The Government proposes that there would be stricter supervision of work-based residence permit holders. In the future, employers will be required (under the threat of sanction) to file a notification with the Finnish Immigration Service (Migri) if a work-based residence permit holder is no longer employed by them. Ordinarily this would immediately enable Migri to withdraw the permit under Section 58(5) of the Aliens Act. The government proposes that there would be a 3 month, or in some cases 6 month, “protection time” after the notification where a work-based residence permit could not be withdrawn just because the permit holder is not employed. The default protection time would be 3 months, and there would be a 6 month time for persons falling into the following categories:

Holders of an EU blue card, residence permit for a specialist, intra-corporate transferee or startup entrepeneur. Persons who have resided in Finland for more than 2 years with any work-based residence permit.

After the protection period expires, if the residence permit holder is still unemployed, Migri may initiate a procedure for withdrawing the permit. The power is discretionary and requires that Migri follow a process, namely that they must contact the permit holder to find out what is their situation, determine if their situation is special in any way, determine if they could apply for and be granted some other kind of residence permit and also determine on an “overall consideration” if the permit should be withdrawn.

The new system departs from the current (ambiguous) practice where there was no supervision of permit holders and absent any employer notification to Migri, a work-based residence permit holder could continue residing in Finland until the expiry date of their permit, regardless of their employment situation. It appears that there is not much critique of the principle behind the change, which is that employment based residence permits should be for people who are participating in the labour market, but the critique is more directed in the approach the Government has taken to try and resolve this problem.

The proposal has received significant criticism from both business leaders, immigrants and worker groups. During community consultation, only 2 opinions out of 120 supported the proposal, with a majority of opinions stating that the proposed protection periods are not sufficient.

Unsurprisingly, the Government has not backed down on the matter and is going ahead with the proposal. They have made a number of statements in defence of the proposal, which will be addressed in this post.

Defence 1: The current law already requires that work-based residence permits are for work and may be withdrawn if they are being misused.

• The change in the law is small, but the change in practice is to become much stricter
• Misuse is not a significant enough problem to warrant such a strict change.

The requirement for work-based residence permit to be issued is that there is a valid employment agreement. A permit may be withdrawn if the conditions for its issue no longer exist. Withdrawal was never a requirement. However, it is probably true that the spirit of the law was that work-based residence permits are for work and the previous monitoring approach was inadequate. Given that the policy was ambiguous before, intepretation and enforcement lent itself more in the direction of leniency towards the permit holder and internal guidelines for the exercise of discretion were revised last year such that permits won’t be withdrawn if Migri is aware that unemployment has lasted shorter than 3 months.

Now that the protection periods are being codified in the law, the interpretation of how the discretion is exercised is intended to move in a more strict direction (indeed, this is how it is phrased in the Government Programme, that a work-based residence permit holder would “have to leave the country after 3 (or 6) months of unemployment”). A change in the law to clarify the situation in this way leaves to a subtle but important change in intepretation and application practice.

The need for change in this area also assumes that misuse is a serious enough problem to be worth doing something about. Unfortunately, the government’s own numbers on the matter sourced from VATT (the state economic research agency) don’t exactly paint a picture of a pressing problem to be solved. Of course it is hard to measure whether someone “intends” to participate in the labour market from registry data alone, but we can assume that there is some likelihood that if unemployment (defined as lack of income on the incomes register) lasts a very long time that there is no intention to participate. In 2021, there were only 20 unemployment episodes lasting greater than 2 years, out of 628 unemployment episoides, which was around 0.07% of all work-based residence permit holders. Yes, the problem is, at best, point zero seven of one percent of the total population of work-based residence permit holders. That doesn’t exactly look like a serious enough problem to be proposing such a widely contested rule change over (nor would it be expedient to spend such huge amounts of political capital on such a tiny problem).

Defence 2: A similar practice is already in use in other developed countries, such as Sweden, Denmark, Canada, Australia, UK and the USA

• Similar systems across the world face similar criticism and have proven problematic in practice.
• The protection periods should be calibrated to the dynamics of the local labour market, not copy-pasted from elsewhere.

