Questions and answers about municipalities’ responsibility to organise services

There are no plans for the subsidiaries of the company.

The company will also have its own physical office, possibly several later. However, it is essential that, as a rule, persons with partial work ability who have found employment in the työkanava Ltd work in the client’s premises. In this way, the activities are not tied to the office of the Työkanava.

The number of personnel in the company will increase as customer agreements are made. In addition to persons with partial work ability to be employed, work management and support services are needed. The size of this personnel is determined by turnover and the number of persons with partial work capacity to be employed.

Työkanava's own website will be opened in early 2023. In matters related to Työkanava, please contact CEO Sari Nikkola, sari.nikkola(at)tyokanava.fi.

Jobseekers are suitable for employment at Työkanava when they meet the suitability criteria. These include a customer relationship with TE services, impaired capacity to work, option of last resort, and the jobseeker’s consent and motivation. To be suitable for work at Työkanava, a jobseeker must meet all four criteria at the same time.

A person suitable for Työkanava must be a customer of TE services, i.e. an unemployed jobseeker referred to in chapter 1, section 3, subsection 1 and chapter 2, section 1 of the Act on Public Employment and Business Service. Persons who are not customers of TE services must register as jobseekers.  

Persons with impaired capacity to work refer to persons whose ability to find employment, or to remain or advance in employment has deteriorated significantly due to a diagnosed physical or mental disability or illness. 

Työkanava is always the option of last resort for people with impaired work capacity to find employment. This means that the available support measures or services cannot help the jobseeker find employment with another employer. By assessing the jobseeker’s overall situation, a TE authority evaluates whether the person fulfils the criteria of last resort. 

The fourth criterion is the jobseeker’s own consent and motivation. Discussions with the jobseeker are conducted to ensure their consent and motivation.

Provisions on the operations of the company are laid down in the Act on the Limited Liability Company called Työkanava Oy (242/2022). For this reason, employment at Työkanava, which carries out a special assignment of the state, is more complex than in many other jobs. 

When the Act was laid down, particular attention was paid to issues related to equality, fair treatment of people, transparency of public administration and openness. 
From the perspective of jobseekers with impaired capacity to work, it is essential that TE authorities discuss with the jobseeker the possibility of working at Työkanava. Suitability for Työkanava is always assessed in cooperation with the jobseeker. TE authorities are also required to inform jobseekers clearly about the operating principles of Työkanava and the different stages of the process. 

TE authorities adhere to the same guidelines throughout the country in the assessment of suitability. TE authorities are also provided with training on matters related to Työkanava. If necessary, a TE authority may form an expert group to assess compliance with the criteria so that all customers are treated equally.

The Ministry of Economic Affairs and Employment monitors and evaluates the operations of Työkanava as the ministry responsible for ownership steering.  It also provides the TE authorities with national guidelines on applying the Act in the same way throughout the country.

Provisions on the operations of the company are laid down in the Act on the Limited Liability Company called Työkanava Oy (242/2022). The same Act also lays down provisions on the suitability of a person to work at Työkanava. TE authorities alone can evaluate a jobseeker’s suitability for Työkanava. Therefore, the first step towards employment at Työkanava is to register as an unemployed jobseeker with TE services. 

Suitability for Työkanava will be evaluated using the same criteria in TE Offices or local government pilots on employment across Finland. 

Työkanava works closely with the Ostrobothnia TE Office, to which it reports all open vacancies. It is the Ostrobothnia TE Office’s duty to assign jobseekers to vacancies at Työkanava. The Ostrobothnia TE Office received this special assignment from the Ministry of Economic Affairs and Employment. In other words, Työkanava does not select employees for the open vacancies itself. This is because under the law, only authorities can exercise public authority.

The Ostrobothnia TE Office finds suitable employees for Työkanava’s vacancies in the customer information system of TE Offices. When a suitable jobseeker for an open vacancy is found, the Ostrobothnia TE Office will assign the person to Työkanava. This may take time, as the number of vacancies available at Työkanava is limited.

An initial interview will be organised for jobseekers working part-time (working hours at least four hours a week), followed by a job search discussion every three months. The complementary job search discussions following the initial interview may be organised at the jobseeker’s request. In such a case, the number of supplementary job search discussions may be lower and they may be organised less frequently than every two weeks.

If the part-time job lasts less than two weeks, the jobseeker must, as a rule, apply for four job opportunities in a month. In this context, part-time work is considered work in which the regular working time does not exceed 80 per cent of the maximum working time of a full-time employee.

The employment plan of a jobseeker in part-time employment that lasts at least two weeks must include a three-month review period during which the jobseeker must apply for one job opportunity. The jobseeker can meet the obligation to apply for a job opportunity by asking their employer for more work.

The reform will also improve the efficiency of services for the long-term unemployed. In addition to interviews held every three months, jobseekers will take part in a more intensive service period every six months. The period will last for one month and will include two complementary job search discussions. These discussions aim to prevent prolonged unemployment, provide jobseekers with more in-depth support for their job search and employment, and direct them to necessary services.

Based on the service needs of the long-term unemployed, they can always be offered additional personal services and support in addition to the meetings included in the service process. 

