Home Income security Lay-off

Topic

Lay-off

Lay-off means that if the conditions specified in the Employment Contracts Act are met, your employer will suspend work and pay. At the same time, you stop working even if the employment relationship remains in place. The procedures and deadlines to be followed in lay-offs are laid down in the Employment Contracts Act and collective agreements.

If you are laid off, you can apply for earnings-related daily allowance from us. Register as a job seeker first. After the layoff has lasted two weeks, you can send us your first application for earnings-related daily allowance. If the layoff lasts less than two weeks, submit an application when the layoff ends.

If laid off, you are entitled to the same earnings-related daily allowance as you would be entitled to if you were unemployed. You can find more information about earnings-related daily allowance, its amount, duration and limitations in our data bank.

Instructions for when you’ve been laid-off

Do this

  1. Register as a job seeker
  2. Apply for earnings-related daily allowance
  3. Make a follow-up application
  4. Report the end of the layoff

Register as a job seeker immediately

We can only pay you earnings-related daily allowance if your job search is valid. Remember to register as a job seeker no later than the first day of the layoff. Register as a job seeker on the TE Services website. You can also register as a job seeker before the start of the lay-off.

Apply for earnings-related daily allowance

After two weeks of lay-off, you can send us your first application for earnings-related daily allowance for the past time. If the layoff has started in the middle of the week, fill out the first application from the past two weeks to Sunday. Earnings-related daily allowance is always applied for retroactively, so you cannot fill in the application in advance.

If the layoff is shorter than two weeks, you can send us an application as soon as the layoff ends.

Make an application for earnings-related daily allowance in our electronic service at OmaYTK. The service will guide and help you. The application is saved automatically and you can continue to fill it out when it suits you. Through the service, you can also submit all attachments and retrieve the required income data from the Incomes Register.

We can only pay earnings-related daily allowance retroactively for a period of three months. Always send all earnings-related daily allowance applications to us within three months of the date from which you apply for earnings-related daily allowance.

Make a follow-up application

If the layoff continues, make a follow-up application after four weeks or one month from the last day of your first application. You can make a follow-up application even if we haven’t had time to process your first application yet.

You will receive earnings-related daily allowance faster if you follow the application period proposed by OmaYTK in the extension application. Change the application period only if we specifically request it.

Report the end of the layoff

Apply for earnings-related daily allowance until the end of the lay-off. When the layoff ends, state it in the last application.

If your employment ends during the layoff, please let us know in the application. Continue applying for daily allowance as an unemployed person, i.e. enter “Unemployed” in the daily breakdown of the application.

At the end of the employment relationship, you may be entitled to pay for the period of notice or an equivalent compensation. We cannot pay you earnings-related daily allowance for the period you are entitled to pay during the notice period. It is therefore important that you inform us of the termination of your employment. If you have been laid off using the 14-day lay-off notice period defined by law, the lay-off notice period can be shortened from the notice period.

Always report the termination of employment to the employment authority. They will investigate the termination of the employment relationship and give us a statement about it. Respond immediately if the employment authority requests a separate clarification from you. If you have resigned or otherwise caused the termination of the employment relationship yourself, the employment authority may impose a non-remunerated period of time, i.e. the suspension period.

Application for earnings-related allowance

An earnings-related allowance application is always made in writing. No more precise format for the application has been defined. However, we need a lot of different information to assess whether you are entitled to earnings-related daily allowance and to calculate how much earnings-related daily allowance you are entitled to. Therefore, you should use our electronic OmaYTK service. It will ask for the necessary information and guide and help you in filling out the application.

When you apply for earnings-related daily allowance, we need information about the wages paid to you. In the OmaYTK service, you can already apply for salary information for an application from the Incomes Register when filling in the application. When the salary information is already ready in the application, it will be quicker to process your application.

If the employer has reported only one total amount of salary to the Incomes Register, we may need further information. For example, holiday pay and holiday compensation we need to get a breakdown of the payroll. Such information can be conveniently added when you apply at OmaYTK. You will find the necessary information in your pay slip and OmaYTK will guide you in filling out this information.

The more carefully you get the information recorded, the faster we will be able to process your application.

If you have worked part-time and apply for salary information from the Incomes Register, the wages whose payment date falls on the period of the application will be included in the application.

