Finland

Labor Compliance Guide

Labor Requirements

The Labor Law in Finland is regulated mainly by the Working Hours Act. The Act governs the terms and conditions of employment such as working hours, rest periods, wages, overtime, employment relationships. The other acts that govern employment relationships are Annual Holidays Act and Employment Contracts Act.

Hours & Pay Regulations

Normal Working Hours

An employee’s regular working hours shall be a maximum of 8 hours a day and 40 hours a week. A 5-day working week is common. The regular weekly working hours can also be arranged in such a way that the average is 40 hours over a period of no more than 52 weeks, but the daily working time shall not exceed 8 hours. Exceptions to the regular working hours can be made by collective agreements or individual employment agreements.

 

An employee’s working time, including overtime, may not exceed an average of 48 hours per week over a four-month period. Working Hour Act (Amendment as of Jan 1, 2020) Sec 5 and 18.

 

Stand By

An employer and employee may agree to on-call/standby work in the employment contract. During on-call, an employee shall be available for work at the employer’s discretion. On-call time is not counted as working time unless the employee has to stay at or in the immediate vicinity of the workplace. The amount of compensation for on-call/standby work is also agreed upon between both parties. Working Hour Act (Amendment as of Jan 1, 2020) Sec 4.

 

Shift Work

Regular working hours can be arranged in a shift work pattern for an employee. Shift work shall change regularly and at pre-agreed intervals. The shift work will be considered to be changed regularly if the shift does not coincide for more than 1 hour with the immediate following shift or if there is a maximum of 1 hour between the shifts. Working Hour Act (Amendment as of Jan 1, 2020) Sec 6.

 

Period based working time

Period-based working time framework is followed across particular sectors such as mechanical, accommodation, cultural, camping, etc services. The regular working time shall not exceed 120 hours in a 3 week period or 80 hours in a 2 week period.

 

However, the working can also be arranged in a manner in which the regular working time does not exceed 240 hours in a 3 week period or 3 consecutive two-week periods. The regular working time shall not exceed 128 hours in either a 3 week period or 88 hours in any 2 week period. Working Hour Act (Amendment as of Jan 1, 2020) Sec 7.

 

Working Hour Bank

A statutory working hours bank can be introduced in all workplaces, even in cases where an employer is not a party to any collective agreement. In simpler terms, a working time bank refers to an arrangement where an employee can save benefits in various forms such as mentioned below to the working-hours bank and can later withdraw the corresponding amount of free time from the working hour’s bank. 

 

The following may be transferred to the working time bank by the employee for each occasion or with the consent of the employee for a limited period:

      • Additional and overtime hours;
      • Hours worked in a Flexi hours system, up to a maximum of 60 hours in a four-month monitoring period;
      • Cash benefits, whether statutory or contractual, after first being converted into fixed-term benefits.

Employees are entitled to a minimum of 2 weeks’ savings per calendar year in a working time bank. However, if the Working TimeBank has been saved for more than 10 weeks, the employee shall be entitled to at least one-fifth of the accumulated working time bank per year. The employee is entitled to cash compensation instead of the time off. The employer shall provide leave during the next 6 months at the request of the employee. Working Hour Act (Amendment as of Jan 1, 2020) Section 14.

 

Regular working hours based on an agreement between an employer and employee

The employer and the employee may agree to extend the daily regular working time by 2 hours unless otherwise agreed in the collective agreement. In this case, the average weekly regular working time shall average no more than 40 hours over a period of 4 months. The weekly regular working time shall not exceed 48 hours. Working Hour Act (Amendment as of Jan 1, 2020) Sec 11. 

 

Flexi-Time

The employer and the employee may agree on Flexi working hours so that the employee may, within agreed limits, determine their daily working time.  The Flexi – working time agreement shall agree at least on: 

        • One continuous fixed working time;
        • The daily sliding limit (bandwidth period within which all required hours must be worked) for working time;
        • Placement of rest periods;
        • The maximum accumulated excesses and undercuts of regular working hours.

