Becoming an entrepreneur changes your social security status in many ways. An entrepreneur can remain a PAM member for a limited time, but the entrepreneur status should be reported to PAM.
If you become an entrepreneur, let PAM know as soon as possible, even if you continue to work as a salaried employee in the private service sector alongside your business activities. You can make this announcement through the e-service or using this form (in Finnish).
PAM recommends that when you become an entrepreneur, you transfer to the Unemployment Fund for Finnish Entrepreneurs (SYT). The Unemployment Fund for Professionals and Entrepreneurs merged with SYT in the beginning of 2020.
They can tell you more about unemployment security for entrepreneurs.
As an entrepreneur, you can remain a member of PAM and its Unemployment Fund for a maximum period of 18 months. During this time, you will have to pay your membership fee according to your previous salary. If you continue to work as an entrepreneur after the 18-month period, your membership in PAM and its Unemployment Fund will expire. If you wish, you can continue as a member of the union (not the Unemployment Fund), but you will have to report this separately to PAM.
The purpose of the 18-month period is to ease the transition from employee to entrepreneur.
An entrepreneur who falls unemployed during the 18-month period is still entitled to the same earnings-related unemployment allowance as salaried employees, if the maximum payment period for the allowance has not been exceeded. The same transitional period applies when an entrepreneur becomes an employee, ending when the employee’s work requirement is met.
Are you unwittingly self-employed?
According to the Unemployment Security Act (1290/2002), even a paid employee may be an entrepreneur. In particular, if you work in a family-owned business, you should check whether you fall within the unemployment insurance scheme for self-employed people or employees. It’s a good idea to check your own status as soon as you start work, because the PAM Unemployment Fund will not pay earnings-related unemployment allowance to self-employed people. There is a separate unemployment fund for entrepreneurs and self-employed people.
Are you self-employed under the Unemployment Security Act?
Anyone who is obliged to take out insurance under the Self-Employed Persons’ Pension Act (YEL, 1272/2006) or the Farmers’ Pension Act (MYEL, 1280/2006) for their main occupation is considered to be an entrepreneur.
A part-owner of a company covered by another statutory pension scheme is also considered to be an entrepreneur, when he/she works in a leading position in the company and owns at least 15% or his/her family members or he/she together with the family members own at least 30% of the company.
Furthermore, a part-owner will also be recognized as an entrepreneur when he/she works in a company where he/she or his/her family members or he/she together with the family members own at least 50%.
Part-time entrepreneurship does not preclude you from belonging to the PAM Unemployment Fund. Your earnings from part-time entrepreneurship will be taken into account as income when determining your adjusted earnings-related unemployment allowance.