If your employer has not yet had time to report the payroll data to the Incomes Register, you can add the payroll data yourself in the section: “Is the employer missing the data?” Add employer and missing income information. All the different income types in the Incomes Register can be found in the quick and drop-down menus. Use as payroll the amount of salary before deducting taxes and other payments, i.e. the so-called gross amount.

When you send us an application, you can rest assured. We’ll take care of it and if we need any more information, we’ll get back to you.

Required attachments according to the daily allowance application

To process the daily allowance application, we need a few appendices. When you apply at OmaYTK, the service will advise you on what attachments we need.
​​​​​​​
We can only pay the daily allowance retroactively for a period of three months. So make sure that you send us the application well in advance of the three-month deadline, even if an attachment is still missing. Missing attachments can be submitted later. We will ask separately if something important is missing.

Salary certificate

Pay slips are of little importance today. When making an application, you can retrieve the necessary salary information from the Incomes Register. When we process your application, we will once again check the data in the Incomes Register.

Data from the Incomes Register may not be enough. At OmaYTK, you can report more detailed and possibly missing information.

We no longer need a salary certificate or calculation separately. However, they may be useful if there is something unclear in the Incomes Register data. However, they do not even need to be sent to us, just in case. We will be in touch if we need more information.

Tax card

When paying earnings-related daily allowance, taxes are deducted from it. That’s why we need to know your tax rate.

At the beginning of the year, the Tax Administration will automatically provide us with the tax information of all our members. However, this information is for salary. In accordance with the Tax Administration’s instructions, the tax rate is at least 25 if the benefit is taxed at the tax rate of the salary. So it may be that the tax card you receive from the tax authority has a different tax rate, which is shown in OmaYTK. The difference is due to the change in the tax rate that is made when the benefit is paid at the tax rate of the salary.

When you apply for earnings-related daily allowance, you can order a new tax card at the Tax Administration’s service. When you enter an estimate of earnings-related daily allowance on the tax card and report us, i.e. YTK Unemployment Fund, as the payer of the benefit, we receive the new tax information directly from the tax authorities. When we receive the withholding percentage calculated for the benefit from the tax authority, we can do the withholding directly with it without the aforementioned increase.

We use the tax rate we have on the day of payment of the benefit. If you want to change the tax rate, you should do so before submitting your daily allowance application.

Announcement of lay-off

Please also provide us with a notice of lay-off. We need a layoff notice when we check the type of layoff. In addition, we need a lay-off notice if the employment relationship ends during the lay-off.

The submission of a notice of lay-off is not strictly necessary for the payment of the benefit at the beginning of the lay-off. However, it makes it easier to process the application, so it is worth submitting to us.

Statements of other income and benefits

By law, you must always inform us of any change in your circumstances that may affect your right to unemployment benefit or reduce the amount of benefit you receive. If you are in doubt, please contact our Customer Service.

Here are some examples:

  • If you have income during the period of the lay-off, or if you work part-time, for example, we need to know your income and the date of payment. As a rule, we can obtain this information from the Incomes Register, but please remember to let us know.
  • If you receive social benefits, please attach a copy of the most recent benefit decision to your application. Always indicate in your application if you are claiming a pension or appealing against a pension claim.
  • If you are self-employed or work as a self-employed farmer, please enclose details of your most recent tax return.
  • If you or your family receive home care allowance for a child under 3 years of age, please include information on who is looking after the child, in addition to the decision.

Part-time lay-offs

It is possible that the lay-off is part-time. Then you will continue to work part-time during the layoff. This is not an obstacle to the payment of earnings-related daily allowance.

The Unemployment Security Act knows two types of part-time lay-offs. In reality, these can happen at the same time. This causes some interpretive situations, but you don’t have to worry about it. We’ll sort it out.

If you are laid off by reducing your weekly working hours, we will pay you full earnings-related daily allowance for the lay-off days. We cannot pay earnings-related daily allowance for working days.

The lay-off can also be implemented by reducing your daily working hours. Then we can pay you an adjusted daily allowance. This means that we take into account the income you receive in the amount of your daily allowance. So we can still pay daily allowance, but less than when completely laid off. You can estimate the amount of adjusted daily allowance with our calculator.

