Pressure is mounting for the government to revise a work permit quota that triggered an outcry among big businesses in Switzerland like Google.
Faced with rising unemployment under the financial crisis the government decided in December to halve the number of annual short-term residence and work permits accorded for non-European Union nationals to 3,500.
The permits, typically valid for less than 12 months, are commonly used by international firms bringing in highly skilled staff for special projects. It is also used for people coming to study in Switzerland and contract jobs such as au pairing.
The move was followed by a wave of opposition from the cantons in charge of dishing out the permits to the various multinationals operating in the country.
Among the most vocal was Google, which said it was suffering a “drastic reduction” in specialist staff at its European research and development centre in Zurich.
The internet giant’s Swiss spokesman Matthias Graf said some projects would have to be moved overseas if the quota was not increased soon. Criticism was also mounting from within its United States headquarters.
A spokeswoman told swissinfo.ch the city was an international centre of technology for the Middle East, Europe and Africa region and as such needed to have access to a diversity of talent.
The company added that it was still committed to Zurich but it was important to be able to grow further within Switzerland and more permits had to be allocated.
Google is not alone. IBM has threatened to take similar steps. Consulting firm Accenture has put several projects on hold because the necessary IT specialists could not get into the country. UBS, Credit Suisse and Julius Bär also had trouble bringing in staff. The Employers’ Association of Banks in Switzerland says “important projects” are at risk.
The Swiss Employers Association called for the quota to be increased, saying a failure to do so would lead companies reliant on outside specialists to move and the economic recovery in certain sectors to be slowed or blocked.
The IT industry association Swico said many companies in the sector had been directly affected by the quota limits, already exhausted in many areas. “This is worrying, especially as the government advertises the area to attract foreign companies to come here,” said a spokesman.
Concerned, Swico wrote to the Federal Migration Office about the quota, and was told the cabinet was aware of the need for qualified specialists from outside Europe and that it would take the interests of the Swiss economy into consideration when deciding whether to increase the quota.
The cabinet is due to decide in June whether to raise the quota depending on the labour market and needs of Swiss companies.
But faced with the growing chorus of disapproval, Justice Minister Eveline Widmer-Schlumpf announced she would develop a working paper on the issue “as soon as possible” that would be presented to the cabinet for review beforehand.
The government’s move was equally slated by cantons when it came into force nationally in 2010. In February a cross-cantonal body of economic representatives also wrote to Widmer-Schlumpf to urge the limits be lifted.
The conference of cantonal directors of economy expressed concern that the decision was taken without prior consultation with cantons, businesses and trade unions and said the move could have a “very dramatic impact” on the economy and “adversely affect” Switzerland’s status as a business location.
Vaud was one canton to write to the government in protest as soon as the short-term permits were halved.
“We consider it a decision taken outside of the provisions of the law,” François Vodoz, of the canton’s employment service, told swissinfo.ch.
“The cabinet should have consulted the cantons and social partners. It did not.
"It is a decision that fundamentally penalises the economic development of businesses, penalises cantons’ economic dynamism, and is contradictory to all the options taken at a federal level for the economy.”
He said Vaud’s allocation of around 140 short-term permits for 2010 was used up by mid-January. Although it has been able to apply for more permits in small batches, it has been unable to meet demand from businesses.
He noted that Vaud had experienced economic growth in the canton in the past year and created more jobs and there was therefore a significant need for more permits.
“It is clear that for us it is a hold-up. Overall, all sectors have been affected by this reduction. I think the situation is the same in all cantons in Switzerland that have a certain dynamism.”
“Generally speaking these permits are for people who are highly qualified and who bring great value – economically, scientifically or in terms of skills – to Switzerland and who in general generate other work, and do not take the place of any Swiss." he said.
"There is no connection to unemployment problems. This link was purely political and is not based on any concrete economic aspect.”
Jessica Dacey, swissinfo.ch
The jobless rate decreased by 0.2 per cent to 4.2 per cent in March 2010, according to the State Secretariat for Economic Affairs (Seco).
It is the biggest March decrease in three years. Just over 166,000 people were registered as unemployed. Most are foreigners.
The jobless rate among younger people dropped significantly to 4.8 per cent in March compared with February.
Seco said certain sectors of the industry were recovering faster than others.
The government expects the economy to grow by 1.4 per cent in 2010, an improvement on its earlier forecast of 0.7 per cent.
Work permit rules
Switzerland has a dual system for granting foreign nationals access to the Swiss labour market.
People from EU or Efta member states, regardless of their qualifications, are granted easy access to the Swiss labour market under the Agreement on the Free Movement of People.
Workers from all other states – third states, as they are referred to – are admitted in limited numbers to the labour market in Switzerland, if they are well qualified.
Third state nationals may only be admitted if a person cannot be recruited from the labour market of Switzerland or another EU/Efta member state.
Priority is given to Swiss citizens, foreign nationals with a long-term residence permit or a residence permit allowing employment, as well as all citizens from those countries with which Switzerland has concluded the Free Movement of People Agreement.
Generally, specialists and other qualified employees are admitted.
Acting outside the law
Among those applying for the short-term permits are au pairs who can stay in the country for up to a year.
In several cantons the annual quota for au pairs from outside the EU was used up within a few weeks.
Julia Steiner, who runs a state-approved au pair agency in canton Vaud, was told in mid-January there were no more permits available. The upshot, she says, is that families desperate for au pairs are being forced to act outside the law.
“In families where both parents work, their only option is to take illegal girls without a permit,” she told swissinfo.ch.
Steiner, like other au pair agents, says the limits are penalising families and argues that au pairs should be entitled to a different permit as they are not like other short-term workers.