The position of family members of entrepreneurs will improve

An amendment of law that will improve the position of family members of entrepreneurs regarding unemployment security will enter into force on 1 July 2019. As a result of the amendment, the non-owner family members of entrepreneurs who work in the company shall be considered as a general rule salaried employees when the Unemployment Security Act is applied.

According to the currently valid Unemployment Security Act, a family member of an entrepreneur can be considered to be an entrepreneur, even if the person has no holding or authority in the company. That deviates somewhat from the definitions in the pension acts. It has resulted in incorrect insuring in terms of unemployment security, as a result of which family members of entrepreneurs have remained outside the unemployment security.

A family member refers to the spouse of a person working in the company and a person who is directly ascending or descending relative of a person working in the company and lives in the same household with that person.

As a result of the amendment, family members of entrepreneurs can receive unemployment security of employees. The requirement is that the person joins an unemployment fund for employees, such as YTK. If a family member of an entrepreneur is not yet a member of an unemployment fund for employees, it is recommended to join right away on 1 July. If the person already is a member of an unemployment fund for entrepreneurs, it is worthwhile to change to an unemployment fund for employees on 1 July. You will not lose the condition regarding employment accumulated in the unemployment fund for entrepreneurs, if you join the new fund within one month from resigning from the previous fund.

Although a non-owner family member of an entrepreneur will be considered a normal employee in the future, there is an exception for that group concerning the condition regarding employment which is a requirement for receiving unemployment allowance. Its duration is 52 calendar weeks i.e. twice the duration for other salaried employees for whom the duration of the condition regarding employment is 26 calendar weeks.

The new act will enter into force on 1 July 2019, and it will be applied to working that takes place after the entry into force of the act.

The amendment does not concern persons who own even a small share of the company. In that case they are still considered entrepreneurs for the purposes of unemployment security. Furthermore, the amendment does not concern persons who are entrepreneurs in accordance with the Self-employed Persons’ Pension Act.

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