Corona crisis and amendments to employment security legislation

Temporary amendments concerning the waiting period, the maximum payment period and the employment condition entered in to force on 15 April

Temporary amendments concerning the waiting period, the maximum payment period and the employment condition for unemployment security were approved by the Parliament on 9 April 2020. The amendment remains in force from 15 April to 6 July 2020.

The amendment allows unemployment benefit to be paid to an unemployed or laid-off person for the five-day waiting period. The amendment applies to persons whose waiting period starts between 16 March and 6 July 2020.

Daily allowance that has been paid due to a lay-off that started on 16 March 2020 or later will not be taken into account between 16 March and 30 June 2020 in the calculation of the maximum payment period of 300-500 days of the daily allowance. However, the maximum payment period for other recipients of unemployment allowance accrues as before.

In order to be entitled to earnings-related unemployment allowance, you must meet the employment condition and the membership condition of the fund. Currently, 13 calendar weeks suffice to meet the employment condition, if the applicant of earnings-related unemployment allowance does not meet the normal employment condition of 26 calendar weeks. The applicant must have at least one week of work that accrues the employment condition completed after 1 March 2020, and the first payment date of the earnings-related allowance must be no later than 3 July 2020. The membership condition is thus 13 weeks.

This reduction by half of the employment condition also applies to an entrepreneur’s family members in a non-owning position whose employment condition is reduced from 52 calendar weeks to 26 calendar weeks. The membership condition is also reduced to 26 weeks.

Does a person who has been laid off or whose employment has been terminated have to take into account the amendments when applying for benefits?

Earnings-related daily allowance is applied for in the same way as before. As soon as the lay-off or unemployment begins, you must register as a jobseeker in the TE office’s online service. You can apply for daily allowance from the KOKO fund one week after the start of the lay-off or unemployment.

Legislative amendment concerning business activities and studying while being laid off

On 30 March, the Parliament approved a legislative amendment under which the TE Office will not investigate whether a laid-off employee is engaged in business activities or studies. The amendment entered into force on 1 April.

The purpose of the amendment is to accelerate the processing of unemployment benefit applications of laid-off employees. As a result of the legislative amendment, a laid-off employee is no longer obliged to prepare an employment plan or participate in the services provided by the TE Office.

A laid-off employee must still register as an unemployed jobseeker with the TE Office. A laid-off employee must also accept work offered by their employer.

In addition to this, amendments to the Employment Contracts Act entered into force on 1 April: The 14-day lay-off notification period as per the Employment Contracts Act is reduced to five days, and a fixed-term employee may be laid off under the same conditions as a permanent employee.

The amendments are temporary. They apply to lay-offs that began on 16 March 2020 or later, and they remain in force until 31 July 2020.

It is important for those engaged in business activities to remember that the employment condition of a laid-off employee must be accrued from work performed as an employee. If the person has worked as an entrepreneur, they do not fulfil the employment condition and are not entitled to earnings-related unemployment allowance.

An entrepreneur’s entitlement to unemployment security in the corona situation

On 6 April, the Parliament approved a temporary legislative amendment which entitles an entrepreneur to receive Kela’s labour market subsidy if their income from business activities has decreased due to coronavirus.

The maximum income for receiving labour market subsidy for each person working as an entrepreneur in a business is EUR 1090 per month. The amendment remains in force from 16 March to 30 June 2020. You can apply for labour market subsidy from Kela.

No amendments were made to an entrepreneur’s unemployment security regarding earnings-related unemployment allowance. An entrepreneur is still entitled to earnings-related unemployment allowance if they have met the entrepreneur’s employment condition, their business has been closed down, working for the business has ended, or the business activities are part-time or short-term.