COUNTRY

Written Agreements

In Finland, although it is not mandatory for employers to offer written contracts, they are required to provide written particulars for employees whose employment relationship is valid indefinitely or whose fixed-term relationship exceeds 1 month (unless a written agreement is already in place). Employers must also provide such a statement to employees who repetitively use fixed-term contracts of less than 1 month with similar terms.

If the terms of work change, the employer is required to provide the employee with written information no later than the end of the pay period following the change unless the change arises from an amendment in legislation or a collective agreement.

The Employment Contracts Act of Finland prohibits employees from disclosing any trade secrets or engaging in a competitive activity during their employment. Additionally, a non-competition agreement can be signed at the start or during the employment relationship that restricts an employee from joining a competitor or engaging in competing activities post-employment if there is a particularly compelling reason related to the employer's operations. The maximum restriction period is 1 year, and the compensation must be paid during the restriction period unless otherwise agreed.

Oral Agreements

The Finnish Employment Contracts Act allows employment contracts in oral, written, or electronic format. However, employers are required to provide written particulars for employees whose employment relationship is valid indefinitely or whose fixed-term relationship exceeds 1 month, (unless a written contract is already in place). Employers must also provide such a statement to employees who repetitively use fixed-term agreements of less than 1 month with similar terms.

Implied Agreements

The labor code of Finland does not offer specific provisions about implied terms in employment contracts. All terms of the contract are, however, encouraged to be put into writing.

According to the Working Time Act of Finland (the Act), which entered into force on January 1, 2020, the statutory number of hours in a workday should not exceed 8 hours a day and 40 hours a week. Unless otherwise indicated by a collective agreement, regular working hours can be extended by 2 hours, up to a total of 10 hours. Weekly working hours cannot exceed 48 hours, and working hours should not exceed an average of 40 hours over a period of 4 weeks. In period-based work, the regular hours should not exceed 120 hours during a 3-week period or 80 hours during a 2-week period. The period-based working hours can only be used in companies, shops, institutions, and jobs listed in the Act.

Telecommuting is defined as flexible, voluntary, or paid work based on agreed rules, which can also be done outside of the actual workplace. The working time can either be entirely or partially remote. Remote work arrangements are usually agreed upon in writing.

In Finland, the following holidays are observed:

• New Year - January 1
• Epiphany - January 6
• Good Friday - date subject to change annually
• Easter Monday - date subject to change annually
• May Day (Vappu) - May 1
• Ascension Day - date subject to change annually
• Midsummer Eve - date subject to change annually*
• Midsummer - date subject to change annually
• All Saints' Day - date subject to change annually
• Independence Day - December 6
• Christmas Eve - December 24*
• Christmas Day - December 25
• Boxing Day - December 26

*Although not official public holidays, many Finns do not work on Midsummer Eve and Christmas Eve. Businesses frequently close for all or part of the day, and public transit runs on special timetables. Collective agreements will often specifically stipulate working hours for these two days.

In Finland, regulations concerning annual leave may be found in the Annual Holidays Act and collective agreements. Employees are entitled to 4 weeks of summer holiday and one week of winter holiday. In short employment relationships, the annual holiday allowance is reduced accordingly.

Employees earn holiday days by working during the holiday credit year, which runs from April 1 to March 31. They are entitled to holiday pay (which may not be below the regular payment) for the duration of the holiday. If the holiday exceeds 6 days, the holiday pay must be issued before the start of the holiday. For a holiday not exceeding 6 days, it is paid on the employee’s normal payday.

Employers' obligation to pay holiday bonus is based on collective agreements, employment contracts or well-established practices. Holiday bonus is 50% of the holiday pay. There are no provisions in the Annual Holidays Act obliging employers to pay holiday bonus.

Finnish law does not limit the amount of employee sick leave. The Employment Contracts Act guarantees employees' pay up to nine days for full-time absence due to illness if the employment relationship has lasted for at least one month. When employment relationships last less than one month, employees receive 50% of their pay.

When an employer's obligation to pay sick leave ends, the employee becomes eligible to receive a sickness allowance from the sickness insurance system managed by the Social Insurance Institute (Kela). The allowance is approximately 70% of the employee's previous salary. The 2024 minimum sickness allowance is EUR 31.99 (euros).

Per the Health Insurance Act of Finland, employees can take maternity leave at 50 weekdays (at the earliest) before the estimated delivery date, and 30 weekdays before the estimated delivery date at the latest. Employees are entitled to a total of 105 weekdays of paid maternity leave. The allowance amount depends on their income. The current minimum daily rate is EUR 31.99. In addition to this, a maternity grant can be claimed in the form of either a maternity package or a tax-free cash benefit of EUR 170.

The Employment Contracts Act requires the employee to notify the employer of the need for maternity, paternity or parental leave or childcare leave at least 2 months before it starts. Employees shall be entitled to take parental leave in one or two periods, the minimum duration of which must be 12 working days.

According to the reform to family leave, employees whose expected delivery date is September 4, 2022, or later are entitled to pregnancy allowance for 40 working days, starting 30 working days before the estimated due date of the baby. After that, the mother can take parental leave up to 160 days, out of which 63 days are transferable to someone else taking care of the child.

Under Kela, the Social Insurance Institution of Finland, currently, fathers who are residents or workers employed in Finland for an extended period are entitled to a paternity leave up to 54 working days. For two children, the paternity allowance period can be 72 working days, for three children - 90 working days, and four or more children - 105 working days.

Fathers must give their employer at least two months' notice before taking paternity leave. However, if the duration of their leave is under 12 days, one month of notification is sufficient.