If you have both fully laid-off days and reduced working days during the calendar week, we will also pay adjusted daily allowance. In the payment, we take into account income from both shortened and full working days.

The adjusted daily allowance and its restrictions

A prerequisite for the payment of the adjusted earnings-related daily allowance is that your daily working hours have been shortened due to the lay-off. This means that the calendar week has at least one day on which working hours have been reduced. For example, if you work five hours a day, your daily working hours are reduced.

However, we cannot pay adjusted daily allowance if your working hours have been reduced only slightly. This restriction is written into the Act so that there is no entitlement to adjusted daily allowance if the working hours exceed 80 per cent of the maximum working hours of full-time work. Therefore, if your working hours exceed 80% of the maximum working hours, we cannot pay earnings-related daily allowance.

Working during a lay-off

During lay-offs and unemployment, the livelihood is secured by unemployment benefit. However, do not let unemployment benefit discourage you or prevent you from taking advantage of your own skills. Earnings-related daily allowance is well-matched with short-term or part-time work. Various forms of entrepreneurship are also within your reach.

You may well be working during the layoff. You can therefore work entirely for another employer or, similarly, partially return to the employer who laid you off. Always report the work you have done in the earnings-related daily allowance application.

When you have income from part-time work, it is deducted in part from your earnings-related daily allowance. You can estimate the effect of salary on the amount of earnings-related daily allowance on our calculator.

Read more about the adjusted daily allowance.

Midweek holiday compensation

Midweek holidays and the compensation paid from them may affect the earnings-related daily allowance paid during the lay-off.

Depending on the arrangement, the employer can take into account the midweek holiday pay in three different ways. Midweek holiday compensation can be paid as a separate compensation, or it can be handled in such a way that no separate compensation is paid, but the midweek holiday does not reduce the pay to be paid. Midweek holidays can also be a holiday, which is deducted from, for example, the monthly salary. 

If you receive a midweek holiday allowance or if the midweek holiday does not reduce your salary, state “at work” in the application for the midweek holiday, and mark the number of working hours that the midweek holiday allowance corresponds to.

Please also note that this has been a midweek holiday. This will allow us to check what the correct solution is.

Midweek holiday compensation as a separate compensation

  • If you have been laid off full-time, your pay rarely continues and you are also not paid any midweek holiday pay. However, if for some reason you are paid a midweek holiday allowance for one day, for example, we can only pay earnings-related daily allowance for four days that week. Earnings-related daily allowance is paid here one day less.
  • If you have been laid off for a shortened working week and you are paid a midweek holiday allowance for one day, the possible days of compensation will be reduced by one day. In this example, we can therefore pay you earnings-related daily allowance for a maximum of four days during the week.
  • If you have been laid off for a shortened working day or have income from part-time work or part-time business activities, you are covered by mediation. In that case, the midweek holiday allowance will be taken into account in mediation and it will reduce some of the earnings-related daily allowance to be paid.

Midweek holidays are not deducted from pay

In some areas, the midweek holiday is not a working day, and therefore the employer does not deduct the pay from the midweek holiday. Such a procedure reduces the number of weekly compensation days.

  • If you have been laid off full-time, the midweek holidays are not relevant to the payment of earnings-related daily allowances.
  • If you have been laid off for a shortened working week and your pay is not deducted from the midweek holiday, the possible compensation days will be reduced. In this case, for example, we can pay for a maximum of four days during the week if there is one midweek holiday.
  • If you have been laid off for a shortened working day or have income from part-time work or part-time business activities, you are covered by adjusted daily allowance. As no separate allowance is paid for the midweek holiday, it does not directly reduce the daily allowance. However, when no deduction is made, the salary to be taken into account in adjustment may be higher than it would be based solely on the work done. Thus, the deduction from the daily allowance may also be higher. In some situations, the maximum amount in euros for adjustment may also be met, in which case the daily allowance cannot be paid at all. In addition, it should be remembered that the total number of reimbursement days in a calendar week may not exceed five, so the obstacle to the payment of daily allowance may also be that the maximum number of reimbursement days is exceeded.

