EMCC European Monitoring Centre on Change

Pay Security Act (866/1998)

Finland
Phase: Management
Typ:
  • Income support for workers
Zuletzt geändert: 09 July, 2020
Ursprünglicher Name:

Palkkaturvalaki (866/1998)

Englischer Name:

Pay Security Act (866/1998)

Coverage/Eligibility

According to the Pay Security Act, employees (including part-time and fixed-term workers) are entitled to pay security in the event of the employer's insolvency. An employer is considered insolvent if the employer is unreachable or has terminated the business activity, and it can be proven that the amount in question cannot be paid from the assets; or if the employer has been declared bankrupt or else been established to be unable to pay debts.

Main characteristics

In the case of employer insolvency, wages and other claims of employees resulting from the employment contract are secured by the national pay security system, which is financed by the employers' contribution to unemployment insurance.

An employer is considered insolvent if the employer is unreachable or has terminated the business activity, and it can be proven that the amount in question cannot be paid from the assets; or if the employer has been declared bankrupt or else been established to be unable to pay its debts.

The guarantee covers all claims that have become due within three months before applying for the guarantee, irrespective of the duration of the employment or the type of contract. The maximum amount to be paid per employee and employment contract with the same employer is €15,200.

The pay security system is administered by the regional Centres for Economic Development, Transport and the Environment (ELY Centres). The Centres make decisions in pay security matters and handle other functions connected with enforcement of the Act. A guarantee application may also be handed in at a local job centre.

Funding

  • Companies

Involved actors

Andere
The regional Centres for Economic Development, Transport and the Environment (ELY Centres) make decisions in pay security matters and handle other functions connected with enforcement of the Act. Companies (funding) through social contributions.

Effectiveness

The number of pay security beneficiaries was some 5,800 in 2017 and 5,200 in 2016. 

The pay security costs were:

  • €26.3 million in 2017 
  • €31.2 million in 2016
  • €27.4 million in 2015
  • €35.4 million in 2014
  • €39 million in 2013.

Strengths

No information available.

Weaknesses

In recent years, the Pay Security system has been congested, with some people having to wait for their money for nearly a year. As of April 2018, the ELY Centres estimate processing periods of approximately six months. 

According to specialists on pay security at ELY Centres, employees applying for pay security sometimes do not know exactly what and how much their employers are due, which complicates the process. Employers may also lack adequate bookkeeping, making it impossible to prove facts about potential debts.

Beispiele

No information available.
Quellen
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