Government proposes to extend temporary amendments to Unemployment Security Act to strengthen livelihoods of employees

The proposal aims to strengthen the financial position of people in need of unemployment security in a situation where many have become unemployed or have been laid off.

The Government proposes that the temporary amendments to the Unemployment Security Act, the Act on Financing of Unemployment Benefits and the Act on Unemployment Funds remain in force until the end of this year.  

The Government proposes the following:

• The temporary amendment that has abolished the five-day waiting period before a person is eligible for unemployment security will remain in force from 1 July 2020. This would concern earning-related allowance, basic unemployment allowance and labour market support. The allowances payable for these days would be funded by the State.
• The required period of employment, which has been shortened for wage-earners, would entitle them to unemployment allowance beyond the start of July. Fulfilling the required period of employment is a condition for receiving unemployment allowance. The required period of employment would continue to be 13 calendar weeks. If the validity of the temporary amendments was not extended, the period would revert to 26 calendar weeks. For non-owner family members of entrepreneurs the required period of employment would be 26 calendar weeks. If the validity of the temporary amendments was not extended, the period would revert to 52 calendar weeks.
• The maximum time limit of unemployment allowance would be temporarily suspended. 

The proposal to suspend the maximum time limit of unemployment allowance would increase the number of people who can claim unemployment allowance without it affecting the maximum time for which such allowance is paid. Until the end of June, this exception only applies to persons who have been laid off. 

According to the proposal, unemployment allowance paid during the period from 1 July 2020 to 31 December 2020 would not be counted towards the maximum payment period for which such allowance can be paid.  According to the proposed amendment, unemployment allowances paid to, for example, partially employed persons or those who have become unemployed following a fixed-term contract will not be taken into account in calculating the maximum payment period.

The application of the provisions would not depend on the date when the payment of unemployment allowance started or the basis on which the allowance is paid.  Compared to the valid temporary amendments, the proposal would expand security in case unemployment is prolonged. 

It is proposed that the acts would enter into force on 1 July 2020 and remain in force until 31 December 2020. The proposal will ensure that the valid temporary amendments can be applied without interruption. 

The proposal is related to the amendments proposed to the Employment Contracts Act and certain other acts. The proposed amendments to the Employment Contracts Act and certain other acts aim to help employers to adjust their operations more quickly in a situation where the coronavirus epidemic has caused a sudden and significant drop in demand for goods and services. 

The proposal is related to the fourth supplementary budget proposal for 2020 and it is to be presented in this context.

Inquiries:

Marko Leimio, Senior Specialist, tel. +358 295 163 564