Entrepreneurship and membership
The Finnish unemployment security system consists of an earnings-related allowance system for employees and an earnings-related allowance system for entrepreneurs and the self-employed. As the Unemployment Fund for Education and Science insures paid employees, we are not the right unemployment fund for you if you are a full-time entrepreneur or self-employed person. If you are self-employed, you can insure yourself against unemployment by joining the Entrepreneur Fund (Yrittäjäkassa).
If you are already a member of the Unemployment Fund for Education and Science and start a business, you do not necessarily need to leave the fund immediately, as the person starting a business is subject to a so-called post-protection period. However, inform us that you are starting a business via the link below.
We recommend that you contact Entrepreneur Fund(avautuu uuteen ikkunaan, siirryt toiseen palveluun) (Yrittäjäkassa) to determine the most appropriate way to transfer your insurance.
If you become unemployed, inform the TE Office(avautuu uuteen ikkunaan, siirryt toiseen palveluun) of your business activities while registering as a job seeker. If you are already a job seeker, contact the TE Office before starting your business. The TE Office will explore your entrepreneurial status and assess whether your self-employment is full-time or part-time and issue a labour policy statement to the unemployment fund.
Information on the impact of business activities on the payment of earnings-related allowance can be found under Entrepreneurship.
Self-employment in unemployment security
You are considered to be self-employed in the unemployment security system if you meet the definition in Section 3 of the Self-Employed Persons’ Pension Act (1272/2006) or Sections 3–5 of the Farmers’ Pension Act (1280/2006). According to the Self-Employed Persons’ Pension Act, you are considered self-employed if you work without being in an employment relationship or public service relationship.
In addition, if you are a part-owner of a company in which you work, you are considered to be self-employed in the unemployment security system despite being covered by the Employees Pensions Act (TyEL). You are considered to be a part-owner if
- you hold a senior position and personally own at least 15%, or your family or you together with your family members own at least 30% of a company; or
- you, your family, or you together with your family members own at least 50% of a company: or
- you, your family, or you together with your family members hold a controlling power in a company equivalent to the above (e.g. partnership, limited partnership, private entrepreneur, member of a co-operative).
A company’s managing director, chair of the board or a member of the board are considered to hold a senior position. Family members include the self-employed person’s spouse or cohabiting partner, as well as children and parents living in the same household.
Effects of entrepreneurship/self-employment
Work done as an entrepreneur or as own work does not count towards fulfilment of an employee’s employment condition. Your entitlement to an earnings-related allowance from the Unemployment Fund for Education and Science cannot be based on income from business activities, self-employment or your own work. If you become self-employed (including working for a family business), you should consider whether the Unemployment Fund for Education and Science continues to be the appropriate unemployment fund for you.
- If you switch to an unemployment fund that insures self-employed persons at the start of your business activities or self-employment, you can also transfer the unemployment allowance entitlement you have accumulated. If the transfer takes place within three months of starting your business activities, you have the possibility of uninterrupted unemployment security from the Entrepreneur Fund. You must join the new fund within one month from the time you resign from the previous fund.
- If you become unemployed before you have fulfilled the self-employed persons’ employment condition as a member of the Entrepreneur Fund and before you have been self-employed for at least 18 months, you will be able to claim an unemployment allowance based on your earned income prior to becoming self-employed.
- If you do not transfer your membership to an unemployment fund that insures the self-employed and you are self-employed full-time for more than 18 months, you will lose your right to an earnings-related allowance on the basis of meeting the employment condition for an employee’s allowance.
Entrepreneurs’ family members
Entrepreneurs’ family member’s unemployment security has improved starting from 1.7.2019. Changes to the unemployment security apply to an entrepreneur’s family member who has no ownership, share of votes or controlling interest in the company, yet works in the family business and has a pension insurance as referred to in the Employees Pensions Act (TyEL). If you work in a family business in the above-mentioned manner without ownership or controlling interest in the company, you will be considered as a wage-earner in the unemployment security.
The employment condition for an entrepreneur’s family member with no ownership is longer than that of other wage-earners. The employment condition is 52 weeks as a member of a wage-earner’s fund during the past 28-month review period. As an additional requirement, at the time when the employment condition is fulfilled, you shall not have had ownership or controlling interest in the company during the previous 12 months.
If you have been a member of an entrepreneur’s unemployment fund, you can bring your fully accumulated employment condition with you to the wage-earner’s unemployment fund based on the so-called post-protection principle. The prerequisite is that you join the new fund within one (1) month from the time you resign from the previous fund.
I am an employee as well as being self-employed; which fund should I join?
It is increasingly common to work both in an employment relationship and through self-employment. If you are simultaneously an employee and self-employed, you must decide for yourself which of these forms the major part of your employment. You should choose the unemployment fund on the basis of your own evaluation. If you are not simultaneously an employee and self-employed but alternate between these roles in consecutive periods, it is advisable to always transfer your insurance to the system under which you are currently employed. You can switch your fund membership between an employee fund and a self-employed persons’ fund. This will ensure that all your employment is credited as insurance periods against unemployment.
Persons who start a business are subject to a so-called post-protection period, the duration of which is 18 months.
- If your business activities cease within post-protection period, you will receive the same allowance as you would have before you became an entrepreneur, provided the other eligibility conditions are met.
- If the 18-month protection period has been exceeded, you will not be entitled to an allowance until you have re-fulfilled the employee’s employment condition (26 weeks).
- If your business activities continue beyond the 18-month protection period, you can be considered to have permanently left the sector that we represent. According to the Act on Unemployment Funds, the fund must then expel you unless you have resigned yourself or switched to the Entrepreneur Fund (Yrittäjäkassa).