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Changes in unemployment security affecting family businesses will enter into force at the beginning of July

28.06.2019 | News, SAVALnews

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In future, family members working in a family business will be considered salaried employees if they do not hold ownership or control in the company.

A legislative change affecting the unemployment benefits of entrepreneurs’ family members will take effect at the beginning of July. In future, family members working in a family business will be considered salaried employees if they do not hold ownership or control in the company. In such a case, the unemployment fund membership should be transferred from an entrepreneurs’ unemployment fund to a salaried employees’ fund.

Previously, family members were considered entrepreneurs even if they held no ownership or control in the company. This was because the definition of an entrepreneur was broader in unemployment security than in other social security.

The legislative change will apply to employment in a family business as of 1 July 2019. Entrepreneurs’ family members who have been members of an unemployment fund for entrepreneurs and do not have a share of ownership in the business should transfer their membership to an unemployment fund for salaried employees right from the beginning of July.

If work in a family business is only starting now, it is no longer worthwhile to join an unemployment fund for entrepreneurs, unless the intention is to acquire a share of ownership in the company or otherwise transfer to entrepreneurial activities.

It is important to bear in mind that the change does not apply to persons holding any share of ownership or control in the family business. People who work in a family-owned proprietorship are also excluded from this change.

How will the employment condition of a family member of an entrepreneur be fulfilled?

An employment condition that is fulfilled in an unemployment fund for entrepreneurs can be transferred to an unemployment fund for salaried employees on the basis of the so-called retroactive protection, if you join the new fund within one month of leaving the previous fund. An employment condition only fulfilled partially cannot be transferred.

In future, the employment condition of an entrepreneur’s family member as a salaried employee will be fulfilled after having been a member of a salaried employees’ fund in a non-owning position for at least 12 months, and at least 52 calendar weeks have been accumulated towards the employment condition in that period.

The criteria for the employment condition with regard to working hours and wages are the same as for other salaried employees. However, the employment condition of an entrepreneur’s family member cannot be combined with the employment condition accumulated as an entrepreneur or other employment condition accumulated as a salaried employee.

Read more: Definition of ‘entrepreneur’ for the purpose of unemployment security

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