Finland
The Republic of Finland, popularly known as the Land of a Thousand Lakes (or, more precisely, the Land of 180,000 Lakes), is a parliamentary republic renowned for its robust industrialized economy, record-setting levels of human development, and strong democracy.
Finnish workers benefit from high levels of social protection, a favourable work-life balance, and a high standard of living in general. Hiring a worker who enjoys such a secure and beneficial workplace entails hiring a productive and content worker who produces excellent work.
Furthermore, employees in Finland are accustomed to flexible working hours – in fact, agile working hours have been a part of the Finnish working culture for several decades – so scheduling a team call with several remote employees in different time zones should be no problem for your new hire from Finland.
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Why work in
Finland
?
Benefit from the country's renowned education system, progressive policies, advanced digital infrastructure, and emphasis on work-life balance.
The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Finland.
Source: The Global Talent Competitiveness Index 2022
Through the Gloroots' Recrew platform, you can discover amazing talent in Finland and grow your team effectively.
Grow your team in
Finland
Employers operating in Finland must establish a local legal entity and leverage local resources to ensure compliance with employment regulations, payroll management, tax obligations, and benefits administration. The intricacies of Finnish employment laws require employers to navigate a complex landscape to ensure compliance. By partnering with local experts, businesses can streamline their operations and effectively manage their workforce, ensuring adherence to Finnish employment regulations and optimizing their business operations. With Gloroots' global Employer of Record (EoR) service, you can rely on our expertise to handle payroll, tax, benefits, and compliance, allowing you to focus on your employees and drive company growth.
Risks of misclassification
The issue of "employee misclassification" also exists in Finland, referring to the incorrect classification of workers by employers. It occurs when an employer mislabels a worker as an independent contractor, depriving them of the employment rights and benefits entitled to regular employees, even if the worker performs duties similar to those of a permanent employee.
Engaging a PEO/EOR in Finland can help properly distinguish worker classifications and prepare accurate employment agreements. These experts ensure compliance with labor laws, precise classification of employees, accurate payroll processing, and comprehensive benefits administration. By entrusting employment-related responsibilities to knowledgeable professionals, businesses can focus on their core operations while ensuring compliance with Finnish labor regulations.
Employing in
Finland
Engaging a PEO/EOR in Finland can help properly distinguish worker classifications and prepare accurate employment agreements. These experts ensure compliance with labor laws, precise classification of employees, accurate payroll processing, and comprehensive benefits administration. By entrusting employment-related responsibilities to knowledgeable professionals, businesses can focus on their core operations while ensuring compliance with Finnish labor regulations.
Legal aspects of employing in
Finland
Working hours
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Payroll
An important aspect of Finland’s labor laws is the impact of collective bargaining agreements. Like many Nordic countries, Finland’s labor landscape involves a seamless and systematic exchange of employee and employment needs.
Thus Finland’s employment laws include mandatory laws, collective bargaining agreements, employment contracts and other norms.
Partner with a Gloroots’ Finland EOR to tackle these challenges and compliantly hire in the nordic nation
Employment Contract
While it is legally permissible to establish oral or electronic employment contracts in Finland, it is considered best practice to have a written agreement in place.
This employment contract should include essential details, such as:
- Identification of both parties
- Commencement date (and employment duration for temporary contracts)
- Workplace
- Job description, duties, and responsibilities
- Basic salary, compensation, and benefits
- Working hours
- Total number of holidays
- Notice periods for employment termination
- Probation period
- Reference to collective agreements
- Terms applicable to work conducted abroad
Even in the absence of a written contract, it is mandatory for the employer to provide the employee with a written document containing all the aforementioned employment agreement details. While most employment contracts in Finland are of a permanent nature, fixed-term contracts are also commonly utilized.
Working Hours
The weekly working hours in Finland can range from 37.5 to 40 hours, depending on the specific job and any Collective Bargaining Agreements (CBAs) in place.
Overtime
Any hours worked beyond the standard workweek are considered overtime, and the rules for it are determined by the employment contract or collective agreements. Both the employer and employee must agree before any overtime work starts.
Generally, you can't work more than 138 overtime hours in four months or 250 hours in a year.
For the first two hours of overtime, you get paid 150% of your regular salary, and for any additional hours, it's 200%. If you have to work overtime on a weekend or a day off, you get paid 200% of your regular salary for those hours.
Minimum Wage
Finland doesn't have a fixed minimum wage set by law, but many employees are subject to collective agreements that establish minimum wage levels.
Maternity Leave and Paternity Leave
In Finland, family leave encompasses maternity leave, paternity leave, parental leave, and childcare leave. Normally, family leave is unpaid, but this can be outlined in the employment contract or collective agreement.
Certain aspects of family leave are eligible for allowances from Kela, such as parental and home care allowances.
Pregnant employees have a right to 105 days of maternity leave. If it's safe for both the mother and the baby, working is allowed during maternity leave. However, two weeks before the expected due date and two weeks after childbirth, the mother cannot work.
Annual leave
In Finland, annual leave runs from April 1 to March 31, with vacations taken typically between May 2 and September 30. Employees earn two vacation days per month initially, increasing to four weeks per year after one year of continuous employment. After 15 years, it becomes three days per month.
Vacation days are counted based on working days, including Saturdays. Employees must take at least two consecutive weeks off, but flexibility exists for timing and shorter hours.
Holiday pay varies based on employment terms, and it must be provided before the vacation starts, except for vacations lasting less than six days, where it can align with the regular payday.
Sick Leave
Employers have to provide sick leave, but how long you get depends on your work agreement. For most agreements, it's 4 weeks if you've worked for less than 3 years and can go up to 5 years. If someone's sick for over ten days and can get it, their pay will drop by 50% with a sickness payment allowance from KELA.
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Separation
Termination Process
Starting from January 1, 2023, the process of ending employment depends on the employment contract, collective agreement, contract type, and the reason for ending it. Additionally, non-compete compensation clauses will require employers to provide compensation to employees who resign or are dismissed for cause, covering the period when they cannot compete after leaving the job.
Notice Period
The length of the notice period is determined by the Employment Contracts Act. According to this act, the employer and the employee can agree on notice periods, but they can't be longer than six months. Collective agreements may also have their own notice period rules.
If a collective agreement sets different notice periods than the statutory ones, both the employer and the employee must follow the collective agreement.
The specific notice duration depends on how long someone has worked and the reason for ending the employment. If the employer ends the contract:
- Less than one year of work – 14 days' notice
- One to four years of work – one month's notice
- Four to eight years of work – two months' notice
- Eight to 12 years of work – four months' notice
- Over 12 years of work – six months' notice
If the employee ends the contract:
- Up to 5 years of work – 14 days' notice
- More than five years of work – 1-month notice
Severance Pay
Finland doesn't have a mandatory severance payment requirement, but severance terms can be outlined in the employment agreement.
Probation Periods
In Finland, the trial period cannot go beyond six months.
