Coronavirus exceptions for unemployment benefit and furloughs largely expire at the end of 2020

Several temporary changes were made during the spring and summer to the laws governing unemployment benefit, furlough procedures and terms and conditions of employment in Finland due to the coronavirus pandemic. While many of these exceptional arrangements expire at the end of the year, some have been prolonged into 2021.
30.12.2020 15:56
Photo: Sigrid Gombert / Gorilla

Unemployment benefit waiting period restored and employment condition returns to six months

A five-day waiting period for unemployment benefit will again apply as of the start of the year for all such periods beginning after 31 December 2020. No unemployment benefit is payable for this initial waiting period.

The exceptional three-month employment and fund membership condition for earnings-related unemployment benefit will return to six months for all earnings-related daily allowance payments beginning after 31 December 2020. The employment condition means that eligible jobseekers must have been adequately employed for at least 26 weeks during the preceding 28 months. Payment of earnings-related daily allowance also requires the jobseeker to be a member of the unemployment fund for at least six months before the onset of unemployment.

Maximum unemployment benefit period continues to run

Deductions from the maximum period of eligibility for unemployment benefit will be restored after the end of 2020. No such deduction has been made for workers furloughed since 16 March and for other unemployment benefit claimants since July. The previous practice of paying unemployment benefits for 300, 400 or 500 days depending on the circumstances will be restored from the beginning of January. Jobseekers must claim labour market support from Kela if their unemployment continues for longer than the maximum benefit period.

Registration in the TE service will be discontinued as of the beginning of January if the jobseeker has not prepared a service need assessment or an employment plan. The lifting of exceptions also means that payment of unemployment benefit may once again be temporarily suspended if a jobseeker drops out of employment promotion measures.

Restrictions that generally cause a temporary loss of unemployment benefit when short-term studies are prolonged for longer than six months will also be reinstated at the turn of the year if the studies are found to be full-time. The progress of voluntary studies will also be once again monitored normally as of the beginning of January, with no additional study time permitted.

Exceptions concerning the protected portion of unemployment benefit and the mobility allowance continue until the end of March

The increase in the protected portion of unemployment benefit from EUR 300 to EUR 500 per month will continue until 31 March 2021. The protected portion is the maximum sum that a jobseeker may earn without losing unemployment benefit.

Temporary relief in the mobility allowance will also continue until the end of March. A mobility allowance may be paid to a claimant eligible for unemployment benefit who accepts an offer of work at a location far from home or moves a similar distance for work. Payment of such allowances during the coronavirus epidemic required a daily commute of more than two hours for full-time work, instead of the previous three-hour minimum.

Measures facilitating the payment of unemployment benefit will also continue until the end of March 2021. The unemployment fund or Kela may pay part of the unemployment benefit in advance for up to six months before issuing a formal decision on the claim. Such advances were previously only payable for two months. Unemployment benefit must nevertheless still be claimed for each period of joblessness.

Measures facilitating the calculation of adjusted unemployment benefit will also continue until 31 March 2021. No special adjustment period or related imputed income will be applied in this adjustment.

Special self-employed access to unemployment benefit continues to the end of March

Extended access to unemployment benefit for the self-employed and freelancers will continue until the end of March 2021. These workers may seek labour market support from Kela without having to stop trading if they are unable to work full-time, or if their livelihood is reduced due to the coronavirus epidemic.

The prolongation to 18 months of the maximum duration of the start-up grant payable to a jobseeker who becomes self-employed will continue throughout 2021. The start-up grant is normally payable for 12 months.

Temporary changes to the law on furlough expire at the end of 2021

Unless otherwise provided in a collective bargaining agreement, the temporary amendments introduced in the spring to the law governing furlough procedures will expire at the end of December 2020. The normal procedure is accordingly restored for private sector redundancies:

  • with the minimum furlough negotiation periods under the Co-operation Act returning to 14 days or 6 weeks instead of the exceptional 5 days.
  • with the employer’s right of furlough no longer governing temporary employment contracts to the same extent as open-ended employment contracts.
  • with a requirement to notify the employee of a furlough at least 14 days in advance (one month in advance in the municipal sector), whereas the notice period was 5 days under the temporary amendment.

Furloughed employees may continue studying while claiming unemployment benefit until the end of next year

A furloughed employee may exceptionally receive unemployment benefit until 31 December 2021, even though studying during the furlough. Normal employment policy conditions will otherwise again apply to employees who are furloughed at the beginning of 2021, meaning that a furloughed employee must, for example, accept any job or service offered by the TE Office and participate in preparing an employment plan. The TE Office will also investigate whether any self-employed activities of a furloughed employee constitute a main or secondary occupation, and will issue a decision on eligibility for unemployment benefit accordingly.

Restoration of normal trial period regulations and the employer’s duty to re-engage a redundant employee

The temporary exemptions made to regulations governing an employee’s trial period and the employer’s duty to re-engage a redundant employee will expire at the end of 2020. This means that employment may no longer be terminated on grounds of redundancy during a trial period. The maximum time limit governing an employer’s duty to re-engage a redundant employee will return to 9 months, instead of the exceptional 4 or 6 months. This is the period during which an employer must offer work to a former employee who was previously made redundant if the employer needs to recruit new employees for duties that are the same as or similar to those formerly performed by the redundant employee.

SAK also provides an information package on the effects of the coronavirus epidemic on the world of work.