EU regulation hampers cross-border workers’ home office ambitions

Many Swiss companies and staff would like to continue or extend the work-from-home experience; but an EU regulation may hamper efforts for cross-border workers. Keystone / Sebastian Gollnow

The coronavirus pandemic has instigated a work-from-home culture with many employees wanting to extend the experience. However, as lockdowns ease cross-border workers at Swiss firms may be hamstringed by the return of a strict European Union regulation.

This content was published on June 26, 2020 - 16:15
Sylvie Belzer, RTS

The pandemic has caused many people to rethink their so-called home office situation. According to a survey in May, half of the Swiss labour force worked from home during the lockdown. Many Swiss companies and staff would like to continue or extend the work-from-home experience. In the future it will be up to employers to decide and put the necessary safety measures in place.

However, the conditions imposed by the EU risk acting as a brake for cross-border workers in regions like Geneva, which borders with France, Swiss public radio (RTS) reports.

The reason is that beyond a certain threshold, different tax and social security rules apply if an employee is domiciled abroad. This has an impact on the estimated 330,000 cross-border workers employed at Swiss-based firms but who live in France, Italy, Germany or Austria.

The EU regulation in question was suspended during the coronavirus crisis, but observers say this is likely to be short-lived.

“For now, companies and employees are subject to an emergency regime. But as soon as this regime is over, we will return to the rules that are applicable in this area,” Olivia Guyot-Unger, director of the legal service at the Federation of Businesses in French-speaking Switzerland (FER), told RTS on June 22.

“That means that anyone who works 25% or more of their hours at home in a country other than Switzerland will be subject to that regime and the social security system of their country of residence.”

Geneva business

Geneva, which employs some 87,000 cross-border workers from France, is especially affected.

“Depending on the profession, teleworking is not possible. But for other professions that we have, you could imagine two or even three days a week working from home,” said Claude Devillard, boss of Geneva-based Devillard SA, which provides documentation and printing services.

“But we won't be able to do that with cross-border workers: it's not possible, because social security charges in France are three or four times higher than in Switzerland.”

These additional staff costs are simply inconceivable for companies that have taken a huge economic hit due to the pandemic.

Uncertainty

“This European regulation is not a new problem,” explained FER Director General Blaise Matthey. “Fortunately this regulation was suspended… the situation is being monitored on a day-to-day basis, and there is still a lot of uncertainty as to how long the suspension will last.”

As the pandemic has affected neighbouring countries in Europe, “there is a chance that Europeans will realise that their regulation is not adapted to the reality of teleworking”, said Matthey.

“Hopefully we can manage to soften the measure in place, but I’m not sure to what extent,” he added.

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