The grey economy
Right to work in Finland
The monitoring concerns foreign companies that post workers to Finland from abroad and the right to work and terms of employment of foreign employees working for Finnish companies.
The employer is required to ensure that foreign employees have a residence permit entitling them to work or other grounds for employment in Finland under the Aliens Act. If the employer neglects the obligation to check and allows an employee to work without a permit, whether knowingly or unknowingly, the work is undeclared work. The employer is guilty of unauthorised use of foreign labour or a violation by an employer of the Aliens Act.
The occupational safety and health authorities are required to report to the police without discretion if there is probable cause to suspect that an employer is guilty of unauthorised use of foreign labour or a violation of the Aliens Act.
Financial sanction and employers’ joint and several liability
An employer who has hired a third-country national who is staying illegally in the country may be liable to pay a financial sanction imposed by the Finnish Immigration Service amounting to EUR 1,000 to EUR 30,000. The term ‘third-country national’ refers to citizens of countries other than the Nordic countries, EU Member States, Liechtenstein or Switzerland.
An employer on whom a financial sanction is imposed may be liable to compensate for the costs of returning employees, particularly if the employer has through his own actions influenced the employees’ entry or residence. The employer may also be liable for covering the costs of paying wages abroad.
Joint and several liability of the employer, contractor and principal contractor
Where the employer of an employee staying in the country illegally is a subcontractor, the subcontractor’s direct contractor and the employer shall be jointly and severally liable to pay the employee’s pay receivables, increments, overtime, Sunday compensation, annual holiday pay and holiday compensation.
The direct contractor shall also be jointly and severally liable to pay the financial sanction if imposed on the employee’s employer, the costs of payment of wages abroad, and the costs of return if the direct contractor has through their own actions influenced the employee's entry or residence.
The principal contractor or other subcontractor acting as contractor shall be jointly and severally liable with the employee's employer to pay the financial sanction and the costs of paying receivables abroad if they were aware that the employee was staying in the country illegally, and to pay the costs of return if they through their own actions influenced the employee's entry or residence.
Contractors who are partners of the employer are entitled to demand compensation from the employer for any fees, costs and compensation that they had to pay.
Forged residence permit cancels financial sanction
The employer is exempt from liability if the residence permit presented by the employee was forged and the employer was not aware of this. The same applies to the employer’s partners.
A contractor is also exempt from liability if he has obtained the reports and certificates required under the contractor's obligation to check from a subcontractor employer and established that the subcontractor’s employees have a worker’s residence permit or other document granting them right of residence.
Information about confirming the right to work: Foreign employee.