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Income and tax UN consultants could fall below poverty line

The main building of Palais des Nations (European headquarters of the United Nations)

Around 9,500 staff work for the United Nations in Geneva, including many consultants

(Keystone)

After years of administrative uncertainty, short-term employees at the United Nations in Geneva are now being told to pay Swiss taxes or face fines. Consultants say that may send some of them below the national poverty line, if that’s not already the case. 

“To me, the UN was my dream job, but for years now, it has become a vicious cycle of difficulties,” Laila* (not her real name) explains. 

The 38-year-old came to Geneva three years ago after receiving an H-type permit, accorded to international consultants, for a three-month position at the United Nations Institute for Training and Research (UNITAR) that paid CHF2,000 ($2,015) a month. 

As a non-European, non-North American national, she says she took the risk of staying illegally in Switzerland after her contract expired awaiting the next UN opportunity. Like many other consultants working at the global body in the Swiss city, her goal was to obtain a full-time position and play her part in bettering the world. 

Being employed as a consultant at the UN is “where you pay your dues, earning less perhaps, but you then gain a desired position”, explains Adrian Marti, director at Cinfo, a Swiss-based group that helps place applicants in humanitarian aid organisations. 

A 2014 studyexternal link by the UN’s Joint Investigative Unit (JIU) revealed that the employment of consultants by the UN is widespread, with such short-term hires representing over half of the total workforce in some agencies. 

Since her first UN job, Laila has taken up several other consultancy positions at various other agencies, including one- to three-month contracts at the World Health Organization (WHO) and the UN Office at Geneva (UNOG), which paid CHF2,000-2,500, before being “upgraded” to CHF3,000 for three months. She currently organises international conferences and e-learning courses and coordinates publications for one of the UN agencies, and is back to earning CHF 2,000. 

Her current post, she claims, is comparable to a so-called P3 level position at the UN, given her earlier experience in diplomacy and the private sector. According to the UN pay scaleexternal link and post calculatorexternal link, that job level would earn at least USD8,606 per month net of pension and medical insurance benefits. 

Like permanent staff

According to a recent survey conducted by Public Service International (PSI),external link a global union federation, 63% of UN consultants perform tasks similar to permanent staff, and 96% of them work full time for a single agency. 

The study also showed that one in ten consultants in Geneva – one of the most expensive cities in the world - earn salaries less than CHF3,000 a month. This rises to three in ten if you include everyone earning CHF4,000 or less. 

Switzerland defines poverty as a monthly income of under CHF2,247 a month for single-person households and CHF3,981 for a household with two adults and two children. 

in depth The ‘capital of peace’

Geneva is known as a hub for dozens of international organisations, the United Nations and over 380 non-governmental agencies.

Meanwhile, the study noted that the average entry-level salary for an advertised professional staff position at the UN in Geneva – P2 in UNOG jargon and comparable to the level at which consultants begin at the UN -  is $81,372 tax free and net of any benefits. After deducting income tax from consultants’ salaries recorded in the PSI survey, over half of consultants fall below that salary level.

‘Uber-ising’ UN jobs 

“This as an ‘uberisation’ of jobs at the UN,” says Ian Richards, the head of the UN staff association. 

Richards, who is employed at the UN Conference on Trade and Development (UNCTAD), continues: “UN organisations find it cheap and easy to hire these type of employees, meaning they have supervisors, they come to work every day, doing different tasks assigned to them.” 

But they do not receive benefits, such as paid vacation, parental or sick leave, or social security.

Ed Flaherty, a lawyer specializing in labour disputes at international organizations, explained that unlike salaries for international civil servants, remuneration for short-term hires is not determined formally through “post adjustments” according to job locations. 

Salaries, he said, could vary between international organisations, but are arbitrarily determined, according to “whatever the market could bear”. 

Alessandra Vellucci, director of the UN Information Service, defended salary levels paid to the short-term hires: “consultants’ fee ranges are above the poverty line, [even when] taxes and social security have been paid”. 