Midweek holidays are deducted from the salary

VWe can pay earnings-related daily allowance normally if a separate midweek holiday allowance is not paid and at the same time the midweek holiday is also deducted from the salary. In these situations, the placement of the midweek holiday during the lay-off does not affect the earnings-related daily allowance. If you are within the scope of mediation, the adjusted earnings-related daily allowance may be slightly higher if the effective salary is lower than before after the deduction.

Lay-off and fringe benefits

During the lay-off, you may retain the fringe benefits that are part of the employment relationship. Please inform us of them in the application.

Benefits in kind in employment relationships include, for example, housing benefit, access to electricity, garage benefit, food benefit, full board benefit, car benefit and telephone benefit. Such taxable fringe benefits are earned income from the point of view of unemployment security.

When we calculate the amount of your earnings-related daily allowance when the employment condition is met, we take into account benefits in kind that are taxable.

If your lay-off takes place in such a way that you are within the scope of mediation, we will take into account taxable fringe benefits as earned income. In these situations, fringe benefits can affect the amount of your earnings-related daily allowance.

  • If you have been laid off full-time, this is not a adjustment situation. Even if you retain a fringe benefit that is part of the employment relationship during the lay-off, it will affect the amount of earnings-related daily allowance we pay you only if the employment condition is met and we recalculate the amount of your earnings-related daily allowance.
  • If you have been laid off by shortening your work week, this is not a adjustment situation. Even if you retain a fringe benefit that is part of the employment relationship during the lay-off, it will affect the amount of earnings-related daily allowance we pay you only if the employment condition is met and we recalculate the amount of your earnings-related daily allowance.
  • If you have been laid off by shortening your working day, this is a adjustment situation. In this case, the taxable value of the fringe benefit is taken into account in the amount of the earnings-related daily allowance, i.e. the fringe benefit reduces the earnings-related daily allowance paid to you.
  • If you have been laid off full-time or by shortening your work week, but you are working part-time for your own or a foreign employer, this is a adjustment situation. The taxable value of fringe benefits is taken into account in the amount of earnings-related daily allowance, i.e. fringe benefits reduce the earnings-related daily allowance paid to you.

Tax-free fringe benefits

Some fringe benefits are normal and reasonable employee benefits and are therefore tax-free. Such benefits are not taken into account in earnings-related daily allowance. Such benefits may include, for example:

  • occupational health care
  • staff discount
  • anniversary or minor other gift
  • recreational benefits
  • joint transport organised by the employer during commuting

Lay-off and annual leave

The holiday may prevent the payment of the daily allowance in its entirety or it may reduce the amount of earnings-related daily allowance to be paid.

When we determine the impact on you, we will determine whether the compensation paid for the holiday is based on full-time or part-time work.

Salary for annual leave

You can take your vacation during the layoff. If the entitlement to leave is based on full-time work, you are not entitled to earnings-related daily allowance for the period during which you take leave.

When the right to annual leave is based on part-time work, we take the pay for the annual leave into account in mediation when the annual holiday pay is paid to you. In other words, the annual holiday pay based on part-time work reduces the earnings-related daily allowance paid to you when the holiday pay is paid, regardless of when you take the holiday.

Holiday allowance and holiday return allowance

Holiday pay based on pay for full-time work and holiday return pay do not affect earnings-related daily allowance. However, they often relate to annual holiday pay, in which case payment of earnings-related daily allowance may be prevented for that reason.

We will take into account the time of payment as the income of the adjustment period, regardless of the period of time they have been earned or when you have taken a holiday.

Holiday compensation

At the end of more than two weeks of employment, the holiday compensation paid to you prevents us from paying you earnings-related daily allowance for the same period as the holiday compensation. However, holiday compensation is paid at the end of the employment relationship, so it is rare for such items to be paid during the lay-off. However, such a situation may arise, for example, if you have worked another job that ends during a lay-off.

In addition, the employer must, in certain situations, give leave during the lay-off. During the holiday, we cannot pay earnings-related daily allowance. If the date of the holiday is not known, we will find out how many holiday days the holiday compensation corresponds to. During that period, we cannot pay earnings-related daily allowance.

The holiday compensation based on part-time work or full-time work lasting less than two weeks is taken into account in mediation as income at the time of payment. Such holiday compensations reduce the amount of earnings-related daily allowance paid to you, regardless of the time they have been earned or when you have taken a holiday.

Topic