Miscalculated wage payments

Miscalculated wage payments - Alasivu

It is the employer’s responsibility to make sure that employees’ wages are calculated correctly and paid on the agreed day. It is down to each employee to provide the employer with all the information needed to calculate their pay, such as records of the hours that they have worked.

Employees are entitled to late-payment interest if their wages are not paid on time.

It is also the employee’s responsibility to tell their employer if they think that their wages have been miscalculated. This applies regardless of whether the employee has been paid too little or too much. The employer is entitled to money back if they have accidentally paid an employee too much.

Employers and employees should ideally be able to settle any disagreements concerning wage payments between themselves. If this is not possible, the dispute can only be finally settled in court. Instructions and advice on wage payments are available from the Regional State Administrative Agencies’ Divisions of Occupational Safety and Health, but they cannot provide legal representation or file lawsuits.

Late payments

Employees are entitled to late-payment interest pursuant to the Finnish Interest Act if their wages are not paid on the agreed day either during their employment or when their contract ends.

If any part of an employee’s wage is paid late after their contract has ended, they must be paid not only late-payment interest but also a full wage for each day, up to six calendar days, by which the payment is late. The number of days for which a full wage must be paid is calculated from the day following the date on which the wage should have been paid, regardless of whether the employee would have worked the days in question had their contract not ended.

What constitutes an employee’s “full wage” depends on the circumstances. If the employee has been exclusively on time-based pay, the amount payable for the days by which the payment is late is usually based on their time-based pay.

Exceptions

No extra is payable for the days by which a payment is late if

  • there is disagreement over the amount or
  • the discrepancy is due to a miscalculation.

However, the employee retains their right to be compensated for late payment as long as they bring the discrepancy to their employer’s attention within one month of the end of their contract.

The employer has three days from the employee’s notice to correct the discrepancy. If the payment still has not been made after three days, the employee is entitled to a full wage for the days by which the payment is late.

Time limits for claiming unpaid wages

There is a time limit after which an employer no longer has an obligation to pay unclaimed wages. There is also a time limit for bringing a lawsuit for unpaid wages.

Time limit for claiming unpaid wages during employment

Employees have up to five years to claim any wages that are owed to them. The time limit applies to basic wages and various extras regardless of whether they are based on an employment contract, a collective agreement or the minimum wage provisions of the Employment Contracts Act.

The time limit is calculated from the date on which the wages should have been paid. The clock stops if the employee files a claim or brings the debt to their employer’s attention through other official channels, and a new five-year time limit is set.

The time limit for claiming unpaid hourly remunerations that are based on the Working Hours Act, such as overtime pay, is two years. Employees are entitled to overtime remuneration if they work overtime. The time limit is calculated from the end of the calendar year during which the employee became entitled to the remuneration or time off in lieu. The employee loses their right to the overtime remuneration if they do not claim the amount within two years of the end of the calendar year during which the overtime was accrued.

Time limit for claiming unpaid wages after an employment contract has ended

The time limit for claiming unpaid wages that are based on either the Employment Contracts Act or the Working Hours Act is two years from the end of the employee’s contract, except where the right to claim has already expired before the end of the employment relationship.

Unpaid wages that are based on a collective agreement can be claimed up to five years later if

  • the provisions of the collective agreement on which the claim is based are manifestly ambiguous
  • disagreement has arisen after the end of the employee’s contract over the application of the provisions.