In Flexi hours arrangement, regular daily working hours may be reduced or extended by a maximum of 4 hours. The average weekly working time shall not exceed 40 hours on average over a 4-month period (monitoring/reference period), which may be exceeded or brought below the sliding limits. At the end of the period, the accumulated excess hours may not exceed 60 hours and the accumulated deficit or shortfall/shortage of hours may not exceed 20 hours. The employer and the employee may agree that the accumulation of overtime will be reduced by paid time off for the employee. Working Hour Act (Amendment as of Jan 1, 2020) Sec 12-13.

 

Flexible Working Hours

An employer and employee may agree on a flexible working time arrangement in which at least half of the working time can be decided by the employee independently. The flexible working time agreement shall agree at least on:

          • the days on which the employee may invest working time;
          • the placement of the Weekly rest;
          • any fixed working time, but not its location between 11 pm and 6 am;
          • the applicable working time after the termination of the flexible working time agreement.

Note: The regular weekly working time in flexible working hours may not exceed an average of 40 hours over a 4 month period. Working Hour Act (Amendment as of Jan 1, 2020) Sec 13.

 

Recordkeeping Requirement

Employers must register the remuneration paid for working hours, overtime work, etc, and maintain the book at least until the end of the claim period. The limitations for possible claims are: 

      • During employment,
      • Two years from the end of the calendar year in which the entitlement (for example, to overtime premiums) arose, and for two years after the end of the employment.

Working Hours Act, No. 605 of 1996 (as amended), §32.

Overtime

The hours worked beyond the statutory working hours threshold are counted as overtime if it has been performed with the employer’s consent. If the working hour’s arrangement is one where working hours are averaged over a reference period, all work that is performed in addition to the regular working hours given in the work schedule is considered to be overtime.

 

Daily overtime is defined as work in excess of eight hours a day. Weekly overtime is defined as work in excess of 40 hours a week and that is not counted as daily overtime. If a Weekly working time of fewer than 40 hours has been agreed upon, the additional work in addition to the regular working hours entered in the shift list is work that is not overtime.

 

The maximum amount of overtime work that can be performed during a 4 month period is 138 hours, and the aggregate hours of overtime work may not exceed 250 hours in a calendar year. An employer can agree to additional overtime with employees, in such cases the maximum amount of additional overtime is 80 hours per calendar year, however, the maximum amount of 138 hours per 4 months cannot be exceeded.

 

For example, if an employee has worked 8 hours each day from Monday to Friday (a total of 40 hours) and then works 12 hours on Saturday, the first 8 hours constitute weekly overtime while the subsequent 4 hours are considered daily overtime and therefore do not count towards the weekly overtime.

 

When flexible working hours are used, daily overtime is work that exceeds eight hours per day and weekly overtime is work that is done on a holiday ( rest day according to the shift schedule) and that exceeds 40 hours without being overtime.

 

Pay for overtime work – For daily overtime, the employee must be given 50 percent more pay for the first two hours and 100 percent for hours beyond that. For weekly overtime, the additional pay must be 50 percent.

 

Employees can be remunerated for overtime by giving them paid time off in lieu of either all or some of the overtime hours worked instead of the monetary compensation. The amount of time off in lieu is given based on the increment percentages applicable to overtime pay. For example, the compensation for one overtime hour is the regular wage plus 50%, the equivalent time off is 1.5 hours. The time off shall be taken within a period of 6 months from the date on which overtime work was performed. Working Hours Act, No. 605 of 1996 (as amended), § §  18-23, 33.

 

Additional Work

Additional work is work that is performed at the employer’s initiative and with the employee’s consent and which exceeds the contractual regular working hours but does not exceed the statutory regular working hours. An employee’s normal working hours can be below the statutory working hours based on either their employment contract or a collective agreement.

 

For example, an employee regularly works 6 hours per day, and one day, he works for 8 hours. The difference between an employee’s normal working hours and the actual hours worked, i.e. 2 hours shall be counted as additional work.

