Sheltered workshop

What it means

A sheltered workshop or sheltered workplace is a workplace where at least half the employees are people with disabilities, most often recipients of a disability pension, and which has been granted that status by the labour office. Working conditions are adapted to the health of these people.

The status brings two benefits. A sheltered workshop can receive allowances from the labour office, for example to create a job or cover operating and payroll costs. And companies that buy its goods or services can use those purchases to meet their statutory obligation to employ people with disabilities.

A sheltered workshop can be a separate company, a part of a larger one, or a self-employed person with a disability working alone. The status is granted for a specific workplace, and the labour office can check the conditions on an ongoing basis.

How it works in practice

An employer with at least 20 employees that does not employ enough people with disabilities to meet the disability employment quota must pay a levy for the shortfall. The alternative is substitute fulfilment: an order placed with a sheltered workshop in the amount set by law, which counts instead of the levy.

For substitute fulfilment we check that the supplier holds a valid status and that the invoice meets the legal requirements. The sheltered workshop must record the order in the labour office system, otherwise the fulfilment may not be recognised and the company finds out only at the annual settlement that it must pay the levy anyway.

A company considering setting up a sheltered workshop itself should assess whether it can maintain the conditions long term. Labour office allowances are tied to keeping the jobs for a set period and must be repaid if this is breached. In the accounts the allowances are shown as grants according to their purpose.

What to watch out for

The most common mistake with substitute fulfilment is an order that exists only on paper, such as invoices for services never actually provided or goods resold through a sheltered workshop purely for the credit. The labour office and the tax authorities check such deals and do not recognise them.

When setting up a workshop, companies sometimes count on the allowances and underestimate the cost of adapting workplaces, higher sickness rates or the need for assistance. The budget should work even if the allowances arrive late or smaller than expected.