Anyone with a considerable influence over the company’s decisions is not, in principle, entitled to unemployment benefits. Here is the process explained.
Although they contribute to unemployment insurance (ALV) on the same basis as any employee, a person occupying a position comparable to that of an employer may not receive unemployment insurance benefits. This applies while that person continues to exercise a significant influence over the company’s decision-making processes. The reason: unemployment insurance is a type of insurance aimed at workers who are unable to either determine or influence the loss of their job.
This means those persons who define the decisions made by the employer (a SARL or SA/limited company) or persons who may have considerable influence over those decisions, such as a shareholder, member of a management body or holder of a financial interest in the company.
Verification procedure of the unemployment offices
It is the responsibility of the unemployment offices to assess whether a contributor occupies a particular position within the company or not. Members of the board of directors of a limited company (SA) and the managers and shareholders of an SARL are, in all cases, affected by this regulation.
As for the other members of an executive body, the office must determine which actual decision-making power they hold, depending on the structure of the company. This check is sometimes difficult, because the line between various decision-making levels is not always officially drawn, particularly in SMEs. For example, a CEO responsible for administrative and financial affairs with individual authority to sign, without however forming part of the board of directors, may or may not exercise considerable influence over the employer’s decisions.
In its checks, the office may rely on the following documents:
- Company’s organizational chart
- Excerpt from the trade register
- Articles of association and minutes
- Employment contracts
- Taxation (allowing for a verification of financial participation)
When the extent of the financial participation confers on a salaried employee decisive decision-making powers, his or her position is comparable to that of an employer. It should be noted that mere possession of employee shares does not suffice to justify exclusion from entitlement to benefits.
Spouse and family members
A person working in a company where his or her spouse occupies a position comparable to that of an employer is not entitled to unemployment benefits. If it can be proven that another family member, for example, a brother or a son, exercises, on account of their position, considerable influence over the employer’s decisions, they shall not be entitled to benefits either.
Abandonment of the position comparable to that of an employer
A person occupying a position comparable to that of an employer is however, entitled to unemployment benefits if he or she leaves the company or abandons this position permanently.
The following facts entail the permanent departure from or abandonment of the position comparable to that of an employer:
- Closure of the company
- Bankruptcy of the company
- Sale of the company’
- Leave with loss of position comparable to that of an employer
For more detailed information about entitlement to unemployment insurance for individuals occupying a position comparable to that of an employer, the implementing directives for the Federal Law on Compulsory Unemployment Insurance and Allowances in Case of Insolvency (LACI) can be found below.