 

Pay for additional work – An employee is generally compensated based on the pay for regular wages unless an agreement between the employer and employee provides for a higher rate of wages for such work. This compensation can however be converted into time off during regular working hours either in full or part and shall be taken within 6 months from the date of performance of additional work. The employer and the employee can also agree to transfer the time off into the working hour’s account or to combine it with the carried-over annual vacation. Working Hours Act, No. 605 of 1996 (as amended), § §  18-23, 33.

Night Work

In Finland, night work is defined as the working hours between 11 pm and 6 am. 

 

An employee can be employed for a maximum of 5 consecutive shifts of at least 3 hours between 11 pm and 6 am. Employees shall be granted at least 24 hours of uninterrupted leave after such a number of shifts. An employee and employer can further agree on 2 more consecutive shifts.

 

In case of dangerous work, the working time shall not exceed 8 hours in any 24 hour period during which an employee is working the night shift. Working Hour Act (Amendment as of Jan 1, 2020) Sec 26.

Breaks

If the daily working hours exceed 6, the employee must be granted a regular unpaid rest period of at least 1 hour. The rest time may not be scheduled at the beginning or at the end of a working day. 

 

Additionally, if the working time exceeds 10 hours per day, the employees shall also be entitled to an additional break of not more than 30 minutes after 8 hours of work.

 

In case the working time in shift or part-time work exceeds 6 hours, an employee is entitled to at least 30 minutes break, or shall be permitted to eat during work. Working Hour Act (Amendment as of Jan 1, 2020) Sec 25.

 

Daily Rest

Employees are entitled to a minimum of 11 hours of rest time in a period of 24 hours between the end of shift and the beginning of the next shift, excluding standby duty. In the case of periodic work, the daily rest can be reduced to 9 hours per day and if flexible working hours have been adopted, the daily rest can be reduced to 7 hours per day at the option of the employer.

 

Compensatory rest periods – An employee whose daily rest period has been shortened must be given a compensatory rest period in connection with the subsequent daily rest period. However, in cases where this is not possible, he/she must be given the compensatory rest as soon as possible and in no case beyond 14 days. The compensatory rest period shall be provided in such a manner that the employee is able to take this in one single block and is also not required to be on call during such a rest period. This is not applicable in the case of employees working under flexible work time arrangements. Working Hour Act (Amendment as of Jan 1, 2020) Sec 29.

 

Weekly Rest 

An employee is entitled to at least 35 hours of uninterrupted rest each week, preferably on a Sunday. The weekly free time period can be arranged so that it averages 35 hours within a 14-day period. Minimum free time must, however, be of at least 24 hours during each 7 day period.

 

In case of uninterrupted shift work, an employee is entitled to a rest period for an average of 35 hours over a maximum of 12 weeks. However, an employee can be provided with weekly rest periods in a manner different from the prescribed, if the regular working hours are less than 3 hours per day. Working Hour Act (Amendment as of Jan 1, 2020) Sec 27 – 28. 

Work On Rest Days

An employee who works on the weekly rest period may be given time off equal to the rest period worked within three months from the work being carried out.

 

Employee may also be compensated by paying, a separate cash compensation determined on the basis of the basic amount of overtime pay [ 50 % premium for the first two hours and 100 % for hours beyond that], in addition to any overtime and Sunday compensation. Working Hour Act (Amendment as of Jan 1, 2020) Sec 27 – 28.

Sunday Work

Employees can be required to work on a Sunday or church holiday only when the work concerned is regularly carried out on the said days due to its nature or when agreed upon between employer and employee. The wage payable for Sunday work performed as part of regular working hours is twice the regular wage. For overtime work performed on a Sunday, overtime pay must be increased by 50% for the first two hours and by 100% for the following hours, calculated on the regular rate of pay.

