Payment of wages

Minimum wage

Minimum wages are based on collective agreements. An employer as a member of the employer organisation which has concluded a collective agreement applicable in the sector follows that agreement. An employer as a non-member of the employer organisation which has concluded a collective agreement is required to follow the generally binding collective agreement applicable in the sector. The employer must not contract on employee benefits that are worse than those laid down by the generally binding collective agreement. Further information on generally binding collective agreements is available from the relevant employer or employee organisation and the OSH Inspectorates.

Normal and reasonable wage, recommendation

If an employer does not belong to the employer organisation which has concluded a collective agreement and there is no generally binding collective agreement with employer obligations for the sector, the employer must pay for the work wages considered as normal and reasonable.

If there is an applicable collective agreement other than a generally binding collective agreement in the sector, the wages laid down in that agreement may be considered as normal and reasonable. If there are no collective agreements applicable in the sector, a normal and reasonable wage can be based on pay recommendations given by organisations involved in the sector. If these do not exist either, it is recommended that the pay for a full-time job should be at least the same as the minimum pay required as grounds for earnings-related unemployment allowance. Thus the pay per month should be at least 40 times the basic daily allowance. This makes a minimum of 980,40 euros per month, 45,60 euros per day or 5,70 euros per hour.

Sick pay

According to the law, an employee who is unable to work due to an illness or an accident is entitled to paid sick leave. Wages are paid for the day when the illness started (if it had been a working day for the employee) and for the working days included in the following 9 weekdays. If the employment relationship at the start of the disability has lasted for at least one month, the employee will be paid full wages for the said period. If the employment relationship has lasted for a period shorter than one month, half of the wages will be paid for the same period.

In most sectors, wages are paid during sick leave on the basis of the applicable collective agreement not by the law. The provisions on sick pay in collective agreements may, in some respects, be different from the minimum benefits provided by the law or even be better. Usually the sick pay period provided by collective agreements is longer than the statutory period. The grounds for sick pay must be checked from the applicable collective agreement.

Pay calculation and request for correction of payment

The employer must, in connection with payment of wages, give the employee a calculation which indicates the amount of pay and the grounds of its determination. The pay calculation is a necessary aid to correction in the event of miscalculation or other errors. If the employer does not give a pay calculation, the employee must immediately remind the employer of this. If the employee, in their own estimation, has not received all wages due, he or she must ask the employer to correct the payment.

Pay calculation (pdf-file).

Failure to give a pay calculation on request is a punishable act (Employment Contracts Act Chapter 13, section 11(2).

Pay during waiting period

The wages must be paid on the last day of the pay period, unless otherwise agreed. The pay period concludes at the termination of employment, when also wages payable due to an employment relationship must be paid. If the payment of wages is late, the employee is entitled, in addition to penal interest in accordance with the Interest Act, to full wages for the waiting period, for six calendar days at the maximum.

If wages payable due to an employment relationship are not clear and uncontested, or if the delay is due to miscalculation or an error comparable to miscalculation, the employee is entitled to be paid for the waiting period only if he or she has reminded the employer of the delay within one month from the termination of employment and the employer has not paid the wages due within three weekdays from the reminder.

Deduction of counterclaim from wages

If the employer has a clear and uncontested counterclaim against an employee, for example the employee owes the employer a certain sum of money, the employer may deduct the sum from the employee’s wages. One third of the net wages at any given time may be deducted.

The employer must not make any deductions if the counterclaim is not clear and uncontested. This is the case if the employer demands compensation for damage from an employee. If an employee in work has caused damage to the employer, the amount payable by the employee will be evaluated in a court on the basis of the provisions on liability, unless the parties have agreed on the compensation.

Filing a suit for a wage claim

If the employer does not pay wages due, the employee, as a member of a trade union, shall contact the union. A non-organised employee may sue for a wage claim in a general court by bringing action against the employer. The employee commences the action, for example by contacting a solicitor or a legal aid office. The OSH Inspectorate does not bring the employee’s matter to court.

If an employee suspects that the employer is unable to pay, the employee must immediately contact the employment office in the place of residence in order to apply for pay security. The application must be submitted within three months from the due date. The OSH Inspectorates do not deal with pay security issues.

Guidance and advice from the OSH Inspectorate

The OSH Inspectorates provide information on which provisions form the basis of wages, how the provisions are interpreted in individual cases and how wages are to be calculated and paid. When necessary, employers are provided with oral instructions to correct evident violation of provisions. The OSH Inspectorate does not calculate wages due or act for the employee if the wages are unclear and contested in respect of grounds and amount.