News and current developments on work and residence permits - June 2018 - 2
21 June 2018
Combatting wage pressure and illegal employment
Controls in 2017 were performed at a very intense level. As part of the measures to act against illegal employment, the number of company controls remained constant compared to the previous year, however the number of controls specifi cally on persons increased. This is highlighted in the State Secretariat for Economic Affairs (SECO) reports on the implementation of the accompanying measures on the Free Movement of Persons between Switzerland and the EU and the enforcement of the Federal Act against illegal employment.
Controls to avoid excessively low wages
The accompanying measures ensure that the applicable wage and working conditions in Switzerland are achieved. This prevents abusive undercutting of Swiss wage and working conditions and guarantees fair competitive conditions for Swiss and European companies.
Compliance with the mandatory regulations is controlled on site by cantonal labour market inspectors. For this purpose, each executive body is obliged by the SECO to achieve certain annual control objectives.
The implementation of the accompanying measures is enforced by the cantonal tripartite commissions (for sectors without collective labour agreements) and by the cantonal joint commissions (for sectors with collective labour agreements GAV).
The results of the accompanying measures in brief:
- 170’000 persons and around 44’000 companies were controlled by the cantonal joint and tripartite commissions
- 7 % of all Swiss employers, 36 % of all posted workers and 33 % of selfemployed service providers from the EU/EFTA were inspected
- 6 % Increase in control volume compared to previous year
- 1’935 violations of mandatory wage and working conditions as a result of the 8’036 controls carried out in the posting area
- A slight increase in wage undercutting among controlled Swiss employers and controlled posting companies
- More than 70 % of all wage undercutting in the cantons of Zurich, Ticino and Geneva
- 2’645 fines and 975 service bans imposed
How to combat illegal employment in Switzerland
The Federal Law against undeclared work protects the interests of employees and combats distortion of competition between companies. As part of the measures against illegal employment, employers, employees and self-employed persons are monitored for compliance with the reporting and authorization requirements of social security, aliens act and withholding tax law. The continuing measures taken against undeclared work have been established over the past ten years and are coordinated and risk-based according to the SECO and despite the federal structure. In addition to carrying out controls, the relevant cantonal bodies also perform coordination tasks. Any violations and suspicious cases reported to the controlling body are forwarded to the responsible special authorities such as the social security or tax authorities for detailed clarification.
The results of the controls on undeclared work in brief:
- The company controls have remained constant at 11’971 controls
- Checks on persons increased by 2 % to 36’072
- Overall in Switzerland, 12 % fewer suspicions of illegal employment work were reported
- The cantons received CHF 1.2 million in fees and fines
- 10% decrease in feedback from special authorities on measures taken and sanctions imposed on cantonal control bodies
- Social security law 592 cases (-24 %)
- Aliens Act 1’919 cases (-2 %)
- Withholding tax law 523 cases (-18 %)