Government’s Solutions for the Immigration Quota Not an Alleviation for the Problem

Although the government has taken steps to find a solution for the immigration quota problem, the Chamber finds that the approved solutions do not eliminate the problem to the extent that the special working group was hoping for with their long work. The Chamber thinks it is necessary to deal with the quota problem more substantially, and therefore made additional proposals to the government for the simplification of hiring aliens.

The government did not support the proposals of the working group it established

The Chamber does not understand why did the government support only two of the five proposals made by the immigration regulation working group created by the Minister of the Interior. In the Chamber’s opinion, two of the proposals that would have had the most impact were not supported – exempting from the immigration quota aliens with the residence permit issued for up to two years and aliens whose salary is at least 1.5 times the average salary paid in Estonia. At that, the proposals were not submitted by entrepreneurs, but a compromise solution offered by a working group consisting of a broad spectrum of members including representatives of business organisations, ministries, state authorities, scientists and trade unions.

Negative impact on the state’s wallet and reputation

The immigration quota for the year 2018 is 0.1% of the permanent population of Estonia, i.e. 1,315 persons. This does not include return or emigration of aliens, or the fact if any of the sectors have a higher rate of unemployment or which qualifications do the people have. According to today’s prognosis, it is rather clear that the quota will be filled already before summer. This is not alleviated by the measures approved by the government. Although in addition to recruiting employees from third countries, it is necessary to deal with other measures, the limitation set by the quota has a much broader negative impact.

In addition the entrepreneurs’ ability to find employees, it has a negative impact on the state’s tax revenue – the using schemes for bringing employees to the country through brokerage companies which could have problems in terms of salary conditions as well as observing the ensuring and checking of working conditions, will become more common. Moreover, it will have a negative impact on the reputation of the Republic of Estonia. Such limitation will send out a signal that aliens who contribute to the development of Estonian economy are not welcome here.

Reliable employers could have special conditions

In order to improve the situation, the Chamber made an alternative proposal to the Government in case the proposals developed by the committee are not realised. According to the proposal, aliens who are employed with a reliable employer can be exempt from the quota. Such employer could be an employer that meets the following criteria:

• the employer has operated for a certain period (e.g. at least 3 years),
• the employer has no tax arrears,
• the annual reports have been submitted in due time,
• the employer pays labour taxes on at least the average salary of its principle activity per employee (as a total of the company) (the applicable salary requirement for aliens would remain in force),
• additionally, a certain turnover or number of registered employees could be considered for a reference period.

Average pay requirement should be replaced with sector average

In addition to fulfilling the immigration quota, many companies are worried about the requirement of minimum salary to be paid to aliens. Namely, aliens employed in any sector have to be paid the average salary paid in Estonia. However, such requirement makes employing aliens more difficult in sectors where the average salary of the area of activity is less than the average salary paid in Estonia (e.g. accommodation, catering, plant production and animal husbandry, furniture production, retail). In these sectors employers are required to pay aliens a higher salary only because they are aliens.

For the purposes of alleviating lack of labour force in certain sectors, the Chamber proposed to replace the requirement of average salary paid in Estonia set out in the Aliens Act with the average gross salary of the employer’s principal area of activity. Such requirement will allow employers paying aliens the same salary as is paid to local employees without discriminating any sector.