Employers wanted to cut unemployment insurance premium to 1.95 pct

Photo: Caro / Scanpix

The Estonian Employers Confederation originally wanted the unemployment insurance premium to be reduced to 1.95 percent next year, compared with the proposal made by the Unemployment Insurance Fund's supervisory board on Tuesday to cut it to 2.1 percent.

«The employers' proposal to cut the rate to 2.1 percent takes a conservative view on the subject. It also takes account of the reduction of the forecast of economic growth, because initially our proposal was to reduce the rate to 1.95 percent,» said the manager of the Estonian Employers Confederation, Toomas Tamsar.

«In our opinion there's neither a moral nor financial justification to collecting this money from the employees and employers today. The purpose of the unemployment insurance premium is to partially compensate people who have lost their job for lost income and help people back to the labor market. Using the unemployment insurance premium to fulfill other duties of the state is not right,» Tamsar said, citing the already big reserves of the Unemployment Insurance Fund.

If the government endorses the proposal made by the Unemployment Insurance Fund's supervisory board on Tuesday, 50-60 million euros more will be left in the hands of companies and individuals.

The supervisory board of the Estonian Unemployment Insurance Fund has made a proposal to the government to cut the size of the unemployment insurance premium from the present 3 percent to 2.1 percent in 2014, whereby the ratio paid by employees would be 1.4 percent and that paid by employers 0.7 percent.

The proposal was approved by the supervisory board on Tuesday with votes four to two. The votes in favor came from the representatives of unions and employers and the votes against from the representatives of the state.

The rate of the premium this year is 3 percent, with 2 percent paid by employees and 1 percent by employers.