The cabinet says it will not extend a ban beyond September forbidding asylum seekers from working during their first year in Switzerland.
The government said there was no longer a legal basis for the ban due to the decreasing number of people applying for asylum.
The ban came into force last September in reaction to a large rise in asylum requests. At that time, thousands of people sought refuge in Switzerland from the war in Kosovo. The government responded by drawing on a provision in Switzerland's asylum laws limiting the rights of asylum seekers in emergency situations.
The ban was aimed at making Switzerland less attractive to asylum seekers. However, a government spokesman said on Tuesday that it was impossible to say whether it had the desired effect.
The previous regulations, banning work during the first three months, will come back into force on September 1.
swissinfo with agencies