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Temporary lay-off

Temporary lay-off means that your employer unilaterally decides to reduce your hours for production-related or financial reasons. Your employment relationship remains valid normally in all other respects. You are entitled to earnings-related allowance while you are laid off temporarily if you meet the other conditions for the allowance. To apply, you need a notice of temporary lay-off from your employer.

If you receive other income during the temporary lay-off, such as social security benefits, business income or earnings from part-time or gig work, you are paid an adjusted daily allowance. In this situation, your income affects the amount of earnings-related allowance you can receive. Earnings-related allowance is not paid for public holidays for which you would normally be paid a salary.

You are employed full-time and your employer reduces your weekly hours. This means that you have been laid off temporarily for at least one full day in a calendar week, but each lay-off is shorter than a calendar week. You are paid a full earnings-related allowance for the days you are laid off. 

If your hours during a calendar week exceed 80% of the hours in full-time work, you cannot be paid earnings-related allowance for the week. This means that if you are laid off one day in a calendar week and work four full days, you can receive the full earnings-related allowance for the days you are laid off. If, on the other hand, you are laid off for one day and work five days in the same calendar week, you exceed the maximum percentage of 80% of full-time hours and cannot receive the allowance for that week. If you receive other income while you are temporarily laid off, such as business income, you are paid an adjusted allowance.

Your employer cuts your daily hours. In this case, you are paid an adjusted allowance. This means that all your earnings affect the amount of allowance. In cases of temporary lay-off, your hours are always taken into consideration based on the calendar week. This means that your hours are counted for the week on which the payday falls. If your hours during a calendar week exceed 80% of the hours in full-time work, you cannot be paid earnings-related allowance for the week.

Often, you will not be paid an allowance for the week on which your payday falls, but you will receive an adjusted allowance for other weeks.

In part-time work, you are always paid an adjusted allowance even if you are laid off on a shorter workweek or workday.

Adjusted allowance

Your employer can change your full-time employment to part-time only by terminating the full-time employment contract. The employer must also comply with normal notice periods.

A new employment contract must be signed for the part-time work. In order to be entitled to the allowance, your employer needs to have made the decision to change your employment to part-time unilaterally without your input.

The employer and employee can also agree mutually on changing the employee from full-time to part-time but in this case, you are not entitled to earnings-related allowance. This situation can arise, for example, when your hours are reduced by mutual agreement due to illness.

You are not entitled to unemployment allowance if the reduction in your working hours is made at your suggestion or request. This situation usually arises when your hours are reduced for health reasons. Under the Unemployment Security Act, you are not entitled to earnings-related allowance in these situations.

For example:
You work part-time at 80% of full-time hours and are paid adjusted earnings-related allowance from the unemployment fund. For health reasons, you have agreed with your employer that you will work only 60% of full-time hours for the next four months. Because your hours were reduced at your own request and not unilaterally by your employer, you are not entitled to earnings-related allowance during the time when you work only 60% of full-time hours.

You may also be entitled to earnings-related allowance in so-called situations comparable to a temporary lay-off, such as during school holidays.  Your employment contract must include provisions on such unpaid holiday seasons, suspension of payment of wages or that your employer cannot offer work for the period in question. You are not entitled to the daily allowance unless this has not been agreed in the employment contract. If your employment contract does not include a provision agreeing on situations comparable to a temporary lay-off, you will need to send us the annex to your employment contract specifying these situations. The annex enters into force on the date of signing.

In situations comparable to a temporary lay-off, the same rules apply on the payment of earnings-related allowance as in the case of a temporary lay-off.

Applying for the allowance during a temporary lay-off

  1. Register as an unemployed jobseeker with the TE Office on your first day of temporary lay-off at the latest. You cannot register as a jobseeker retroactively.
  2. During a temporary lay-off, you can apply for the allowance based on full calendar weeks. Submit your first application in Nettikassa for the first two full calendar weeks (Monday to Sunday).
  3. When sending your application, include the necessary documents as attachments.
  4. You can check Nettikassa to see when the fund has received your application. You will also see when your application is being processed.  Applications are processed in the order they arrive. You can check processing times on our website. After your application is taken up for processing, the case manager will ask you for any missing documents.
  5. Send your next application for the following four full calendar weeks (Monday to Sunday).

Please note that the application must be submitted to the fund no later than three months from the start of the period for which you are applying the allowance.