 

Time off in lieu: Employees can be remunerated for overtime work on Sunday by paid time off in lieu of either all or some of the overtime hours worked instead of the monetary compensation. The amount of time off in lieu is given based on the increment percentages applicable to overtime pay. For example, the compensation for one overtime hour is the regular wage plus 50%, the equivalent time off is 1.5 hours. The time off shall be taken within a period of 6 months from the date on which overtime work was performed. Working Hours Act, No. 605 of 1996 (as amended), § §  20, 21.

Public Holidays

Following is the list of 11 commonly observed public holidays in Finland:

      • New Year’s Day – January 1st
      • Epiphany – January 6th
      • Good Friday
      • Easter Monday
      • May Day – May 1st
      • Ascension Day
      • Whit Sunday
      • All Saints Day
      • Independence Day – December 6th
      • Christmas Day – December 25th
      • Boxing Day – December 26th

Employees who are required to work on a public holiday are entitled to double pay. Collective bargaining agreements can contain provisions on further holidays with full salary entitlements, including New Year’s Day, Twelfth Day, Good Friday, Easter Monday, and Ascension Day. Working Hours Act, No. 605 of 1996 (as amended), §  33. 

Annual Leave

Employees can earn annual vacation in three different ways:

      • According to 14 day rule;
      • According to 35 hours rule; and
      • According to the ‘leave entitlement rule’.

An employee earns an annual holiday entitlement for working during the holiday credit year which is the period between April 1 and March 31 and the leave entitlement is based on the length of the employment relationship.

In the case of an employment relationship that has lasted for less than 12 months, by the end of the holiday credit year, an employee is entitled to 2 weekdays of holiday (24 weekdays in total), and for an employment relationship that has lasted for more than 12 months, 2.5 weekdays of the holiday, for each full holiday credit month. An employee must have worked at least 14 days/at least 35 hours in a month to be eligible for 2.5 days of annual leave for that month. The maximum amount of annual leave is either 24 days or 30 days.

 

The 14-day rule applies to employees whose employment contract provides that they work at least 14 days every month. Employees shall be entitled to annual leave under this rule whether they work 1 hour or 8 hours per day. 

 

The 35-hour rule applies to employees whose employment contract provides that they work a minimum of 35 hours during at least 1 month but do not come under the 14-day rule. In the calculation of full holiday credit month, such absences from work in which the employer is obliged to provide pay, are considered to be the working time of an employee. For example, if an employee is on maternity, paternity, sickness leave, etc. subject to the maximum number of days allowed by the legislation.

 

Note: The holiday credit year means the period from 1 April to 31 March inclusive; the holiday season means the period from 2 May to 30 September inclusive; and “a weekday” means a day other than Sundays, church festivals, Independence Day, Christmas Eve, Midsummer Eve, Easter Saturday and the First of May.

 

Holiday Pay –  An employee has a right to receive at least his/her regular or average pay (including fringe benefits) for the period of the annual holiday. Fringe benefits that are not available to the employee during the holiday are paid as monetary compensation instead. The system of calculating the holiday pay depends on the way the employee is paid such as whether the employee is paid monthly, weekly or hourly, etc.

 

Timing of payment of holiday pay – This shall be paid before the start of the vacation period, however, if the annual leave is for a period not exceeding 6 days, an employee can be provided with the holiday pay during his/her normal payday.

 

Leave entitlement rule – Employees who are not covered by the 14 days or the 35 hours rule are entitled to take leave equivalent to the annual holiday ‘leave entitlement rule’. In this case, holiday compensation is paid to the employee, not holiday pay as per the 14 days or 35-hour rule. Under this rule, leave entitlement is based on the length of the employment relationship with the same employer. In all cases, employees are entitled to 2 weekdays of leave for each month during which they have been employed by the same employer during the holiday credit year. Thus, in employment relationships that have lasted for 12 months, the employee is entitled to 4 weeks of leave, for which he/she will be paid holiday compensation according to his/her earnings.

