Recent amendments to the Aliens Act have introduced a number of measures aimed at addressing the shortage of workers in Estonia. These include excluding top-level specialists from Estonia’s annual work immigration quota and extending the maximum term a foreign national can work without a work permit to 12 months. There are also tougher measures to combat illegal employment. The key changes are as follows:
- Top-level specialists are now exempted from Estonia’s annual work immigration quota. A top-level specialist, as defined in the Aliens Act, is an alien (non-Estonian citizen) with professional qualifications in any area to whom the employer registered in Estonia consents to pay at least double the Estonian annual average gross salary, as published by Statistics Estonia, for working in his or her field of specialization in Estonia. According to Statistics Estonia, the annual average monthly gross wages and salaries in 2017 were €1,221.
- Short-term employment by foreign employees, if registered with the police and border guard, can be carried out without a work permit now for up to 12 months (365 days during a 455-day period), as opposed to 9 months.
- The amendments have introduced a language proficiency requirement (A2 level proficiency or higher) for immigrants who have lived in Estonia on a fixed-term residence permit for at least five years and wish to seek a new residence permit or extend their existing one. This requirement will not apply to aliens who were issued their first residence permit before July 15, 2018.
- Employers that hire employees staying in Estonia with no legal basis, that fail to fulfil the conditions for aliens working in Estonia, or that fail to pay the correct salaries in accordance with the Aliens Act may now face a maximum fine of €32,000, an increase from €3,200. The Public Procurement Act also includes an amendment that provides for the removal of a tenderer from a public procurement procedure if the tenderer has been punished for enabling the violation of conditions of employment of an alien in Estonia.
- The police and border guard will also have the right to prohibit the economic activities of individuals or companies who systematically breach the conditions under the Aliens Act.
The immigration quota, which applies to nationals of countries outside of the European Union and the European Economic Area who want to work in Estonia, is currently 0.1 percent of the population per year (1,315 for 2018) and it has in principle stood at this level for more than two decades. Over the years, many exemptions from the quota have been introduced. For example, the quota does not cover citizens of the United States or Japan, or foreigners who are granted a residence permit for working in an information and communications technology (ICT) position or in a start-up company. Despite the exemptions, the quota has been maxed out in the last few years–initially in December 2016; in the following years it was reached in July (2017) and April (2018). Alongside this, the local workforce has not been meeting the growing economy’s needs. According to the president of the Estonian Chamber of Commerce and Industry, Estonia needs several times more foreign workers than are currently coming in.
The labor shortage among Estonians has made the need for foreign workers more pertinent in order to keep up with economic demand. Employers have been calling for changes for some time and many feel these reforms will be insufficient to solve the problem. The minister of interior has said that devising smart and well-thought-out solutions for attracting foreign labor will be an ongoing project.
Written by Anu Kirss of TGS Baltic and Roger James of Ogletree Deakins
© 2019 TGS Baltic and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.