Pay of a posted worker in Finland

Pay of a posted worker - Sivun kieliversiot

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Pay in Finland - Ingressi

In Finland, the grounds for determining salaries such as minimum wages and components of a salary, the method of calculating the salary to be paid and the grounds for placing an employee in different salary grades, are usually determined according to the collective agreement.

Pay in Finland - Yleistä

NOTE! The guidelines based on the application of the old law can be found here.

Posted workers must be paid the wage specified in the collective agreement.

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.

Salary of posted worker

A coin and cashIn Finland, there is a universally binding collective agreement applicable to most branches. Therefore, when determining the wages, one must always determine which collective agreement is applied in the sector and provides the basis for the hourly or monthly wage or the task based payment component.

A posted worker must be paid at least the compulsory pay instalments referred to in the generally applicable collective agreement referred to in the Employment Contracts Act.

However, if the posting undertaking is a member of an employer organisation or has joined a collective agreement that is generally applicable in the sector, the salary paid to the posted worker must be determined on the basis of this collective agreement.

If the sector in question has no generally applicable collective agreement or any other agreement or common practice in place, employees must be paid normal, reasonable wages. 

The salary agreed between the employer and the employee shall not be substantially below the level of the salary considered normal and reasonable.  The above provision also applies to situations where wages have been agreed in the country of origin without knowledge of the level of wages in Finland.

Salary of posted agency worker

The employment conditions of temporary agency workers posted to Finland are determined in the same way as for Finnish temporary agency workers.

A posted agency worker must be paid at least the compensation determined in accordance with the Employment Contracts Act. This means that, as a rule, the collective agreement followed by the temporary agency is applied. Currently, the Collective Agreement for the Personnel Services Sector is the generally applicable collective agreement in the field of personnel services, and it applied to people working in office, finance administration and ICT positions. In practice, the minimum terms and conditions for hiring labour are determined by the collective agreement applied by the company using these services (the recipient of the services), which is determined by the sector of the user company.

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).

Compensation relating to working hours and 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

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