Firms face heavy fines over illegal workers

Employers who hire workers illegally face tougher penalties Keystone

Parliament has approved a raft of measures to combat illegal employment practices in Switzerland.

An estimated SFr40 billion ($32.1 billion) – or ten per cent of Gross Domestic Product – is earned by illegal workers.

The bill is aimed at curbing the black economy by introducing tougher sanctions against companies hiring workers illegally, thus evading taxes and social-security contributions.

The amendments, proposed by the cabinet in 2002, also pave the way for tougher controls by the authorities and special panels as well as closer cooperation between local offices.

On Tuesday the House of Representatives followed the Senate in backing the introduction of tougher fines for farmers who hire workers illegally.

Under the law they can be excluded from receiving state subsidies for a maximum of five years.

Both chambers also agreed to simplify administrative tasks for small companies.

No exception

The economics minister, Joseph Deiss, warned that farmers were not exempt from penalties faced by other employers such as construction companies.

All employers who employ workers illegally can be sentenced to five years in jail and a fine of up to SFr1 million.

The State Secretariat for Economic Affairs (Seco) estimates that illegal workers earn SFr40 billion a year. The state misses out on millions through lost taxes and welfare contributions.

A recent study showed that around 90,000 people live in Switzerland without proper authorisation, many of whom work illegally.

swissinfo with agencies

Key facts

The new law foresees fines of up to SFr1 million and prison sentences of up to five years in an effort to combat illegal work practices.
Construction companies also risk being excluded from state contracts.
Farmers face cuts to their state subsidies.