 

Holiday Compensation – Employees not covered by the rules on earning annual holiday (14 days or 35 hours rule) are entitled to take leave equivalent to annual holiday, for which they will receive payment in accordance with the rules on holiday compensation. Holiday compensation is paid:

      • For the period of leave entitlement to employees who come under the ‘leave entitlement rule’, namely, to employees with fewer hours than the minimum required under the rules on the earning of the annual holiday; » to employees working at home, etc
      • At the end of the employment relationship, for any holidays not taken; and
      • If the employment relationship ends before the employee has earned any annual holiday entitlement

Calculation of Holiday Compensation:

Holiday compensation for employees who come under the ‘leave entitlement rule’ during their employment relationships – An employee whose employment has lasted for at least 12 months, the holiday compensation is 11.5% of the pay given for the time worked during the holiday credit year. For employees with employment relationships of less than 12 months, the holiday compensation is 9% of the pay given for the time worked.

 

If during the holiday credit year, the employee has been on special maternity, maternity, paternity, or parental leave, the pay used as a basis for calculating the sum payable for the period of leave is adjusted for these periods of absence. No other calculated pay items are added to the payment used as a basis for calculating holiday compensation.

 

Holiday compensation at the end of an employment relationship – In case, an employment relationship is terminated, the employee is entitled to receive holiday compensation equivalent to annual holiday pay for days for which the employee had not yet taken holiday or received annual holiday pay or holiday compensation.

 

Additional Leave – If an employee has not earned at least 24 annual leave days because of absence from work due to sickness, accident, or medical rehabilitation, the employee shall have the right to additional leave days to supplement their annual holiday to the extent that the duration of the annual leave is less than 24 days. The entitlement to additional leave will terminate after 12 months of uninterrupted absence for the reasons mentioned above. If the employee returns to work and continues to work for a period entitling to full leave-earning month, a new 12-month period of absence due to disability or rehabilitation will re-commence after such a period of work. The employee shall be entitled to a remuneration corresponding to their regular or average wage for the additional leave days. 

 

Timing of annual holiday – Annual holiday is earned in the form of weekdays and is also taken as weekdays. Weekdays are considered as days other than Sundays, church festivals, Independence Day, Christmas Eve, Midsummer Eve, Easter Saturday, and the First of May. A full holiday week, therefore, consists of 6 days holiday (i.e. including Saturday) even if the employee works a 5-day week. 

 

The summer holiday, comprising 24 weekdays of the annual holiday, must be granted by the employer in such a way that it is taken during the holiday season (between May 2 and September 30). The rest of the holiday (winter holiday) must be given by the start of the following holiday season. Annual holiday must always be given in such a way that it includes an uninterrupted period of at least 12 weekdays. 

 

If granting the annual holiday during the holiday season results in substantial difficulties for the employer’s operations in seasonal work, the summer holiday may be granted outside the holiday season during the same calendar year (either before or after the holiday season).

 

Incapacity to work during the annual holiday – If an employee is not able to work due to childbirth, illness, or accident and such incapacity last for more than 6 holiday days (waiting days), an employee can make a request in such cases to his/her employer to postpone the holiday for a later date. In any of such cases, the employee does not lose his/her right to a 4-week annual holiday.

 

Timing of annual holiday postponed because of incapacity for work – Any summer holiday postponed because of incapacity for work must be taken at a later date during the same holiday season. Correspondingly, a winter holiday not taken may also be postponed to a later date. Winter holiday must be granted before the beginning of the next holiday season. If it is not possible to provide the leave-in such periods, the employer shall provide the leave no later than by the end of that calendar year.

 

Carry forward annual leave – An employee has a right to carry forward his/her portion of vacation leave exceeding 24 weekdays. An employer and employee can also agree on carrying forward a portion of leaves exceeding 18 weekdays or taking the portion of the holiday exceeding 12 weekdays within a year of the end of the holiday season. Annual Holidays Act, No. 62 of 2005 (as amended), § §  4-6, 9, 11, 27.

Minimum Wage

There is no statutory minimum wage in Finland. The collective agreement determines the wages to be paid based on employment terms.