A pay subsidy is an economic benefit, granted by the Employment and Economic Development Office (TE Office) or a local government pilot on employment for promoting the employment of unemployed jobseekers, granted to employers for covering payroll costs. The employer can only receive a pay subsidy for hiring a person who has registered as an unemployed jobseeker.

With the help of the pay subsidy, a jobseeker can also obtain the kind of work for which their professional skills are not quite sufficient, or they have a disability or illness that affects the performance of tasks.

The purpose is to support the unemployed jobseeker’s access to the labour market and help employers find a suitable employee.
 

The Government’s proposal aims to promote the employment of people in a vulnerable labour market position and increase the use of pay subsidies, particularly by businesses.

The regulation of pay subsidies will be simplified. The goal is that employers will be in a better position to anticipate the terms and amount of employment subsidies they are entitled to. The amount of pay subsidy granted on the basis of the lack of professional skills will be harmonised at 50% of payroll costs, regardless of the duration of unemployment (previously 30%, 40% or 50%). The amount of pay subsidy granted on the basis of disability will be raised to 70% of payroll costs (previously 50%). In addition, the granting and payment process will be faster. As a result, pay subsidies should encourage employers, particularly businesses, to hire more unemployed jobseekers than at present.

For example, the pay subsidy granted based on the lack of professional skills for those who have been unemployed for less than a year has been 30%. In the future, it will be 50%. All employers are entitled to the above-mentioned subsidies.

If the conditions for granting pay subsidy are met, pay subsidy can be granted to another employer immediately after the employee’s previous maximum period of pay subsidy has ended.

All employers receiving a 100% pay subsidy can continue to receive a 100% subsidy for non-economic activity. If a subsidy is granted for economic activity that, according to the TE Office, has an impact on trade between Member States, the subsidy is granted as de minimis aid, of which the maximum amount receivable is EUR 200,000 over three tax years. The change brings new organisations within the scope of the 100% pay subsidy, while organisations engaged in economic activity can apply for support for their non-economic activity.

The employment of people aged 55 or over can be promoted with a new, non-discretionary employment subsidy.   

The long-term employment impact of the reform is estimated at 500–1,000 people.
 

The pay subsidy reform was part of the employment measures of Prime Minister Sanna Marin's Goverment that aimed at providing everyone with the opportunity to work in accordance with their capacity and ability to work. Employment measures form a broad, multi-sectoral package. Some of the measures will make a difference quickly, while others will have an impact on a longer term.

The projects of the working capacity programme will integrate working capacity support services into the activities of the wellbeing services counties.  The objective is to increase the use of services, in particular among those who are the most difficult to employ. Työkanava Ltd is a state-owned special assignment company, which aims to employ those people with impaired capacity to work who are in the most difficult position. The company became operational in stages during 2022.

In the Nordic employment service model, jobseekers receive individual and more intensive support in their jobseeking at an earlier stage. The purpose of early support and individual services is to prevent prolonged unemployment. Experts in TE Offices and local government pilots on employment provide advice on jobseeking, identify jobseekers’ skills and offer support services, such as training to meet the jobseeker’s individual needs. If necessary, jobseekers can also be referred to other services, such as health and social services.

Read more about the employment measures of Prime Minister Marin's Government

Summary of subsidised work in different situations based on the reform’s key proposals:
 

*employer must always meet the conditions for pay subsidy concerning the employer
**duration of the support is at most the duration of the employment relationship

Regulation will be simplified by limiting the pay subsidy mainly to promote the employment of unemployed jobseekers who are disadvantaged or have reduced working capacity. 

In the future, pay subsidy may be granted to 

• those aged 15 to 24 years 
• those aged 50 years or over 
• those with just a basic education 
• immigrants 
• those who have not been gainfully employed for at least six months, as well as 
• those with reduced capacity for work. 

These restrictions are based on EU regulation of state aid and the General Block Exemption Regulation (651/2014) adopted on the basis of it, section 6 of which deals with aid for disadvantaged workers and for workers with disabilities.
 

As a rule, the granting of pay subsidies is based on lack of skills. Employing a person who has been unemployed for less than a year requires that their unemployment would be prolonged without the subsidy.

When a pay subsidy is granted for the first time on the basis of a disability or illness, the employee’s productivity in the new role is not assessed. The continuation of the subsidy in the same employment relationship, however, is assessed on the basis of the role, as now.

The conditions for granting a pay subsidy to an employer will be amended so that there will be no impediment to granting a pay subsidy if the employer has hired an equivalent number of employees to replace the employees they have made redundant for production-related or financial reasons in the previous 12 months. In other words, the employer is not required to recruit the same persons, but the same number of employees. 

The wellbeing services counties are eligible for pay subsidies.

In the future, pay subsidies will no longer be granted to households.
 

The amount of the pay subsidy will be increased and harmonised. In the future, the amount of pay subsidy granted on the basis of lack of professional skills will always be 50% of the payroll costs. Before the change in the law, the amount of subsidy varied depending on the duration of unemployment of the person to be employed, being either 30%, 40% or 50% of the payroll costs. 

