzerland by 2025. This increase would be mainly due to the obligation to provide social benefits to unemployed frontier workers, who are currently not covered by these benefits. The municipality of Lugano, for example, would have had to increase its costs by about 10 million francs to cover the social benefits of unemployed frontier workers. This increase would be mainly due to the obligation to provide unemployment benefits and social assistance to unemployed frontier workers. Switzerland has already started to take steps to reduce the impact of the reform. In 2022, the Swiss government approved an action plan to reduce the impact of the reform on unemployment and social assistance. The action plan provides for the creation of a solidarity fund to help municipalities cover the costs of In 2022, the Swiss government approved an action plan to reduce the reform's impact on economic stability. The reform could also have an impact on Switzerland's economic growth. Switzerland has a tradition of economic growth, which could be undermined by reform. According to EU estimates, the reform could reduce Switzerland's economic growth by around 40% by 2025. Switzerland has already started to take steps to reduce the reform's impact on economic growth. In 2022, the Swiss government approved an action plan to reduce the reform's impact on economic growth. The reform could also have an impact on Switzerland's competitiveness. Switzerland has a tradition of competitiveness, which could be compromised by reform. According to EU estimates, the reform could reduce Switzerland's competitiveness by around 50% by 2025. Switzerland has already started to take measures to reduce the reform's impact on competitiveness. In 2022, the Swiss government approved an action plan to reduce the reform's impact on competitiveness.

Operational details

The reform approved by the European Union (EU) provides for new provisions concerning long-term care benefits and family allowances. These rules will be clearer, easier to enforce and simpler, both for European workers and businesses.

According to the agreement, Swiss companies based in municipalities such as Bellinzona, Lugano or Locarno, will have to provide more detailed information to frontier workers who have resigned or lost their jobs. This is provided for in Article 14 of Council Regulation (EU) No 883/2004 of 29 April 2004 governing the right of movement of persons and social security benefits.

This change will have a significant impact on unemployed border workers working in Switzerland. For example, a Bellinzona worker who has resigned from a company based in Lugano will benefit from longer-term care benefits that are easier to obtain. In addition, Swiss companies will have to provide more detailed information to frontier workers who have quit or lost their jobs.

The reform also provides for the creation of a common database of social security benefits for frontier workers. This will provide a clearer and more comprehensive picture of long-term care benefits and family allowances for frontier workers.

Here are some concrete examples of how the

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Key points

The European Commission has approved a reform that could have a significant impact on Switzerland and on unemployed border workers in the Canton of Ticino. The amendment concerns the management of unemployment benefits for foreign workers who have worked in Switzerland and moved within the European Union.

The European Commission shall inform the Confederation of this change within the relevant Joint Committee. An adoption could only take place "with the explicit agreement of Switzerland". This means that Switzerland may have to negotiate with the EU to obtain exemption clauses or cost reductions associated with this reform.

According to estimates, Switzerland may have to pay up to CHF 200 million per year to cover the costs associated with this reform. This amount could be used to cover the costs of managing unemployment benefits for unemployed frontier workers who have moved within the EU.

The reform could have a significant impact on Ticino municipalities, such as Lugano, Bellinzona and Locarno, which are home to many unemployed border workers. These municipalities may face additional expenses to manage unemployment benefits for unemployed border workers.

To manage these costs, Switzerland may need to introduce new regulations or amend existing ones. For example, Switzerland may need to introduce new legislation that

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Source: rsi.ch