The Swiss Federal Council has reacted to the high number of Croatian workers who have entered the Swiss labour market since the beginning of this year and has decided to invoke the ‘safeguard clause’ for Croatia. Therefore, as of 1 January 2023, Swiss employers will be required to make sure that a work permit is granted to Croatian nationals before they take up employment in Switzerland. For Swiss employers this will mean longer processing times for Croatian workers and a possible impact on planned start dates in 2023.
Background
Since 1 January 2022 Croatians have been granted full freedom of movement and full access to the Swiss labour market; this meant they were no longer subject to labour market testing or work permit quotas.
Between January and October 2022 Switzerland issued 2,413 B permits to Croatian nationals. This number exceeds the legally agreed threshold and therefore the Federal Council has invoked the so-called safeguard clause. The safeguard clause is an instrument which allows Switzerland to reintroduce quotas for a limited period of time if a legally defined threshold for workers from a specific country is exceeded.
The main purpose of the clause is to keep the level of immigration in line with economic needs. The clause has been activated in the past several times for other EU countries that were granted full freedom of movement in Switzerland when the defined threshold was exceeded.
The swift recovery of the Swiss economy from the Covid pandemic has caused the number of foreign workers in Switzerland, including Croatian nationals, to increase steadily. Most Croatian nationals are employed in manufacturing and construction but there has also been strong demand for Croatian workers with higher qualifications in areas such as consulting, IT and planning services.
Implications for Swiss employers
As of 1 January 2023 Swiss employers seeking to hire Croatian nationals will have to plan ahead and make sure relevant immigration approvals are in place before an employee can take up employment in Switzerland. Previously the individual was entitled to start working as soon as registration with the appropriate communal authorities was completed.
Due to this additional step, the processing time for Croatian nationals could take up to 4-8 weeks. Employers will therefore have to allow for these longer processing times when planning to hire Croatian nationals.
Another consequence is that employers will face additional financial costs related to the new application process.
Quotas in 2023 for Croatian nationals
For the year 2023 the number of available B permits will be set at 1,150 while the number of L permits has been set at 1,007. By comparison, in 2021 the number of available quotas for B permits was limited to 250 while the number of L permits was higher, at 2,000.
Deloitte’s View
With the reintroduction of quotas employers will face additional administrative and financial implications. Although the number of B quotas for Croatians is higher in 2023 than in the years before 2022, it is expected that the new regulation will have some impact on the currently challenging general shortage of skilled workers in the Swiss economy.
Conclusions and recommendations
Swiss employers seeking to hire Croatian nationals in 2023 will have to plan ahead and secure the work permit approval prior to the individual’s start date in Switzerland. It is likely that they will have to file an application with the migration authorities in charge of issuing the approval. Approval from the labour market authorities will not be required. The additional step will increase the processing time and, in combination with the changed availability of quotas, could also have an impact on planned start dates in 2023.
Above all, employers in manufacturing, construction, consulting and IT, whose demand for Croatian workers has been high, must be aware of the revised process and costs related to the hiring of Croatian nationals and plan accordingly.
If you would like to discuss this topic, please do reach out to our key contacts below:
Key contacts
Jehona Islami
Director, Immigration
Aysun Inceleme
Manager, Immigration