The pay subsidy granted on the basis of an injury or illness will increase from 50% to 70%.

Non-wage labour costs or holiday bonuses payable by the employer cannot be covered by pay subsidy in the future. In addition, other changes will be made to the eligible costs so that the national income register can be used more efficiently in the payment of pay subsidies.
 

The definition of eligible costs is specified in such a way that eligible costs are considered to be the wage paid to the employee on the basis of working hours or performance of the contract before the withholding of statutory insurance contributions and taxes. Pay supplements related to regular working hours and working conditions are also included.

Eligible costs do not include

• non-wage labour costs payable by the employer
• holiday bonuses
• employee benefits
• tax-free or taxable compensations
• additional work or overtime pay or cash compensation from the working time account
• the percentage of the pay that is determined on the basis of the work performance of the person employed on the subsidy or is based on the employer’s result
• pay for the period during which the employer is entitled to sickness allowance or some other benefits
   

Depending on the duration of the unemployment preceding the pay subsidy, the pay subsidy will be granted for five or ten months. 

• If the person has been unemployed for less than a year, pay subsidy can be granted for five months instead of the previous six months. On average, the subsidy periods have lasted around 5.1 months. 
• If the person has been unemployed for at least 12 months during the previous 14 months, pay subsidy can be granted for ten months instead of the previous 12 months. On average, the subsidy periods have lasted just under seven months.
• If pay subsidy is granted on the basis of a disability or illness, it can be granted for 10 months for the first time, and be extended later for a maximum of 24 months at a time in the same employment relationship. Currently, pay subsidy can be granted for the first time for a maximum of 24 months, but the conditions for granting the subsidy are stricter than in the proposed model. 

However, pay subsidy will be granted for the duration of the employment relationship at most.

If a disability or illness significantly lowers the employee’s productivity permanently or in a permanent manner, after 10 months the pay subsidy period can be extended by a maximum of 24 months at a time. 

Even in the future, a new pay subsidy can be granted for long-term unemployed persons over 60 years for the same employment relationship in periods of up to 24 months.

The subsidy for apprenticeship training can be granted for the entire duration of the training, in the same way as before. 

The ‘timeout rule’ is abolished. Previously, after the maximum duration of the pay subsidy period, the person had to be unemployed for at least 10 months before they could be re-employed with a pay subsidy. In the future, if the conditions for granting pay subsidy are met, for the same person, pay subsidy can be granted to another employer immediately after the previous maximum period of pay subsidy has ended. On the other hand, an employer cannot receive pay subsidy for the same person until three years have passed since the end of the previous wage subsidy.

The Act on Social Enterprises will be repealed and, consequently, also the relevant exceptions related to the amount and duration of a pay subsidy.
 

The employer can transfer an employee employed with the subsidy to perform work tasks for another employer (user company). Instead of the previous notification procedure, the employer will have to apply for the transfer at the TE Office or the local government pilot on employment. During the transfer, the maximum amount of pay subsidy can be the amount that the user company could be granted if it applied for the pay subsidy itself. However, the amount of subsidy cannot exceed the amount granted to the actual employer. The amount of pay subsidy is reduced for the duration of the transfer if the user company would be entitled to a lower pay subsidy than the actual employer.

The objective is to prevent distortions of competition and ensure that the tasks in the user company are appropriate from the perspective of paying the pay subsidy. The aim is also prevent distortion of competition by requiring the user company to pay adequate compensation for the transferred person. The compensation paid by the user company can be an amount that equals at least the user company’s cost of labour if it applied for the pay subsidy itself. It is not possible to set a precise ceiling for the compensation. With regard to distortion of competition, it is essential that the compensation paid by the user company for the employee is neither unreasonably high nor low. 
 

A 100% pay subsidy can be granted to an association, foundation or registered religious community (hereinafter, organisation), if:

• the person has been unemployed for at least 24 months in the last 28 months and
• the person works no more than 65% of the maximum working time in the sector. 

In principle, all employers currently receiving a 100% pay subsidy can continue to receive a 100% subsidy also in the future. According to the approved Act, it is possible to receive a 100% subsidy for non-economic activity. 

The change limits the use of the 100% wage subsidy for those organisations that engage in economic activity that, according to the TE Office, has an impact on trade between Member States. These organisations can receive subsidies as de minimis aid.  Previously, it was not possible to receive de minimis aid. 

Currently, nearly 20% of all those employed with pay subsidy are employed with a 100% pay subsidy.
 

In connection with the reform, an employment subsidy for those aged 55 or over will be introduced. The subsidy will be granted without consideration of expediency, as long as the conditions laid down in the Act are met. 

The subsidy will be granted if:

• the person to be employed has reached the age of 55 and has been unemployed for at least 24 months in the last 28 months; and
• the person hired on the subsidy works for the beneficiary under an employment contract for at least 25 hours per week or at least 65% of the maximum working time in the sector; and
• other conditions for granting the subsidy are met.

The subsidy covers 70% of the eligible payroll costs for 10 months, but no longer than for the duration of the employment relationship. The same rules on eligible payroll costs as for pay subsidy apply for this form of support.