Changes Related to External Workforce Must Be Implemented Urgently
On March 10, the Ministry of the Interior and the Ministry of Economic Affairs and Communications sent 12 amendments to the Aliens Act to the Constitutional Committee of Parliament of Estonia. The Chamber of Commerce proposed to the Parliament of Estonia to adopt amendments related to Ukrainian war refugees as soon as possible. In addition, we strongly supported a number of other proposals. For example, there is a positive change for companies which allows an employer to hire a foreigner for a short period of time for three years, instead of the current one year. However, we also found some problematic provisions in the amendments, which we requested to be removed from the draft.
Changes related to Ukrainian war refugees
The Chamber of Commerce supports the amendments to the Aliens Act concerning Ukrainian war refugees, and we informed the Constitutional Committee of Parliament of Estonia that these amendments must enter into force as soon as possible. For example, the proposal includes an amendment providing a legal basis for the entry and residence in Estonia for a foreigner who may be granted temporary protection in Estonia, and for a Ukrainian citizen who resided in Estonia before February 24, 2022, if the foreigner has no other legal basis for temporary residence.
In addition, the list of proposals includes an amendment according to which the above-mentioned foreigners are not covered by the regulation on short-term employment. Among other things, this change will allow Ukrainian citizens who were already working in Estonia on the basis of a short-term employment registration before the start of the war, and whose right to short-term employment is about to expire, to continue working in Estonia. According to the amendment, the above-mentioned foreigners must be paid 0.8 times the average salary of their field of activity.
Temporary residence permit for short-term employment
The change which allows foreigners to work in Estonia for three years as a short time, instead of current one year, is also having a very positive effect on many companies. That is, according to the amendment, a temporary residence permit for short-term employment is added to the law. Foreigners who have worked in Estonia for at least nine months directly before applying for a residence permit may apply for such a residence permit for up to two years, if the employment continues with the employer who has registered the short-term employment, the employer is trustworthy, and the employer has paid the foreigner adequate remuneration during the period of short-term employment. Such a residence permit is also exempt from the immigration quota. The amendment will enter into force on January 1, 2023.
Discounts for top specialists and growth companies
The Chamber of Commerce also supports a change that reduces the requirement for a top specialist salary criterion from twice the current Estonian average salary to 1.5 times the average salary. In addition, we supported incentives for growth companies, which allow growth companies to employ foreigners under more lenient conditions. In the letter sent to the Parliament of Estonia, we emphasize that it is reasonable to implement these amendments to the law as a matter of urgency. According to the amendments, these amendments will enter into force on January 1, 2023.
Changes related to remuneration
According to the amendment, short-term employment will only be allowed to be registered for full-time employment. Currently there is no such requirement in the Aliens Act. The Chamber of Commerce supports the principle that the salary criterion for foreigners should be legally clear and avoid cases where part-time work is misused to deviate from the salary criterion. At the same time, we see that this amendment needs further discussion and impact analysis, which is why we proposed to the Parliament of Estonia to delete this amendment from the urgent draft.
As a negative effect of this change, we see that it may unreasonably restrict the ability of the employer and the foreigner to agree on working hours that satisfy both parties. For example, if a foreigner wishes to work in Estonia for a short period of time 8 hours a day from Monday to Thursday, the employer agrees and the foreigner’s salary for part-time work is 2,000 euros, the amendment does not allow the parties to enter into such an agreement. In addition, we pointed out to the Parliament of Estonia that the prohibition of part-time work may not resolve disputes related to the salary criterion. For example, in the future, the parties may agree that the foreigner works full-time but takes very often unpaid leave, as a result of which his or her average income may still be below the salary criterion.
According to the amendment, a requirement is added to the Aliens Act that if a foreigner works on the basis of a temporary residence permit intended for work, the employer must pay the foreigner at least the Estonian average salary regardless of the workload agreed in the employment contract. After the amendment enters into force, a situation may arise where the foreigner can no longer work for several different employers. For example, if a foreigner works for one employer with a workload of 0.9 and receives at least the Estonian average salary and with a workload of 0.1 for another employer, then the other employer should also pay at least the Estonian average salary for part-time work. Such a solution does not make sense. The Chamber of Commerce proposed removing this amendment from the draft as it is not an urgent change and the ministries have not previously discussed this change with stakeholders.
Change the terms of temporary agency work
The amendments also include a number of changes related to temporary agency work. For example, ministries proposed changes to the deposit requirement. If today a temporary employment agency must have a deposit of at least ten percent of the foreigner's monthly salary fund, then according to the amendment, the guarantee requirement will increase to the foreigner's one-month salary.
The Chamber of Commerce proposed to the Parliament of Estonia to remove the provisions related to the amendment of the terms and conditions of temporary work from the draft, as these amendments require additional justification and analysis and discussion with stakeholders. Moreover, these are not such urgent changes that should be discussed in the current draft.
You can find out more about the amendments proposed by the Ministry of the Interior and the Ministry of Economic Affairs and Communications HERE.