Border Workers Unemployment Reform: Gobbi Stops Dangerous Trends

Context

In brief

The EU's reform on cross-border workers' unemployment could cost Switzerland between 600 and 900 million francs a year, with the canton of Ticino particularly exposed. Councilor of State Norman Gobbi has invited the Federal Council to protect Switzerland's interests, as the reform would abolish the current system of reimbursement from the state of the last employment to the state of residence.

Key facts

• What: EU's reform on cross-border workers' unemployment
• When: Ongoing
• Where: European Union
• Who: Norman Gobbi, Lega councilor of State
• Amount: Between 600 and 900 million francs a year

Councilor of State Norman Gobbi has expressed his concerns about the ongoing reform of the European Union on the competence for granting unemployment benefits to cross-border workers, in an interview published in the Sunday Morning. If approved, the reform could have significant financial consequences for Switzerland, with the canton of Ticino being particularly affected.

Currently, in case of unemployment of cross-border workers, the state of residence is responsible for paying the benefits. However, the proposed revision of regulation 883/2004 of the EU provides that the state of the last employment should grant the unemployment benefit to cross-border workers. The State Secretariat for Economic Affairs (SECO) has estimated that the additional costs for Switzerland could range between 600 and 900 million francs a year.

The canton of Ticino, thanks to its border position, is particularly exposed to the phenomenon of letterbox companies, i.e. companies that transfer their legal seat to Switzerland to take advantage of the unemployment benefit system. The risk is that of encouraging short-term contracts or artificial employment relationships, solely for the purpose of obtaining Swiss unemployment benefits. This could lead to an increase in costs for Switzerland, without a corresponding benefit for cross-border workers.

Gobbi commented that the reform could generate dangerous distortions, creating a disparity in treatment between unemployed residents in Ticino and those in other Swiss cantons. Furthermore, he stressed that Switzerland must be able to defend its interests without suffering automatisms or indirect impositions. Relations with the European Union must be based on mutual respect and not on political pressure logic.

The EU's reform on cross-border workers' unemployment could have significant financial consequences for Switzerland, with the canton of Ticino particularly exposed. It is important that the Federal Council protects Switzerland's interests and finds a balance between respect for European rules and the protection of cross-border workers and Swiss taxpayers.

Operational checklist for Ticino municipalities

To prepare for the possible consequences of the EU's reform on cross-border workers' unemployment, Ticino municipalities may consider the following actions:

1. Monitor closely the development of the reform and the decisions of the European Union. 2. Collaborate with cantonal and federal authorities to evaluate the impact of the reform on the canton of Ticino and the municipalities. 3. Analyze your own budgets and resources to understand how the financial situation of the municipality could be affected. 4. Consider possible measures to mitigate the negative effects of the reform, such as promoting active labor market policies or collaborating with other authorities to find innovative solutions. 5. Communicate transparently with citizens about the possible impacts of the reform and the measures taken to address them.

Operational details

Implications for Cross-Border Workers 💡

The proposed reform on unemployment benefits for cross-border workers by the European Commission may have concrete consequences for those working in Switzerland and residing in Italy, particularly in the Canton of Ticino. If the proposal to revise the EU Regulation 883/2004 is adopted, cross-border workers who lose their job in Switzerland may be required to apply for unemployment benefits to the state of their last employment, rather than their country of residence.

This could lead to increased complexity in applying for benefits and a possible delay in their provision. For example, a cross-border worker residing in Lugano who loses their job in Switzerland may need to apply to the Swiss Social Insurance Office, rather than the Italian National Institute of Social Security. This could result in increased bureaucracy and a delay in the provision of benefits, which in Switzerland amount to approximately CHF 150 per day, while in Italy the amount varies depending on the region of residence.

Furthermore, the reform may increase costs for Switzerland, with potential repercussions on the country's economy and, consequently, on the employment of cross-border workers. For instance, according to the Federal Department of Economy, Education and Research, cross-border workers account for approximately 10% of the workforce in Switzerland. An increase in costs for Swiss companies may therefore lead to a reduction in employment for cross-border workers.

It is essential that cross-border workers closely follow the evolution of the situation and prepare for any changes. In any case, it is crucial that cross-border workers inform themselves about the applicable regulations and their rights regarding unemployment benefits, both in Switzerland and their country of residence. We recommend consulting the website of the Federal Office for Social Security (UFSP) or the Italian National Institute of Social Security (INSS) for detailed information.

In addition, cross-border workers may consider taking out an unemployment insurance policy, which could cover expenses in the event of job loss. However, it is essential to verify the policy's conditions and ensure that it covers cross-border workers working in Switzerland.

Finally, cross-border workers may consider diversifying their sources of income, for example, by starting their own business or investing in financial activities. This could help mitigate the risk of job loss and ensure greater financial stability.

In any case, it is essential that cross-border workers remain informed about the situation and closely follow the evolution of the reform. The reform on unemployment benefits for cross-border workers may have concrete consequences for many people's lives and may change the working situation of many cross-border workers. It is essential to be prepared and consider all possible options.

Useful planning tools

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Key points

What to do if you are a cross-border worker

The reform on unemployment for cross-border workers is a hot topic for those working in Ticino and living in Italy. If you are a cross-border worker and fear being affected by this reform, we advise you to closely follow the evolution of the situation, keeping in mind that the reform is still in the discussion phase. The reform, indeed, provides for the introduction of a Swiss contribution to unemployment for cross-border workers, but the modalities and details are still the subject of discussion among parliamentarians.

It is also important to inform yourself about your possibilities of requesting unemployment benefits, both in Switzerland and in the country of residence, and about the times and modalities of payment. For example, in Switzerland, unemployment benefits are managed by the cantonal unemployment insurance funds and the amount depends on the contributions paid and the duration of unemployment. In Italy, on the other hand, unemployment benefits are managed by INPS and the amount depends on the type of contract and the duration of unemployment.

It is also important to regularly check your health status and ensure you have adequate insurance coverage. In case of illness or injury, indeed, insurance coverage can be fundamental to guarantee the continuity of income.

Finally, it may be necessary to consider the possibility of looking for work in Italy or of returning to live in the country of origin, if the situation so requires. For example, according to the data of the Federal Office of Statistics, in 2020 the number of cross-border workers in Ticino was around 80,000, but the number of workers who have lost their job due to the pandemic has been significant. In this case, it may be necessary to evaluate the possibility of returning to live in Italy and looking for work in your country of origin.

To help you evaluate your possibilities and make informed decisions, we invite you to consult our tax calculator. The calculator will help you evaluate the impact of the reform on your tax situation and understand your options in case of unemployment.

Furthermore, we advise you to closely follow the news on the reform and to actively participate in the discussion, for example through the associations of cross-border workers. For example, the association Frontalieri Ticino has organized different demonstrations to protest against the reform and to ask for more clarity on the modalities of payment of unemployment benefits.

In any case, it is important to remember that the reform on unemployment for cross-border workers is a complex and evolving issue. We advise you to stay informed and to carefully evaluate your options to ensure your financial and professional security.

Source: ticinonews.ch