10th September 2018
As an international contractor management company, 6CATS knows that agencies which place contingent professionals in developed financial centres, such as Switzerland and Luxembourg, often come up against additional challenges. In fact, our expert insight into these issues was recently featured in The Times’ Raconteur supplement. Here’s what recruiters need to be aware of.
Know your stuff: Switzerland
Switzerland has a complex multi-layered structure comprising 26 cantons – each of which is a different member state of the Swiss Confederation. Crucially, all of them have differing employment and tax legislation. This is certainly something which recruiters will need to bear in mind when negotiating pay with a contractor and client. As the applicable legislation will change depending on which canton the employee lives in, something as simple as a change of address can create a huge amount of extra regulatory work.
Additionally, some cantons are deemed more desirable than others which means an organisation’s physical location can add to or detract from their attractiveness as an employer. Consequently, agencies might find it more difficult to place contractors in certain areas.
There are also ongoing issues in the destination in terms of accessing work permits. Foreign nationals need B permits if they are to reside in Switzerland for longer periods, but these are limited to an annual quota which is released quarterly. When this is used up, an application must be made for an allocation from a Federal Reserve. However, in recent times this has not been forthcoming, leading to big businesses reconsidering their location and sometimes leaving a canton altogether. Of course, this can be very frustrating for agencies trying to place professionals on longer contracts.
Know your stuff: Luxembourg
Luxembourg is home to the village of Schengen – a symbol of the freedom of movement of goods and people. It is no coincidence that the roundabout next to the Schengen monument has exits which lead to two other countries – France and Germany. Like Switzerland, its workers enjoy good rates of pay, but also face similarly high costs of living. As a result, businesses in both destinations have large numbers of ‘frontaliers’ who travel to work from France and Germany where it is cheaper to live. The fact that Switzerland and Luxembourg use multiple languages is another candidate attraction tool and something which facilitates this movement. However, recruiters will need to be clear which language clients are going to expect contractors to communicate in.
Another key selling point for agencies placing contractors in Luxembourg is that the country provides significant benefits to employees who have children, offering generous family allowances. Consequently, firms placing professionals in the destination need to make sure that workers are aware of all of the financial incentives that are available to them.
It’s complex, so use a partner
There’s no doubt that working in each of these global financial hubs brings an array of benefits for contractors, but businesses placing these professionals are operating in a complex legislative environment. Consequently, we strongly recommend partnering with an expert. This peace of mind will be invaluable, particularly when it comes to encouraging contractors to register with you. To find out how 6CATS can work with you in order to give you and your contractors legally compliant advice, contact us today.