Similar systems are indeed in use across the world, but it does not mean that Finland should copy them directly. Again, the principle that a work-based residence permit is for participation in the labour market is not uncontraversial. The challenge is how do you implement this without the negative side effects. In the listed countries, a residence permit or visa is withdrawn after a fixed period of unemployment, for example two to six months. Public discourse in those countries where this rule is in use indicates that the negative side effects of such a strict time limit are considered undesirable. For example, the “grace period” for an H1-B visa holder in the United States is two months after the employment relationship ends. During times of low labour availability, this grace period is usually sufficient to find new employment. But during worse economic times, the time limit is not sufficient. This has resulted in, for example, downsizing technology companies to keep their laid-off staff “on the payroll” for an extended period, particularly so that H1-B visa holders would have a longer amount of time to find new employment. In the worst case, it results in qualified individuals with local work experience having to leave the country, regardless of whether they would have had good prospects of being re-employed later. This is a loss for almost all parties involved.

In any event, the protection periods should not be taken directly from other countries which have different labour market dynamics, but instead should be tuned to the local labour market upon which they are being applied. In Finland in particular, it is known that hiring processes can take an extended period of time, time that might go longer than what the remaining protection period permits.

Defence 3: The number of people impacted will be small

• The direct impact is small, but the indirect impacts will be felt by all work-based immigrants.

The VATT study showed that in any given year, around 1% of work-based residence permit holders were unemployed. Therefore the impact is small, because only some amount smaller than 1% (0.49%) would experience an unemployment episode of greater than 3 months.

The direct impact is small, but this masks the indirect effects. The first thing to pay attention to is that 49% of all unemployment episodes by work-based residence permit holders last 3 or more months and 40% last 6 or more months. So from the perspective of a work-based immigrant, losing your job (which can happen for many reasons beyond your control!) means, on average, a 49% or 40% probability of having your residence permit withdrawn.

For any immigrant, such a number is very scary. When you are building a new life in a new country, always on the back of your mind is the prospect of something going wrong and having to return to your country of origin. Such a return would mean a waste of efforts put in to the new host country and also having to “re-build” your life in the country of origin, or a different country. To be told that there is now this new factor which is not fully within your control (employers can have lay-offs due to a bad financial situation and start-up companies can easily run out of money if the business does not work out) adds to the everyday anxieties faced by all work-based immigrants.

Defence 4: Persons with a long-term stay can apply for a permanent residence permit, after which they won’t be affected by these rules

• The time taken to become eligible for a permanent residence permit is often longer than stated due to the way that the eligibility rules are written.
• In the future it will become significantly more difficult to obtain a permanent residence permit.

It is true that a person may apply for a permanent residence permit after 4 years. However, those 4 years must be 4 years with a continuous residence permit. Time with a temporary residence permit is not counted at all. In addition, the processing time for a permanent residence permit can be long. So in practice, the total time to receive a permanent residence permit can be quite long, much longer than the 4 year period of residence, which is effectively a minimum time.

Continuous residence permits (type A) are not always issued as a first residence permit. If the reason for coming to Finland was studies, university studies prior to 2022 or an initially temporary work contract, then a temporary residence permit (type B) is issued.

In any event, the Government also plans to significantly tighten the eligibility criteria for obtaining a permanent residence permit in the future. In the future, the applicant must have a two year work history, limited recourse to social security, good Finnish or Swedish language skills over a 6 year residence period. A 4 year residence period is provided only for: Persons with a yearly income above 40,000 euros, or Persons with a masters degree recognized in Finland, or Persons with a 3 year work history and “particularly good Finnish or Swedish language skills”.

Its still unclear what the Government means when they say “good” or “particularly good” Finnish or Swedish language skills, but its worth noting that the pass-rates for the National Certificate of Language Proficiency (YKI) at the intermediate level (B1 or higher) are around 46%, so its not exactly straightforward for people to reach that level of proficiency with the currently avaialble resources.

There is also a proposal to issue a permanent residence permit to persons who have graduated with a masters degree in Finland and have demonstrated their language skills, but the details of this proposal are also unclear.

As a whole, it is disingenous for the Government to claim that long-term residents won’t be subject to the rules affecting work-based residence permits, because the road to permanent residency is not as straightforward as it looks and is actively being made more difficult by the Government itself.

Defence 5: The rules are no longer as harsh, they have been fixed by providing a 6 month period in certain cases

• The rules were adapted, but the data still shows that they are unnecessarily harsh.
• The scope of the adaptation is limited and has some unusual edge cases.
• The adaptation is effectively the result of a compromise, whereby the position of immigrants was made worse in other aspects than what was originally written in the Government Programme.

