The Riigikogu also passed amendments to the Aliens Act which will transpose EU regulations into domestic law and widen the scope of benefits available to third-country (non-EU/EEA) nationals on residence permit, as well as tightening up labor laws.
The framers of the bill say the amendments also help to bar the exploitation of cheap labor, and will bring tens of millions in tax revenues into state coffers.
Critics say it will not solve the issues it claims to.
Forty-five Riigikogu MPs voted in favor of the bill to relax requirements to bring in foreign workers. Most of those who voted in favor were coalition MPs. 31 voted against, at the 101-seat chamber.
The bill’s explanatory memorandum states the amendments aim to alleviate a shortfall of skilled and qualified labor, which in turn serves to curb the competitiveness of Estonian companies, and so slows economic growth.
OSKA: Labor shortage over 2,000 per year
Forecasts by the Estonian Qualifications Authority (OSKA) find Estonia faces an annual shortage of about 1,400 “top specialists,” often referring to IT workers, as well as a further shortage of 700 skilled workers, none of which the domestic education system is capable of providing. A key change replaces the current short-term employment exemption with a sector-based exemption for fields experiencing labor shortages. In these sectors, fixed-term residence permits for work will be granted under more favorable conditions. Once the law enters into effect, quotas will not apply to these sectors, and no separate permit from the Estonian Unemployment Insurance Fund (Töötukassa) will be required.
The salary criterion will be set at 80 percent of Estonia’s average gross monthly wage, better reflecting actual pay levels for skilled workers and barring the import of cheap labor.
The amendments are estimated to generate additional tax revenues of approximately €14–€27 million annually between 2026 and 2029. Cumulative annual tax revenues could reach €37–€65 million, if most foreign workers remain in Estonia long term.
While the requirements have changed, the annual migration quota for skilled labor from third countries remains in place, and at the same level as before.
While in the past this quota had been filled early on in the year, in recent years it had not come close to being met.
Eesti 200 MP: Not opening immigration floodgates
Eesti 200 MP Ando Kiviberg, who chairs the constitutional committee at the Riigikogu, rejected any claims that the doors had been opened for anyone to migrate into Estonia.
We must remember that we are still talking about a quota — 0.1 percent of Estonia’s permanent population, which currently means about 1,300 people per year — and the list of sectors is very clearly defined and limited. It is not the case that anyone can come at any time in any number. I believe we have been cautious and balanced, while giving our companies the opportunity to bring in additional workforce,” Kiviberg said.
Ain Käpp, head of the Employers’ Confederation (Tööandjate keskliit) noted the law change aims to plug gaps in skilled or niche employment, including in manufacturing and logistics.
“There is often a lack of specific skills that may not exist in Estonia. These are exactly the people we need. This is certainly not mass migration or an invitation to come and live here with open borders. These are fixed-term employment contracts in necessary sectors,” Käpp said.
Migration cap variable depending on economic growth
The list of labor-shortage sectors is to be compiled based on clear criteria, including OSKA forecasts, export share, and average wages, for up to a five-year period.
A yearly cap will apply to residence permits issued for work in these sectors; this cap will be adjusted to the economic situation, in the terms of the bill.
During periods of economic growth, the cap would be 0.2 percent of the permanent population (around 2,600 at current figures), and 0.1 percent, ie. half that, when economic growth is not being experienced.
Economic growth here is to be assessed based on the Ministry of Finance’s real GDP growth forecast for the current year.
Union chair: We should have been involved more
These amendments are not without their critics from outside the Riigikogu, however. Kaia Vask, head of the Estonian Trade Union Confederation (Ametiühingute keskliit), said that the shortage sectors are not clearly defined, nor are they very agile.
“The definition of the sectors where labor can be brought in under an increased quota is quite unclear. This will be decided by the minister, while a five-year period is quite long. We wanted to see social partners — employers and trade unions — involved in the process,” Vask said.
Vask said the unions ought to have been involved more in deciding which sectors need workers from third countries.
Meanwhile, political opposition included that from Isamaa MP Helir-Valdor Seeder, who doubted the change will meet its stated aims, and said it would in reality lead to a tripling of the immigration quota, as well as the exploitation of cheaper labor since the salary threshold is set nationally, rather than based on higher wages paid in the Tallinn area.
“In a situation where the immigration quota has not been filled in recent years, it is now being tripled, and the salary threshold is lowered to 0.8. We know that most foreign labor is brought to Tallinn and Harju County, where the average wage is higher — meaning this is around 0.7 of the average, which is certainly not the pay level of highly qualified specialists or managers. This law is not needed. It will not contribute to Estonia’s economic development,” Seeder said.
Several coalition MPs: Meelis Kiili, Eerik-Niiles Kross, Marko Mihkelson and Timo Suslov from Reform, and Peeter Tali and Toomas Uibo from Eesti 200, abstained on the vote, as did the Social Democratic Party’s (SDE) Riigikogu faction.
Separate bill amends Aliens Act to align with EU law
The Riigikogu also adopted amendments to the Aliens Act which would transpose the EU’s single permit directive, which regulates residence and employment rights for third-country nationals and ensures equal treatment of foreign workers.
This bill received 41 votes in favor, again mostly from the Reform-Eesti 200 coalition, with 25 votes against.
The law change will mean in the future, holders of fixed-term residence permits for employment, ie. temporary residence permits (TRP), will be able to change employers during the validity of their permit but without having to apply for a new permit.
The new employer registering the change with the Police and Border Guard Board (PPA) will be sufficient here; the PPA will make a decision within 30 days.
Standard employment conditions — such as salary criteria and approval from the Unemployment Insurance Fund — will still apply, to avoid abuse of the system.
The bill’s explanatory memorandum states the change will significantly reduce administrative burden and speed up job changes.
Under the new rules, foreign workers will be permitted to remain registered as unemployed for between three and six months, depending on the duration of their residence permit. Up to now the period had been 90 days.
If a permit is valid for less than two years, the period is three months, while if valid for over two years, the six-month unemployment period applies.
In some exceptional cases, unemployment may last up to nine months.
Scope for being permissibly unemployed widened
The grounds for permitted unemployment will also be widened, to include other reasons for termination of employment, including at the employee’s own initiative. If an unemployment period lasts longer than three months, the foreign national in question must be able to prove they have sufficient financial means to remain living in Estonia.
Those employed in Estonia on long-term visas will under the amendments also gain access to several social security benefits, including parental benefits, work ability benefits, and pensions, provided they meet general eligibility conditions.
These rights apply only to those actually working in Estonia with the appropriate visa. Family benefits will not extend to foreign workers.
The number of employment violations related to employing foreign nationals has reportedly been on the rise in recent years.
While 380 violations were recorded in 2021 — with only one involving a legal entity, ie. a company — in 2024 the figure was 524, including 38 cases involving legal entities.
However, the current fine limits date back to 2010 and are no longer effective. For some violations, the maximum fine for a legal entity is €3,200, which is not a real deterrent to many firms, proponents of the amendments say. Fines to legal entities will therefore be hiked, to a maximum of €100,000 for serious violations.
As with the previous vote, members of the Social Democratic Party (SDE) abstained, as did the same coalition MPs noted above.
These amendments are scheduled to enter into force on May 22, 2026, the deadline for transposing the EU directive.
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