Agreement on the free movement of persons (FMPA)
FMPA
The Agreement on the Free Movement of Persons (FMPA) is an agreement between Switzerland and the European Union. The agreement provides that nationals of the European Union (EU) and the European Free Trade Association (EFTA) may, under certain conditions, enter Switzerland, take up residence there and engage in gainful employment.
Equal treatment
One of the provisions of Annex I of the FMPA stipulates that employees from EU and EFTA member states may not be treated differently from Swiss employees in employment relationships. This prohibition of discrimination is directly applicable between employers and employees. It therefore has a concrete impact on the employment relationship.
Equal pay
Under the FMPA, cross-border workers must not be treated differently in terms of pay than their Swiss colleagues. In principle, the employer may not invoke the increased purchasing power of cross-border workers to justify their lower wages. This principle also applies if the company is in an economic crisis, for example because of the strong franc.
The ban on discrimination also applies to bonuses and gratuities, even if the employer has reserved a wide margin of discretion in awarding them.
This agreement is intended to combat wage dumping. Measures have been taken since 2004 to accompany the free movement of persons. Employers who do not respect the minimum wage and working conditions can be heavily sanctioned.
Payment of wages in euros
Employers may be tempted, for various reasons, to pay the wages of cross-border workers in euros. In the event of an economic crisis, this may put them at a disadvantage compared with their colleagues paid in Swiss francs. In certain circumstances, payment of wages in euros will be contrary to the FMPA and unlawful.
In very specific circumstances, the Federal Court has ruled that cross-border employees who complained about receiving their wages in euros following the strong franc crisis were committing an abuse of rights.
Social security contributions
EU nationals living and working in Switzerland, cross-border commuters working in Switzerland, Swiss employees seconded to the EU: cross-border situations are becoming increasingly common. In practice, it is not always easy for the employer to determine which law applies and in which country he will have to pay social security contributions.
Accessory activity
When the employee holds several jobs in several FTAA member states, the question of social contributions is delicate. The main employer may, even if its headquarters are in Switzerland, be obliged to pay social security contributions in the employee's country of residence, under certain conditions.
A Swiss employer who wants to avoid being obliged to pay social security contributions under foreign law will have to take measures against the ancillary activities of his cross-border employees.
Posting
The aim of the FMPA is to make it easier to move within the European Union and EFTA. For this reason, the Agreement on the Free Movement of Persons expressly provides for the social security contributions to be paid by the employee when the employer sends him or her on an assignment in another Member State.
Internships
Many students from the European Union do internships in Switzerland, either to learn the language or to acquire new knowledge. They are also subject to the ALCP and must apply for a work permit. This application is simplified if the internship is only incidental.
Teleworking
Cross-border workers often have long and tedious journeys to their place of work. Teleworking can be a solution to relieve them and reduce absenteeism and delays. But beware! Above a certain rate, the employee may be subject to the social security contributions of the state in which he or she resides.