Questions and answers on Nordic labour market service model
The Nordic labour market service model enters into force on 2 May 2022.
In the Nordic labour market service model, jobseekers apply for work on their own initiative and receive support for the process from the TE Office or from municipalities participating in the local government pilots to promote employment. Each jobseeker’s need for services and prospects to apply for work are assessed individually.
- Unemployed jobseekers will receive more individual support for their job search.
- The first meeting between a jobseeker and a specialist will take place earlier than now. After this, support for job search will be more intensive.
- Jobseekers will have more opportunities to influence their job search. As a rule, jobseekers would select the job opportunities they apply for and when they apply for them.
- Jobseekers would still have to apply for work in order to receive unemployment benefits. What is new is that, as a rule, jobseekers must apply for four job opportunities per month. Active jobseekers already do this now.
- If the jobseeker’s skills to look for work or to be employed were found to be lacking, the jobseekers would get access to services quicker.
- Sanctions related to unemployment benefit would be staggered. In the first case of forgetfulness or neglect, a jobseeker would receive a reminder, which would not affect the payment of unemployment benefits. If a jobseeker repeatedly neglects their employment plan, the sanctions will become more severe.
The above-mentioned changes are described in more detail in other questions and answers on this page.
The employment rate in Finland is lower than in the other Nordic countries. A higher employment rate is necessary to maintain and develop a sustainable welfare state.
Finland also lags behind the other Nordic countries in terms of the quantity and quality of employment services. The Government aims to change the course of labour market policy from passive to active, as in other Nordic countries, and to target services more efficiently than at present.
The Nordic labour market service model is one of the Government’s measures to support rapid employment and re-employment. The Government also wants to make the sanctions for unemployment security more reasonable so that the rights and obligations are in better balance. These consequences, such as sanctions, have been considered unreasonable.
The Nordic labour market service model has a positive impact on public finances. According to estimates, the positive impact will be about EUR 230 million. The reform will have a full effect on public finances from 2025.
The estimate does not take into account the costs arising from increased resources of TE Offices and participating municipalities (EUR 70 million per year) and an increase in unemployment security expenditure (approximately EUR 33.4 million per year).
The increase in unemployment security expenditure is caused by changes to sanctions. On the other hand, housing allowance expenditure will decrease by an estimated EUR 2.4 million per year and social assistance expenditure by an estimated EUR 14.5 million per year as a result of the reform.
In addition, there will be one-off costs related to the development of information systems.
The Nordic labour market service model is estimated to increase employment by about 9,500–10,000 people.
The most significant impact on employment is related to meetings with the TE Office or the participating municipality that support job search. In the early stages of job search, meetings will be held every two weeks. The aim is to provide more support to jobseekers at different stages of job search.
Based on research, regular interaction with jobseekers, active employment services and job search monitoring will shorten the periods of unemployment. For example, an evaluation study on regular interviews with unemployed jobseekers found that the interviews make it easier to refer jobseekers to services and promote their activation and employment in the open labour market.
The impact on employment is expected to be fully achieved from the beginning of 2025.
The government proposal includes more information on research literature and the methods for calculating the impacts on employment.
The basic principle of the Nordic labour market service model is that jobseekers are not left alone. The TE Offices and municipalities participating in the local government pilots on promoting employment will offer considerably more support to jobseekers as soon as they register as jobseekers.
Support is also available more quickly. An initial interview where the service needs of jobseekers will be assessed and an employment plan formulated will be organised within five working days of registration as a jobseeker. If necessary, the TE Office or participating municipality will contact the jobseeker before the initial interview to assess their situation and to provide instructions for applying unemployment benefit, for example.
The jobseeker will meet a customer service representative from the TE Office or the participating municipality every two weeks for the first three months. The objectives of each meeting will be determined based on the jobseeker’s individual needs.
The more intensive service period will be repeated for one month if the job search has lasted six months. Between intensive service periods, jobseekers will apply for work on their own initiative and participate in the services in accordance with the employment plan.
At present, the TE Office organises an initial interview with the jobseeker within two weeks, after which the interviews take place every three months.
The jobseeker regularly meets a specialist from the TE Office or participating municipality for job search discussions. Some meetings can be procured as outsourced services from private service providers.
In the early stages of job search, the discussions (the initial interview) will take place in person at the TE Office or the municipal office, as a rule. However, exceptions are possible for a justified reason, such as an exceptionally long distance.
After the initial interview, meetings are held in the manner considered most suitable. The jobseeker may also express a wish for the way meetings should be organised.
In principle, no. Travel expenses could, under certain conditions, only be compensated if an unemployed jobseeker requires, due to a disability or medical condition, a transport service in order to attend in-person services at the TE Office or the municipal office.
If the trip to the TE Office or municipal office is exceptionally long, the meeting can be organised in another manner.
The situation of each jobseeker will be assessed individually. At the start of the job search, the jobseeker and the TE Office or participating municipality will create a personal employment plan, where they will agree on services supporting the job search and the number of jobs the jobseeker should apply for.