The reliance on consultants’ skills comes amidst decreasing contributions from countries, including the United States, and growing pressure for reform within the UN. 

Hopeless and afraid 

“UN consultants feel hopeless and afraid,” Juan*(not his real name), another consultant, laments. 

Consultants’ concerns were compounded during a September 20 meeting convened by the UN’s staff association, when a note from the Swiss mission to the global organisation confirmed the status of the short staff hires as “non-staff members of the international organisation”, essentially independent workers. 

The clarification at the meeting means that unlike UN staff, they do not benefit from diplomatic immunity and exemption from income tax. 

As Juan explained, this meant that many consultants particularly those with much lower salaries face a “grim and depressing reality” of owing high sums of taxes they may not be able to afford and having to pay social security for benefits they will never receive when they have to leave Switzerland at the end of their contracts. 

“The tax issue was a total shock to me”, Laila admits. 

With the passing of the September 30 deadline for a tax amnesty, as part of Switzerland’s framework of automatic exchange of information with other countries, many non-Swiss consultants are concerned about what they will do. 

Unaware of status

Consultants claim that some local authorities were often unaware of what their status entailed, explaining that they were not liable to tax payments, while the UN administration had not provided clarity on the matter to incoming workers. 

Just like other international staff working at the UN, the consultants receive their permits (H legitimation cards) directly from the Federal Department of Foreign Affairs in Bern. This means that they do not need to announce their arrival to the canton as other private residents would need to do. 

One person, speaking on behalf of a consultants group, known as the Interim Coordinating Board, said the Swiss and UN authorities had not been fully transparent, having failed to fully inform consultants about their obligations. 

He noted that consultants working in Copenhagen for the UN Office for Project Services (UNOPS), or in Rome, for the Food and Agriculture Organization (FAO) were exempt from income tax payments. 

Confusing situation 

Jamal Reddani, a tax adviser with a long experience of assisting UN staff, admitted the situation was complex and that there had been lots of confusion surrounding status of the short time employees. 

He said that while both individuals and authorities may not have been always clear in communicating obligations, the contracts proposed to current contractors may not be legal from a tax and social security perspective in Switzerland. 

The Geneva cantonal finance department told swissinfo.ch that it was unaware of how international organisations communicated tax obligations to their employees. 

The finance office said in an emailed statement: “The income of consultants residing in the canton, from a legal standpoint, is taxable. If the income had not been declared, the taxpayer may regularise his/her status by submitting a spontaneous declaration to our administration. Taxes and interest (for a maximum of 10 years) need to be paid, but the taxpayer would avoid fines, (if conditions are fulfilled).” 

Get on the tax roll

The webpage of the Swiss mission to the UNexternal link, which was updated on October 1, states: “the person in question must write to the tax authorities of their canton of residence to request to be recorded on the tax roll”.  

Vellucci, the UN spokesperson, meanwhile rejected the consultants’ suggestion regarding lack of instruction by the organisation about fiscal duties. “UN contracts are very clear” about payment of taxes, she said. 

“Every UN consultancy contract clearly establishes the obligation for the consultant to pay taxes and outlines the consultant’s responsibility to comply with social security insurance in accordance with local laws,” she told swissinfo.ch by email. 

According to several sources at the UN, negotiations on tax payments are currently taking place between Swiss and UN officials. 

Future in question 

For many consultants a solution to this difficult situation cannot come soon enough. 

Juan told swissinfo.ch that UN and Swiss officials refused to meet with the consultants group directly and hear their concerns. He wondered what he would do if he was forced to pay CHF100,000 in back taxes he may now owe. 

Laila, meanwhile, admits she is not certain what her next step may be. With her current contract due to end in December, she says she may either move across the border to France, where costs are lower, if her contract is renewed, or return to her country. 

She stresses: “It has been complicated to handle living in Geneva with such a low salary and so many responsibilities.”

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