The definition of a part-owner will change starting from 1 July 2019. After the amendment of the law, family members who work for the company but do not own a share of it will be considered employees when the Act on Unemployment Security applies to them (Act on Unemployment Security 1290/2002)
In practice, this amendment concerns those family members of the entrepreneur who do not own a share of the family company but are employed by it. In the future, a family member without a personal share, vote or other means of control in the family company and within the scope of the Employees Pensions Act, is considered an employee. The Act on Unemployment Security defines the following people as family members of an individual working in a company: spouse and individuals living in the same household in a direct line of descent or ascent (i.e. children, parents and grandparents).
On the other hand, a family member who works in the company and owns a share in it, will continue to be considered a part-owner in the future, if the influence of the part-owner in the company is divided between the person him- or herself and the other family members so that the detailed conditions prescribed by the law are met. The change will also not affect those family members of an entrepreneur who own even a small share of the family company or are insured in accordance with the Self-employed Persons’ Pensions Act or the Farmers’ Pensions Act.
The new definition of a part-owner means that as of 1 July 2019, an employee’s unemployment insurance contribution will be paid for a family member who is employed by the company but does not own a share in it. Before, a part-owner’s unemployment insurance contribution was paid for such a person.
In 2019, an employee’s unemployment insurance contribution is 1.5% of the wage. The payment liability is determined based on the payday. The determining factor is whether the family member is a part-owner on the payday.
More information about the legislative change: Government proposal 236/2018 (in Finnish)
Please check our website to see if the change in the definition of a part-owner applies to you or your family members. If you are not a part-owner or if you do not pay the wages of a part-owner, you do not need to report the issue to the Incomes Register or the Employment Fund.
You will also get more information about the part-ownership and the upcoming change from our customer service for unemployment insurance contributions: +358 075 757 0500 (on weekdays from 9 am to 4.15 pm), email: email@example.com.
When reporting information in the Incomes Register’s online service, do not forget to check Part-owner under Further information concerning the income earner.
If you are using a technical interface to report your wage information, i.e. the information is transferred to the Incomes Register directly from your own payroll system, and you need more information, please contact the system provider.
You can find more information about reporting wages on the website of the Incomes Register.
Improvements are being made to the unemployment security of an entrepreneur’s family members. The changes in unemployment security apply to the family members of entrepreneurs without a personal share, vote or other means of control in the family company, who nevertheless works for the company and whose pension insurance is in accordance with the Employees Pensions Act.
Unemployment insurance contributions will be primarily paid quarterly as of the beginning of the insurance year 2019.
In the future, a family member without a personal share, vote or other means of control in the family company and within the scope of the Employees Pensions Act, is considered an employee.
The Ministry of Finance is preparing amendments to legislation that will postpone the expansion of the Incomes Register to include pensions and benefits data until 2021. The increase in the number of users accessing salary data will, however, go ahead as planned next year. By 2020, the Employment Fund will be able to access and use data on employment relationships and salaries held in the Incomes Register in relation to processing adult education benefits. Generally speaking, this will mean that people applying for adult education benefits will no longer be required to send salary information to the Employment Fund.