Can a person who has been made redundant work for free (for up to eight days) in the same company while registered as unemployed?
Working in a company for free is not intended for the replacement of an employee, but only exceptionally, for example, to help family members. Upon establishing a new company, the member of the management board is temporarily allowed to work for free. Working for free is not a workbit. The person, who was made redundant, can temporarily work in the same company under a contract.
Further explanations can be found on the website of the Tax and Customs Board.
The employer entered the work in the employment register for ten days, but the person actually works for two days. Does the person have to end the registration as unemployed?
Yes, as the Estonian Unemployment Insurance Fund takes into account the duration of the employment registered in the employment register and if the working period is longer than eight days, registration as unemployed will end. If the duration of the employment has been registered in the employment register incorrectly, the employer should make the correction entry.
For the purposes of § 11 (1) of the Labor Market Measures Act, temporary work means work performed based on a contract for services, authorisation agreement or contract under the law of obligations for the provision of other services or employment in the public service, the single duration of which does not exceed eight days during the time the person is registered as unemployed.
Can a sole proprietor, whose activity has been suspended and who has been registered as unemployed, undertake a workbit?
Registration as unemployed will be terminated if a sole proprietor, who has been registered as unemployed, continues the activities of the company, even if this is temporary. Sole proprietor, whose activity has been suspended and who has been registered as unemployed, can undertake workbits at another employer under the contract of employment or contract under the law of obligations or civil service.
Can an employer register working in advance? For example, a person works on the 15th, 20th, and 25th of October.
The Taxation Act stipulates that the commencement of employment shall be registered by the moment the commencement of employment of a person performing work at the latest, i.e. it is possible to register in advance.
Does participating in reservist training also count as a workbit?
No, reserve service does not count as a workbit and in the case of the notice of Defence Forces, registration as unemployed shall be terminated.
What shall be the form of the contract in the case of a workbit?
The form of the contract does not depend on the workbit, but on the content of work. An employer shall enter into contract as usual and register the working of a person (in the employment register). For an employer the workbit is an employment relation like any other.
The free advisory service of Labour Inspectorate is aimed at both employers as well as employees. The Labour Inspectorate has published more detailed clarification on the topic in the Working Life portal.
Can a member of the management board work temporarily in their company during the term of registration as unemployed?
Yes, but the work shall be registered in the employment register and meet the conditions of workbit.
Does the Estonian Unemployment Insurance Fund have a database of clients who want to work temporarily?
No, there is no such database, nor will there be one in the future.
A registered unemployed person may have the same question. In this case, the answer is that if an employer allows workbits, nothing changes for the company and it has to look for an employee according to the needs of the company and the job offer is directed to all jobseekers, not only to those registered as unemployed.
Can a person who is on a one-day job today be registered?
No, because they are working. The conditions for registering with regard to workbits have not been changed in the Labor Market Measures Act. A person, who does not work on the day of registering, can register as unemployed. Workbits are allowed after the person has already registered as unemployed.
Can a sole proprietor, whose activity has been suspended or whose seasonal activity has ended and who has been registered as unemployed, work temporarily in another company during the period of registration as unemployed?
Yes, but the work shall be registered in the employment register and meet the conditions of workbit.
How does project-based work (workbit) affect the unemployment allowance?
The remuneration for workbit does not affect the unemployment allowance.
An employer registered the duration of employment in the employment register as 1-30 August. The person only works on weekends, eight days altogether. Is this correct?
No, the Estonian Unemployment Insurance Fund takes into account the duration of employment and if the employment as a whole is longer than eight days, it is not considered a workbit.
Can a person work for eight days at the end of September (23–30.09) and at the beginning of October (01–08.10) during the period of registration as unemployed?
Yes, if there is an entry in the employment register, the conditions for authorised absence (eight days per month) are met. A further precondition is that the amount of remuneration should not exceed the allowed amount.
Can an employer also apply for social tax incentive for an employee in the case of temporary work?
If an employee is with decreased working ability and works under the employment agreement (and other conditions that have to be met), an employer can apply for the reimbursement of social tax.
Please note that the application shall be submitted on the day of commencement of employment at the latest or on the day the partial or no work ability of the employee has been identified; we do not reimburse social tax retroactively.
How does the employer pay social security contributions on behalf of the employee in the case of a workbit?
In the normal way, the employer must conclude a contract with the person, formalise the person's employment in the employment register, pay and declare the labour taxes (social tax, unemployment insurance contributions, withheld income tax and compulsory funded pension contributions) on the TSD tax return form. The employer's minimum social tax liability for working holidays is the same as for ordinary employment.
An employer may incur a minimum social tax liability if it concludes a temporary contract of employment of up to eight days with a person registered as unemployed for work and pays him or her remuneration for this work that is lower than the monthly social tax rate in proportion to the number of days worked.
An employer does not incur a minimum social tax liability in the case of an employee or official with an employment contract if the conditions set out in § 2(4) of the Social Tax Act are met.
Point 5 provides that social tax is paid on actual remuneration up to 12 months after taking up employment in the case of an employee or official who has been registered as unemployed for at least 12 months under § 8 of the Labor Market Measures Act during the six months prior to taking up employment. If the person has been registered as unemployed for less than six months, the tax incentive does not apply.
The employer does not have to submit any proof to the tax office with the tax return, but if the Tax and Customs Board starts to check and asks for proof, the employer must have written proof that they are entitled to the tax incentive.
If a client goes to work for 12 hours in one shift, is this one day or two days of work?
The working period is not based on hours, but on days; so, if the 12 hours fall on two days, this counts as two days. The Estonian Unemployment Insurance Fund uses the data from the Employment Register.
Is it possible to have more than one fixed-term contract for temporary employment?
According to the Employment Contracts Act, in the event of temporary work during the time a person is registered as unemployed under § 11 of the Labor Market Measures Act, employment contracts for a specified term of up to eight calendar days may be entered into for the performance of similar work an unlimited number of times within a period of six months. If, after the end of the six-month period, the same employee and employer enter into a new employment contract for a specified term within the subsequent six months, this employment contract will be deemed to have been entered into for an unspecified term. The employee must disclose and confirm to the employer that the employee is registered as unemployed.
If work has been done during several months, but the salary is paid as one payment for all of the months (that one payment exceeds the maximum amount allowed for one month), will the registration as unemployed be terminated?
In the case that an employer pays for several months at a time as one single payment and the amount exceeds the allowed maximum, a document signed by the employer is needed, stating that payment per month has nod been exceeded. In other words, the registration will not be terminated if there is documentation to prove that amount per month has not been exceeded.
If the temporary employment (workbit) starts within one month and ends the next month and lasts a total of 8 days, how are the days and payments calculated for this workbit? For example, the period of temporary employment is 29.05.2023 – 04.06.2023 and the gross salary is 250 euros.
In this case, the person works 3 days in May and 4 days in June, but the entire salary goes to the month of May. Salary is calculated for the month in which the period of temporary employment began.