As a rule, the jobseeker should apply for four jobs each month. Exceptions to this rule are possible due to incapacity for work or lack of job opportunities to apply for, for example. No requirements will be posed on jobseekers beyond their capacity.
As a rule, jobseekers will select the job opportunities they apply for. TE Offices and municipalities participating in local government pilots on employment could also continue to submit job offers to jobseekers.
Job offers are binding if the job search has lasted six months starting from the initial interview. The job offer is not binding if the jobseeker has already applied for the agreed number of jobs before receiving the job offer and reported this to the TE Office or municipality.
Binding job offers do not apply to part-time employees. The number of working hours is not relevant in this respect.
Jobseekers may be required to apply for a maximum of four job opportunities per month. This includes jobs offered by the TE Office or municipality.
Example: A jobseeker has agreed with the TE Office or municipality to apply for four job opportunities per month. The TE Office submits a job offer to the jobseeker. In addition to the job offer, the jobseeker must apply for at least three other job opportunities during the month.
If the jobseeker does not apply for the job in the job offer, they will first receive a reminder. If the jobseeker neglects to do this for the second time, they will not receive unemployment benefit for five days on which benefits are paid. After that, the sanctions will gradually become more severe. For more detailed information, see the question “What if the jobseeker does not apply for jobs as agreed?”
At present, job offers made by the TE Office require that the jobseeker contact the employer and notify the TE Office of the application by a certain deadline. Unemployed jobseekers who turn down a job offer without a legitimate reason may lose the right to unemployment benefit for a certain period, usually 60 days.
The options for fulfilling the job search obligation could include submitting a job application for a vacancy, submitting an open job application to a company that is not actively hiring, and other ways of contacting prospective employers directly.
Jobseekers should apply for jobs they could reasonably assume to get, in other words, vacancies that they would apply for in order to find employment in any case.
As a rule, jobseekers will report on their job search through an online service. If jobseekers do not have access to the Internet, they may report on their job search in another way.
Jobseekers should apply for jobs they could reasonably assume to get. No requirements will be posed on jobseekers beyond their capacity.
The labour market situation in the region will be taken into account in the employment plan, which lays down the number of jobs the jobseeker should apply for. If no relevant vacancies are available, the jobseeker will not be obligated to apply for work.
No, because jobseekers should apply for jobs they could reasonably assume to get. From the employer’s point of view, jobseekers are potential employees.
Once the lay-off has lasted for three months, the number of job opportunities that the laid-off person must apply for will be agreed on in the job search discussion.
For those laid-off part-time, the same principles as to jobseekers who work part-time will apply. In such cases, the jobseeker must apply for one job opportunity during a three-month period.
In the activation model, jobseekers had to be employed or participate in certain services in order for their unemployment benefits not to be reduced. The amount was reduced even if the jobseeker’s applications for work were unsuccessful.
In the Nordic labour market service model, jobseekers will not lose unemployment benefits and their amount will not be reduced as long as the jobseeker has applied for work and implemented the employment plan.
In the Nordic labour market service model, jobseeker will receive a reminder for the first case of forgetfulness or neglect. The next time, jobseekers will be sanctioned to lose the benefits for five days on which benefits are paid. If this happens again, jobseekers will lose the benefits for 10 days. After that, jobseekers lose their right to unemployment benefit until further notice.
Currently, jobseekers will lose benefits for 60 days if they fail to apply for the job offered by the TE Office. In repeated cases, jobseekers will lose their right to unemployment security until further notice.
Jobseekers who refuse to take a job without a valid reason will be sanctioned not to receive unemployment benefits for 45 days.
Example: A jobseeker has been offered a job that they have applied on their own initiative or that they have been offered by the TE Office or municipality, but the jobseeker subsequently refuses to take the job without a valid reason.
Currently, refusal to take a job without a valid reason will in principle result in a 90-day sanction period when the jobseeker will not receive unemployment benefits.
An initial interview will be organised for all jobseekers, including those who have been laid off. The interview can also held on the telephone. If the laid-off person so requests, five supplementary job search discussions may be organised during the first three months.
If the lay-off has lasted for three months, a job search discussion will be held with the laid-off person. The discussion will not be held if the lay-off is about to end.
If the lay-off has lasted six months, two supplementary job search discussions will be organised for those who have been fully laid off and for those whose working hours have been reduced to under four hours as part of the lay-off.
The Nordic labour market service model will increase the resources of TE services by EUR 70 million a year. About 1,200 experts will be hired for customer service. This represents an increase of 40% compared with the resources of TE Offices in 2019.
The resources of TE services were temporarily increased because of the coronavirus crisis. The increased resources of the Nordic labour market service model will be permanent, so they will be calculated in relation to the human resources of TE Offices during normal conditions.
New permanent funding for the Nordic labour market service model will be allocated to organising the service process for individual customers. This means a significant increase in customer service for jobseekers in particular.
The President of the Republic approved the act on 30 December 2021. The changes entry into force on 2 May 2022.
Implementation of the reform will be supported by guidance, training and other means.
The resources for implementing the reform are already available to TE Offices and participating municipalities from the beginning of 2022.