The Swiss government wants to raise fines against companies which contravene agreed minimum salary levels. However, it has decided to shelve plans to extend collective bargaining agreements.

The measures are part of a package, put forward last September, to improve protection of workers in Switzerland under increasing pressure following the introduction of the free movement of people with the 28-nation European Union over the past ten years.

Economics Minister Johann Schneider-Ammann said the government, the trade unions and the main employers organisations agreed to postpone the plans.

He argued the move was logical. “We are not reneging on promises,” he told a news conference on Wednesday.

Switzerland and the EU first had to solve differences over the implementation of immigration caps in the wake of a controversial voters’ decision in February 2014, he said.

However, Schneider-Ammann said the cabinet had decided to ask parliament to increase fines for firms that commit abuses from CHF5,000 ($5,200) to up to CHF30,000.

Moonlighting

In a related move, the government wants to step up cooperation between the federal and the cantonal authorities to fight moonlighting in the labour market.

Illegal work practices made up around CHF45 billion last year, about 7% of Switzerland’s gross domestic product, according to officials.

Schneider-Ammann said the proposals would not lead to more bureaucracy, but increase the chances of combating abuses.

The cabinet is also proposing a reform of tax breaks for companies in remote regions of the country in line with the EU and the Organisation of Economic Co-operation and Development (OECD).

The measures, to be submitted to a consultation procedure among political parties, cantons and organisations, focus on limiting tax reductions and improving transparency.

Schneider-Ammann said the package of measures was aimed at improving the competitive edge of Switzerland’s economy.

“We want to strengthen Switzerland’s position as a business hub and keep jobs in the country,” he said.

The official unemployment rate currently is 3.5%.

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