Estonia's business associations hail government's planned exemption for foreign workers

TALLINN - The Estonian Employers' Confederation and the Estonian Chamber of Commerce and Industry welcome the government's plan to create an exemption for recruiting skilled employees from abroad in sectors facing labor shortages.

The measure would help bring new skills to Estonia, increase the competitiveness of the economy, create additional jobs, and boost tax revenues, the organizations say.

"The wealth of society is created in business, but the shortage of workers with the necessary skills has hindered the development of businesses and will become an increasingly acute problem as the economy recovers. Following the example of other developed economies, bringing in skilled foreign workers will help strengthen companies' competitiveness, create new jobs, and also increase the state's tax revenue," Ain Käpp, member of the board of the Estonian Employers' Confederation and head of its labor market working group, said in a press release.

"The knowledge and skills of employees from abroad will complement, not replace, those of local workers," he said.

According to the planned amendments to the Aliens Act, companies would be able to recruit, outside the immigration quota, up to 1,300 additional skilled workers from third countries -- and up to 2,600 in conditions of economic growth.

With these changes, labor migration will remain strictly controlled, as the exception can only be used by sectors with labor shortages, which are determined based on data from the OSKA program of the Estonian Qualifications Authority. In addition to the state, labor market stakeholders, employers, and trade unions participate in OSKA's work. Furthermore, there is a requirement to pay skilled workers at least 0.8 times the Estonian average salary.

Similar exceptions for recruiting employees already exist in Estonia and have been used by, for example, startup founders, ICT workers, top specialists, major investors, and employees of startup and growth companies.

"Even in light of the planned and very welcome changes, Estonia's labor migration policy remains one of the most restrictive in Europe. Therefore, there's no reason to believe that cheap or unskilled labor will start arriving here in masses. The restrictions will essentially remain the same, but higher-quality data will allow for justified relaxations exactly where they are truly needed," said Mait Palts, director general of the Estonian Chamber of Commerce and Industry.

He added that by simultaneously modernizing the education system and expanding retraining opportunities, it will be possible to ensure that companies prioritize hiring local labor, while also supporting the sustainability of sectors struggling with labor shortages.

According to labor market analysis by OSKA, the demand for foreign labor in Estonia is expected to grow over the next decade. Each year, there is a shortfall of approximately 1,400 top-level specialists and 700 skilled workers, a need that cannot be met by graduates of Estonia's current education system.