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Liability component will be discontinued after a transition period

NEWS 29.6.2022 12.15

The additional days of unemployment security will be abolished. As a result, the employer’s obligation to pay the liability component  for employees that it has dismissed or laid off will also end. Employees born in 1964 are the last age group entitled to the additional days and for whom the employer is obliged to pay the liability component. Employees born in or after 1965 are not entitled to the additional days, and the employer is not obliged to pay the liability component for them. This means that the transition period for the liability component will end by the year 2035.

As the minimum age for the additional days is raised, the maximum age for imposing the fee will also increase. In certain cases, the employer pays the former employee’s unemployment allowance until the employee in question reaches

  • the age of 65 (individuals born in 1963 and 1964)
  • the age of 64 (individuals born in 1961 and 1962)
  • the age of 63 (individuals born in or before 1960)

The employee’s right to additional days will be replaced with the right to receive restructuring protection and the employer’s obligation to pay the  restructuring protection fee as from 1 January 2023. 

If the employer is obliged to pay both the restructuring protection fee and the liability component for the same employee during the transition period, the restructuring protection fee will be deducted from the liability component. 

The amount of the liability component and the restructuring protection fee is determined on the basis of the employer’s payroll subject to the unemployment insurance contribution. The smallest employers will not be obliged to pay the restructuring protection fee. The same minimum and maximum payroll levels will apply to the liability component and the restructuring protection fee. 

Read more:

Liability component on the website of the Employment Fund 
Media release 29 June 2022: The new act on restructuring protection will enter into force in January 2023