Unemployed cross-border workers cost too much: controversy is mounting in France

There are almost 230,000 French cross-border workers employed in Switzerland. cross-border workers fran Keystone / Jean-Christophe Bott

The female and cross-border workers left without work in Switzerland weigh too heavily on the French unemployment fund: this is the alarm raised by the employers and some elected representatives, who ask Paris to intervene, for example by asking to change the rules in force and calling on Bern to contribute moreover.

This content was published on October 18, 2024 – 3:54 pm

The European rulesExternal link regarding unemployment insurance – which by virtue of the free movement agreement also apply to Switzerland – are clear: in the event of loss of employment, a cross-border worker receives the allowance from the country in which he resides and not from the one in which he was active, despite paying contributions to the treasury of this State. The country in which he was employed corresponds three to five months of unemployment benefit to the state of residence.

However, the amount is sometimes not enough. According to one studioExternal link published at the beginning of October by Unédic, the association responsible for managing unemployment insurance in France, the sums paid to cross-border workers left without work far exceed what they received from the countries in which they were employed.

A deficit of nine billion

For example, in 2023 alone, Unédic spent one billion euros on unemployed cross-border workers, compared to a total reimbursement of 200 million. If only the people who were employed in Switzerland are taken into account, the extra cost – i.e. the difference between what was paid by the French State and the reimbursements received from the Confederation – was 157 million (720 million in allowances paid compared to 157 million in reimbursements received ).

From 2011 to 2023, the accumulated deficit was nine billion, of which over six billion were attributable to Switzerland.

The data should not be surprising. Of the 445,000 people who worked in a neighboring country, almost half (215,200) were employed in the Confederation in 2023. And out of the 77,000 unemployed people compensated in France in 2023 under the law applied to cross-border workers and cross-border workers, almost 47,000 previously practiced their profession in Switzerland.

But the figures that matter most are others. Given the higher salary received abroad, the unemployed cross-border person costs more than those who were employed in France. In 2023, the average monthly allowance in the first category was 2,299 euros. A figure that rises to 2,670 euros if only “Swiss” cross-border workers are considered, compared to an average of 1,265 euros for all French unemployment benefit beneficiaries. And above all, “in the case of cross-border workers resident in France, the duration of compensation far exceeds the maximum five months reimbursed by the country of employment”, notes Unédic, without providing detailed figures.

Changing the rules

Faced with the chronic deficit of the French state budget, many have asked to change the rules to reduce the difference between the reimbursements received and the sums actually disbursed.

At the microphones of the Radio and Television of French Switzerland RTS, the Republican MP Virginie Duby-Muller, elected in the constituency of Haute-Savoie, he askedExternal link that the European agreement on the matter – which she defined as “unfair” – be renegotiated so that Switzerland contributes more to financing unemployment.

Even before the publication of the Unidéc study, other parliamentarians from the border region with Switzerland had made similar proposals, according to the Geneva TribuneExternal link.

The Mouvement des entreprises de France (Medef), the main French employers’ organization, did the same. “In the long term – we read in the missiveExternal link sent to Prime Minister Michel Barnier at the beginning of the month – we propose to establish a simple principle: the person who employs must pay the benefits. This should take the form of a simple, fair and balanced coordination mechanism between states, requiring the state that collected the contributions to pay unemployment benefits.”

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A proposal to revise the European regulation is on the table in Brussels. The idea is to make the Member State that received the contributions responsible for paying unemployment benefits when the person has worked there for at least one year. If this reform actually passes – but nothing is to be taken for granted as the consent of the member countries is necessary – the measure will however not apply directly to Switzerland. First, in fact, the new regulation will have to be examined by the Swiss-EU Joint Committee on Free Movement. In short, a lot of water still has to pass under the bridge.

Reduce allowances for cross-border workers

Another option put forward by some economists is to reform the French unemployment system for cross-border workers.

For example, modifying the compensation calculation model to better take into account the level of the average salary in France. In this case, those who would pay the price of a possible reform would be the former unemployed cross-border workers.

What about Italy?

If in France some are making a loud statement, in Italy for now everything is silent. This is because the situation – observes Andrea Puglia, head of the cross-border office of the OCST (Ticino Christian Social Organization) union – is profoundly different.

While in France an unemployed person can receive up to 6,200 euros per monthExternal link depending on the salary he previously had, in Italy the maximum ceiling is set at 1,550 euros in 2024, with a progressive reduction starting from the sixth month.

There are no figures on a possible deficit between what was reimbursed by Switzerland and what was paid by Italy, since as Andrea Puglia points out, the National Social Security Institute does not distinguish between cross-border workers and non-border workers. However, one thing is certain: given the differences regarding the maximum ceiling, even if a former cross-border worker were to remain unemployed for a longer period than the 3-5 months reimbursed by Switzerland, the cost for Italian coffers is much lower if compared to France.

Then there is another factor that has a strong impact: “The typology of cross-border workers who become unemployed is different compared to France – continues the OCST manager. They tend to be people who work in sectors where they quickly find employment.” In other words, Swiss reimbursements are often enough to compensate for the outgoings of the NASpI (New Social Insurance for Employment).

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A law that has remained a dead letter for now

Even in Italy, however, things could change. There ratification lawExternal link relating to the tax agreement with Switzerland on cross-border workers approved by the Italian Parliament provides that this category of workers is entitled to an amount of unemployment “calculated for the first three months in proportion to the amount payable pursuant to Swiss legislation”.

+ Find out more about how unemployment insurance works in Switzerland

The measure should have come into force at the beginning of 2024, but for now everything is at a standstill “in the absence of a specific agreement between Italy and Switzerland on the mechanism for reimbursement of these amounts”, explains Andrea Puglia.

Bern would not have digested the fact that Rome has implemented a new unemployment measure that would fall solely on the shoulders of Switzerland without first discussing it.

Affaire à suivre, in short, but the consequences for the Confederation could be important even if – as the OCST trade unionist further points out – “Switzerland collects millions of contributions from cross-border workers [per l’assicurazione disoccupazione] without necessarily having to give them back.”

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