Changes to unemployment security sanctions

In order to receive unemployment benefits, jobseekers must actively seek work and participate in services that promote employment. Jobseekers will lose their right to unemployment benefit for a fixed period or until further notice if they themselves are the cause for unemployment or prolonged unemployment. The latter may be the case, for example, if the jobseeker refuses to participate in the services of the employment authority as agreed in the employment plan.

For example: During the discussion on job search, the employment authority and the jobseeker have noted that updating the professional skills would improve the chances of the jobseeker to find employment. The job search plan includes an obligation to apply for four jobs during a month. In addition, the plan includes an agreement to apply for specific labour market training for updating skills.

The jobseeker applies for jobs and notifies the employment authority about this in the online service. In this respect, the jobseeker has fulfilled the requirement. However, the jobseeker fails to apply for labour market training and does not have a valid reason for doing so under the Unemployment Security Act. Because the jobseeker does not have any previous neglects, an unpaid time period will be imposed on the jobseeker, during which no benefits will be paid.

Acting in a manner considered reprehensible in terms of labour market policy, i.e. failure to apply for work or participate in employment services, could result in periods when no benefits are paid to the jobseeker, i.e. unpaid time periods and duty to work.

The unpaid time period means a loss of unemployment benefit for a fixed period. The term in Finnish legislation is “korvaukseton määräaika .”

The duty to work, on the other hand, means that the right to unemployment benefit is lost until further notice. The right to claim benefits would be restored after the jobseeker had worked for at least 12 weeks or participated in certain services.

No unemployment security sanctions would be imposed on the jobseeker if they had a valid reason for their actions in terms of labour policy.

The sanctions do not prevent the jobseeker from receiving unemployment benefit during the employment-promoting services under the Unemployment Security Act.

The sanctions for failing to seek employment or to participate in employment services are staggered:

1. failure: no sanction
2. failure: 7-day period without payment of benefits
3. failure: 14-day period without payment of benefits
4. fourth (or more) failure: 12-week duty to work

The actions of the jobseeker related to job search and employment services are reviewed on a one-year basis.

The aim of the reform is to clarify and simplify the sanctions and to make the job search of jobseekers and their participation in employment-promoting services more efficient.

Currently, it is common that failures to follow the rules do not result in any unemployment security sanctions. In practice, this means, that jobseekers neglect their obligation to participate in meetings with the employment authority that are part of the service process or to apply for jobs as agreed in the employment plan in an appropriate manner.

The reform is part of the measures of the Government of Prime Minister Petteri Orpo to introduce incentives and obligations into the social security system.

The aim is to clarify the unemployment security sanctions and to make the job search of jobseekers and their participation in employment-promoting services more efficient.

Changing the current four-stage system to a two-stage system would clarify the unemployment security sanctions. The threat of losing the unemployment benefit more quickly would provide an incentive not to neglect the obligations, which in turn would make job search and participation in services more efficient.

Under the proposal now circulated for comments, the staggered sanctions would be changed so that jobseekers would lose their right to unemployment benefit already after their first failure related to job search or participation in services. In these situations, the right to benefits would be lost for seven calendar days. The change would emphasise the jobseeker’s own responsibility to actively seek employment and participate in the available services.

The sanctions system of four stages would be replaced with a two-stage system. For the second failure to apply for work or participate in employment services, jobseekers would be imposed a duty to work for six calendar weeks. In practice, this would mean that jobseekers who continue to act in a manner considered reprehensible in terms of labour market policy would lose their right to unemployment benefits more quickly than now.

At the same time, however, the jobseekers who have lost their right to benefits would be able to reclaim the right more easily than now, as the duration of the duty to work would be reduced by half (from 12 calendar weeks to 6 calendar weeks).

Jobseekers will lose their right to unemployment benefit or be imposed a duty to work if they neglect their obligations. In other words, jobseekers will not lose their right to unemployment benefit if they have properly applied for employment opportunities but have not been selected for them.

However, if the duty to work is imposed on the jobseeker and job search does not lead to employment, the duty can also be fulfilled by participating in employment-promoting services. Jobseekers who have been subject to unpaid time period or duty to work before the services have the right to receive unemployment benefit during the participation in services. 
Jobseekers who have lost their right to unemployment benefit may be entitled to other benefits paid by Kela. Jobseekers may receive general housing allowance for their housing costs, and as a last-resort financial support, they may be entitled to social assistance.

The legislation on unemployment security sanctions has been in force for quite a while, and the provisions have been amended several times. The current four-stage sanctions system entered into force at the beginning of May 2022. Prior to that, the first failure to meet the obligations resulted in a period of at least 15 days, at least 30 days, or 60 days during which benefits were not paid. The second failure within a six-month review period led to a duty to work of 12 calendar weeks.

The proposal now circulated for comments is therefore significantly more lenient compared with the provisions that were in force until the beginning of May 2022, even if the jobseeker lost their right to unemployment benefit for a fixed period for their first failure. When assessing the severity of the sanctions, however, it is necessary to consider the services that were available to jobseekers at any given time and the number of job offers made by the employment authorities that were binding on jobseekers to claim unemployment benefit.

The ministerial working group on employment decided on 20 March 2025 to begin the preparations for legislative amendments. Subsequently, any possible changes were discussed on a tripartite basis. The Ministry of Economic Affairs and Employment sent out a draft government proposal for comments on 9 May 2025. The consultation round will end on 19 June 2025, after which the preparatory work by public officials will continue. The Government intends to submit the proposal to Parliament in September 2025. The amendments are set to enter into force at the beginning of 2026.