The Unemployment Security Act does not recognize the concept of a light entrepreneur. Typically, a light entrepreneur refers to someone who works through an invoicing service company. And evenly typically, an invoicing company is not in the position of an employer in such situations, but only offers, for example, services related to invoicing. When you work like this as a light entrepreneur, you are not a wage earner.
When applying the Unemployment Security Act, you are, in fact, an entrepreneur because you are in gainful employment without an employment or service relationship. It may seem complicated, but fortunately, it is not.
At the end, with regard to unemployment security, it does not matter whether you are a light entrepreneur or not. The only significant matter is, whether you are a wage earner or an entrepreneur.
When it comes to unemployment security, light entrepreneurs are often considered as being entrepreneurs
When you work through an invoicing service company, you have most likely come across the concept of a “light entrepreneur”. Perhaps you have also already adapted to considering yourself a light entrepreneur. The law, however, does not yet recognize the concept of a light entrepreneur. In essence, the matter is open to interpretation. Often, however, the situation is that the person working through the invoicing service, i.e. the “light entrepreneur”, is considered an entrepreneur in issues related to unemployment security.
Here’s how the train of thought goes: Invoicing service companies rarely have the opportunity or desire to manage and supervise the performance of your work. However, a company that only offers invoicing services is not in an employer position in relation to you. If there is no employer, there is also no employment relationship. When you work through an invoicing service for money, you usually work in gainful employment without being in an employment relationship. In such a case, you are an entrepreneur because the entrepreneur is a person who is considered “self-employed if they work without being in an employment relationship or public service relationship”.
When you work as a light entrepreneur through an invoicing service company, you do not need to start a business and acquire a Business ID (Y-tunnus). That is why you may not think of yourself as an entrepreneur, and why it may come as a surprise to you that with regard to unemployment security you are often defined as an entrepreneur.
In recent years, several invoicing service companies, or companies that offer different solutions for those operating as an entrepreneur, have been established in Finland.
Typically, an invoicing service company offers services associated with invoicing, so that you do not need a Business ID to run your business activities. There are also options where you establish a business with a Business ID, but you use the services of another company to manage your business activities.
These different methods of operation can all be marketed using the concept of “light entrepreneur”.
Or am I a wage earner after all?
It is also possible that the conditions for working are such that you perceive yourself as a light entrepreneur, but you are still a wage earner when applying the law. This can be the case, for example, when the company providing the invoicing service operates in the same industry as you and acquires assignments for you. Such a situation may arise, for example, in a co-operative in a well-defined sector with several members operating in the same sector.
Temporary agency workers are also considered wage earners with regard to unemployment security.
However, in order to be considered an employee on the basis of an employment relationship, the other party to the employment contract is required to be in an employer position. A company that only handles the accounting, invoicing and payroll of those performing the work cannot be considered as the employer of the person performing the work. Such companies do not often practice in the same line of business as you. Instead, these companies offer you support services based on a membership or contract. For example, they handle invoicing and payroll, as well as any other possible statutory obligations.
However, these contracts for support services do not give you a personal obligation to work for the invoicing service company. When working through an invoicing service company, you acquire the assignments yourself. In addition, you may also agree on prices and other terms completely independently. You can also do the actual work on your own premises or at the customer's facilities respectively. You may own your own tools or you may lease them. All these things suggest that you are not working in an employment relationship.
Therefore, when you work as a light entrepreneur, you are not interpreted as being an employee simply because of a possible employment contract. The factual circumstances of working determine and are central to the fact that the other party to the employment contract is in an employer position in relation to you.