Pay of a posted worker in Finland
NOTE! The guidelines based on the application of the old law can be found here.
The terms and conditions of employment of the posted worker are determined according to the legislation of both the country of origin and Finland. The terms and conditions of employment in the country of origin may differ from those in Finland. The purpose of the Act is to ensure that posted workers are treated equally compared to employees of companies operating in Finland. Provisions of the Finnish labour legislation and the universally binding collective agreement granting the worker more favourable work life conditions than the legislation otherwise applicable to the employment contract of the worker shall apply to the work of a posted worker.
Wages of posted workers
Posted workers must be paid at least the compensation determined on the basis of a universally binding collective agreement as referred to in chapter 2 section 7 of the Employment Contracts Act. If there is no universally binding collective agreement for the sector and no other agreement or practice in force, the employee must be paid a usual and reasonable wage. The wage agreed by the employer and the employee must not be substantially less than the wage level that may be considered usual and reasonable. The above provision applies also to situations where wages have been agreed in the country of origin without knowledge of the level of wages in Finland.
Wages of posted temporary agency workers
The employment conditions of temporary agency workers posted to Finland are determined in the same way as for Finnish temporary agency workers.
Posted temporary agency workers must be paid at least the compensation determined in accordance with Chapter 2 Section 9 of the Employment Contracts Act. In practice, primarily the collective agreement of the temporary work agency will be applied. If there is no such collective agreement, the minimum terms are determined in accordance with the collective agreement applied by the contracting company (the service recipient).
Should no collective agreement be applied to the employment relationship of the posted temporary agency worker, the conditions concerning wages, working hours and the annual holiday must be in accordance with agreements or practices which are binding for the contracting company or generally applied by it.
If there are not any agreements or practices, which are binding for the contracting company or generally applied by it, the employee must be paid a usual and reasonable wage. The wage agreed by the employer and the employee must not be substantially less than a wage that may be considered usual and reasonable. The above provision applies to situations where wages have been agreed in the country of origin without knowledge of the level of wages in Finland.
The worker may agree with the employer, i.e. the temporary work agency, on those working conditions, which are not determined in the collective agreements. The employment conditions of the temporary agency worker may therefore differ partly from those of the workers of the contracting company (for example lunch or phone benefits).
Grounds for the determination of the wages
In Finland the grounds for the determination of the wages, i.e. the minimum rates of pay and its different components (constituent elements), the calculation method for the payable wages as well as the principles for placing workers in different payment categories are normally determined in accordance with the collective agreement.
In Finland, there is a universally binding collective agreement applicable to most branches. Therefore, when determining the wages, one must first determine
- which collective agreement is applied in the sector and provides the basis for
- the hourly or monthly wage and
- the task based payment component and
- a possible personal payment component.
The collective agreement may contain provisions on the placing in payment categories, but in some of the collective agreements, the placing in payment categories is based on a competence classification or so called rates. The collective agreements normally include more information on the placing in payment categories.
Compensations related to the working hours and the annual holiday
In Finland, the minimum wages of a posted worker also include compensations related to the provisions on working hours and annual holidays. These may be based on the law or/and the collective agreement. It is possible to agree differently on certain conditions in collective agreements than what is laid down in the law on the same conditions. Therefore, it is important to consider both the provisions in the law as well as in the collective agreement.
The collective agreement may for example hold provisions on the compensations or time off for shortening of working hours or compensations for work on Church Holidays. There may also be agreements on the overtime compensations.
Collective agreements may also contain provision, which differ from the law, on the determination of the annual holiday compensation and a holiday bonus, which is payable in addition to the annual holiday compensation.
Based on the collective agreement the annual holiday compensation may be determined as a percentage value of the paid wages or in accordance with a coefficient determined on number of the accumulated days of annual holidays. The holiday bonus is determined as a percentage value based on the annual holiday compensation.
The employer is responsible for the payment of wages
The employer is responsible for the payment of the wages to the worker. The contractor (the service recipient) is not responsible for the payment of the wages to the worker. However, when hiring temporary agency workers the contractor must give the employer of the temporary agency workers all the information the employer needs in order to fulfil his obligations.
Under the new Act on Posting of Workers, a construction site builder or a general contractor shall, having been notified by a posted worker that a posted worker has not been paid correctly,
- immediately request information on the paid wage and if paid wage corresponds to what is prescribed in the Act, from the employer of the posted worker, e.g. the posting undertaking, and
- send the request for information and the report submitted by the posting undertaking company to the worker. At the request of the worker, the information request and the report shall also be submitted to the occupational safety and health authority.
The construction site builder and the general contractor shall keep the request and the report for two years following the end of the work.
Further information: Pay
The labour legislation forms the basis for the regulation of the employment conditions on the labour market. The trade unions and employer organizations conclude collective agreements on workers and collective agreements on civil servants. These collective agreements include more detailed provisions on the employment conditions than the applicable law. Universally binding collective agreements are also binding for unaffiliated employers, i.e. employers not belonging to an employers’ organisation. Any clause in an employment contract that violates the corresponding provision in a universally binding collective agreement is null and void.
Local agreement means for example that the employer and workers may enter into a for both parties binding agreement concerning certain terms and conditions of employment. Collective agreements may however impose restrictions on local agreements; proper procedure must therefore be ensured before concluding a local agreement.
Further information: Collective agreement
The central organisations and the most relevant employees trade unions and employer´s associations
- The Central Organisation of Finnish Trade Unions SAK
- Finnish Confederation of Professionals STTK
- Confederation of Unions for Professional and Managerial Staff in Finland AKAVA
- Confederation of Finnish Industries EK