Without a doubt, the change in the government’s position is an improvement from the previous position, which provided for a three month time limit in all cases, something that was clearly unreasonable. Effectively the government provided for a 6 month period for all persons holding a residence permit for a specialist, intra-corporate transferee or startup entrepeneur and later provided for a six month period for all holders of work-based residence permits provided that they held a work-based residence permit for at least 2 years.

Its worth noting that the first of these changes was the result of a re-negotiaton of immigration policy of the Government Programme, where the “trade” in this case was to increase the minimum required period of residence to apply for naturalization by one year in all cases (as opposed to only providing for an 8 year period of residence in the general case) and also to prohibit persons who had applied for a residence permit on the grounds of refugee status or international protection from later applying for a residence permit for studies without first leaving Finland. The second of these changes came only to comply with Article 11(4) of the 2023 EU Single Permit Directive, which states that a period of unemployment not less than 3 months or 6 months in case the holder has held a work-based permit for more than 2 years shall not be a reason for permit withdrawal - i.e, something that the Government had to change anyway to be compliant with the minimum standards set by the EU.

In any event, the adaptation only makes the situation marginally better. As discussed with reference to the VATT study in Defence 3, a six month period for some categories of employee as opposed to three months reduces the likelihood of permit withdrawal after job loss from 49% to 40% - hardly a meaningful change. Its obvious that such a change was in any event needed for specialized workers, since recruitment processes are naturally longer and potentially legally challenging due to non-compete agreements. Finally, the scope of the adaptation is in fact very limited - it applies only to persons holding a residence permit for a Specialist, ICT transferees and startup founders. It does not apply to persons holding a residence permit for employees or business operators who have graduated with a degree in Finland, nor does it apply to any other kind of entrepeneur holding an entrepeneur’s residence permit. Only time spent in Finland with a work-based residence permit counts towards the two year period providing for a longer protection against withdrawal. It does not count employment done under the framework of any other residence permit, even if that residence permit had a right to work. People change residence permits and can get caught up by these rules.

Defence 6: The Government has engaged in significant consultation with organizations and immigrants on the matter, above and beyond what they might usually do

• The Government has certainly made positive steps towards consulting immigrants on matters which affect them.
• Unfortunately such consultation is meaningless when the proposed changes are politically “locked in”.

The Government, to its credit, very much tried to do more consultation with the external community and particularly with work-based immigrants, compared to for example, the first stage of the reform of the Citizenship Act where the consultation was deliberately made very limited. Statements were collected on Lausuntopalvelu for a period of three months, and statements could be made in English as well as Finnish and Swedish. An English-language public hearing was also conducted over a Teams call, which had around 200 participants.

While it was nice to be directly connect with Government officials on the matter, the consulation was, overall, quite meaningless, except to the extent that it clarified a few important matters around how these new rules would be administered in practice. Soon after the call and after the opinion feedback round was closed, the ministry announcd that they were going to go ahead with the new rules as they were initially drafted with no changes. This was despite the fact that out of the 132 statements given, only two answered that the time limits given in the proposal were sufficient to find new work. The reason for this is that prior to the consultation, the time limits were effectively already locked in by political agreement between the Finns Party and the rest of the government, where the leaders of that party had stated that renegotiating one part of the immigration policy package puts the rest of it on the table. This was effectively also admitted during the hearing as well, where Ministry officials stated that there was politically very little room to move.

Compare that to the 2022 “Immigration Dialogues”, where there was public consultation before proposed reform to the Aliens Act. That kind of consultation is much more meaningful, because its significantly easier to influence the framework around how immigration goals are achieved before that framework is actually written and agreed to by the government parties.

Conclusion: Yes, its not all doom and gloom, but there are still valid things to complain about

To be clear, on the face of it, these defences appear to be correct. Direct impacts of the change are small, similar rules are in use in other countries and the rules have to some extent been improved. But those defences ignore the nuance of the matter. Direct effects may be small but the indirect effects are still large and significant. Similar rules do exist in other countries, but they’re considered problematic there as well. And while there are improvements, those improvements don’t go nearly far enough to fix the overall situation.

Its no wonder that there’s still significant community opposition to such a change.