According to a new reform, for children born on or after September 4, 2022, the duration of parental leave will be increased to 320 days, divided equally between both parents. It can be taken in different periods until the child reaches the age of 2. Parents can work part-time and apply for partial parental allowance for that same period. The amount of paternity allowance depends on the annual income of the parent. The minimum daily rate of paternity pay is EUR 31.99 (Euros). The amount of parental allowance depends on the annual income of the parent.

Minimum Wage

Although there is no law on minimum wages in Finland, many collective agreements (which set a minimum wage) are "generally binding," which means they are adhered to in the sector covered by the agreement, irrespective of whether or not the employer is bound by that specific collective agreement. When employers pay wages, they must give the employee a statement showing the payment amount and the grounds on which the amount has been determined. The wage statement is a crucial instrument for clarifying any possible calculation errors or other mistakes that may have occurred when calculating wages.

The salary must be paid on the last day of the pay period unless agreed otherwise. If the hourly wage is calculated for a period shorter than a week, it must be paid at least twice a month; otherwise, it should be paid once a month. For performance-based work, the payment period cannot exceed 2 weeks unless the performance-based salary is included in the monthly pay. If the performance-based work extends beyond one pay period, a portion of the salary, based on the time spent on the work, must be paid for each pay period.

Overtime, Holiday & Vacation Pay

Remuneration for overtime work shall be at least equal to the pay for the agreed working time. Regular pay plus 50% for the first 2 hours worked, and regular pay plus 100% for each subsequent hour shall be payable for daily overtime. Regular pay plus 50% shall be payable for weekly overtime.

If the employee wants time off rather than payment, the duration of time off will be granted under the principles of remuneration for overtime. Employers must grant the time off within six months of the additional work or overtime unless otherwise agreed. The employee can add free time to saved leave through an agreement with the employer.

Employees working on public holidays are entitled to twice their daily wages. Employees have the right to receive their regular pay for annual leave. The leave pay must be issued before the start of the annual leave. Holiday pay for vacations not exceeding six days may be paid on the employee's normal payday.

Notice Period

According to the Employment Contracts Act of Finland, the notice for dismissal is based on the duration of the employment relationship. The employer must give the following notice periods:

• 14 days for the length of service of up to 1 year
• 1 month for the duration of service between 1 and 4 years
• 2 months for service between 4 and eight years
• 4 months when employment lasted 8 to 12 years
• 6 months for the duration of employment over 12 years

Unless otherwise agreed, the employee must give the following notice period if the employment relationship has continued uninterrupted:

• 14 days, if the employment lasted up to 5 years
• 1 month if the employment relationship has continued for more than 5 years

Collective agreements can be used to agree on notice periods. If the notice periods under the collective agreement differ from the statutory notice periods, the employer and the employee must comply with the notice periods under the collective agreement, unless the collective agreement provides for the possibility of agreeing on other notice periods.

Severance Benefits

Severance pay is not formally regulated for non-public employers in Finland. However, employers must pay out employees' remaining salary, unused holiday leave, and unpaid bonuses or commission when their employment contract is terminated. Employees with difficulty finding new employment may become eligible for a severance payment from public authorities. Employees who have been laid off (suspended with no payment, but the employment relationship is not terminated) for more than 200 calendar days are entitled to severance pay as well as holiday compensation if they are terminated. Their severance pay is calculated based on the notice period specified by their employer.

Pension

The Finnish pension scheme includes earnings-related pensions and national pensions. Earnings-related pensions are based on all earnings from work and self-employment during a person's working life in Finland. Earnings-related pensions are managed by authorized pension providers. National pensions entitlement is based on age, residence, and income. This type of pension is funded by the Finnish Social Insurance Institution (Kela) and applies to persons who have reached the age of 65. People born after 1965 refer to the earnings-related pension scheme for the retirement age.

In order to benefit from national pensions, beneficiaries must live or have lived in Finland for at least three years, and their other pensions and compensations should not exceed the income limit.

Finland provides for a special regime for people who have been unemployed for a long time and received basic unemployment allowance from Kela or earnings-related unemployment allowance from the unemployment fund. Eligible persons can receive old-age pension earlier and without reduction based on additional days of unemployment allowance. This regulation applies to persons who reached the age of 62 if they were born in 1957 or earlier, and at the age of 64 if they were born between 1958-1961.

Dependents/Survivors Benefits

In Finland, the survivors pension scheme is divided into two categories: the spouse's pension and the orphan's pension. Pensions are jointly paid by the Social Insurance Institution of Finland (Kela), through the National Pension Insurance (NPI) Fund, and by the deceased person's pension provider under the earnings-related pension scheme.

Kela provides for the spouse's pension to surviving spouses under the age of 65, if the survivor has been married to the deceased or has lived with them in a registered partnership before they turned 65, and if the couple had at least one child.

A child under 18 who is the deceased person's own or adopted child, or who was cared for by the deceased is eligible for the orphan's pension. This pension comprises a basic amount (EUR 70.53 per month) and EUR 141 if both parents are deceased. In addition to the basic amount, children are eligible for a top-up amount if they are less than 18 years old. The top-up amount is impacted by the other family pensions.

Invalidity Benefits

Persons over 17 and under 65 years of age who are covered under the Finnish social security system can benefit from a disability pension if their ability to work has been reduced for at least one year, following an illness, an injury, or disability. Disability pensions are paid by the Social Insurance Institution of Finland (Kela).

People suffering from a work-related injury or disease are covered by the Workers' Compensation Insurance for Finland, per the Employment Accidents Insurance Act. Employers have the obligation to insure their employees against occupational accidents or occupational diseases. This obligation kicks in if the salary paid to the employee exceeds EUR 1,500 per calendar year.

In the case where the employer has no obligation to insure his or her employees, victims of work-related accidents and diseases are still eligible for compensation, which will then be handled and paid by the Workers' Compensation Center.