Special Leave

Maternity Leave

Employees who are expectant mothers are entitled to 105 workdays of unpaid maternity leave (Saturday is considered as a workday), which can begin 30 to 50 days prior to the expected date of birth. Employment Contracts Act, No. 55 of 2001 (as amended), Ch. 4; Health Insurance Act, No. 1224 of 2004 (as amended), ch. 11. 

Paternity Leave

Fathers can take up to 54 workdays of unpaid paternity leave.  Employees can choose to take leave up to 18 weekdays at the same time as the child’s mother and the rest of the paternity leave shall be taken after the parental leave, or employees can use their paternity leave (1-54 weekdays) after maternity and parental leave ends. In both cases, the entire paternity leave must be taken before the child turns 2 years of age and cannot be assigned to the other parent.  Health Insurance Act, No. 1224 of 2004 (as amended), ch. 11, § §  6.

Parental Leave

Employees are entitled to 158 workdays of unpaid leave. Parental leave begins after the maternity leave ends. Both parents can take full-time parental leave for a maximum of 2 leave periods. The minimum length of a period of leave is 12 working days. The leave may be taken part-time with each of the parents agreeing with their employer to shorten their working hours and reduce their pay accordingly for at least 2 months. Health Insurance Act, No. 1224 of 2004 (as amended), ch. 11, § §  7.

Child Care Leave

Employees are eligible for child care leave beginning after parental leave and lasting until the child reaches the age of 3. A child care benefit is payable for this period by the Social Insurance Institution.

 

The entitlement to unpaid childcare leave of the parent of an adopted child continues for at least 2 years following adoption, but not beyond the time when the child starts school. The minimum period for childcare leave is 1 month. This leave may only be taken by one of the parents or guardians of a child at a time. The leave can be taken in one or two periods of at least one month unless the employee and the employer agree on more than 2 periods or a period shorter than 1 month.

Sick Leave

Employees are legally entitled to a total of 9 workdays of paid sick leave during each working year. Holidays are not counted as workdays. If the employment relationship has lasted for at least one month, the employee will be paid full wages for the said period. If the employment relationship has lasted for a period shorter than one month, half of the wages will be paid for the same period.  Health Insurance Act, No. 1224 of 2004 (as amended), ch. 11; Employment Contracts Act, No. 55 of 2001 (as amended), Ch. 2 §  11.

Study Leave

Unpaid Study leave is available to employees whose full-time employment with the same employer has lasted for one year in one or more periods. The maximum length of study leave is two years over a period of five years in one or more installments, If the employment has lasted for less than a year but at least three months, the maximum length of study leave is 5 days.

 

If the study leave is interrupted due to sickness, maternity, accident, etc, and such incapacity to work has lasted for more than 7 days, in such case, the employer can at the request of the employee postpone the leave and grant the remaining study leave to some other days. Study Leave Act, No. 273 of 1979 (as amended), § §  4-6.

Job Alteration Leave

Job alternation leave is an arrangement enabling an employee to take a temporary leave of absence from work lasting from 100 to 180 calendar days. The compensation for leave is not paid by the employer but is paid via an unemployment fund or the Social Insurance Institution of Finland (Kela).

 

Employees are eligible for job alternation leave when they have an employment history of at least 20 years. The maximum age to qualify for alternation leave is 60. Act on Job Alternation Leave, No. 1305 of 2002 (as amended), § §  2-7. 

Partial Care Leave

An employee who has been employed by the same employer for a period of at least 6 months in the previous 12 month calendar period is entitled to unpaid leave in order to take care of the child until the child finishes the second year of school, or if the child has to start school one year earlier than normal, until the end of the third school year. In the case of a  parent of a disabled child or a child with a long-term illness in need of particular care and support may be granted partial child-care leave until the child turns 18. Both the parents are entitled to such leave during the same calendar year but they cannot take the leave simultaneously. The duration of partial care is not defined under the law. Health Insurance Act, No. 1224 of 2004 (as amended), ch. 11, § §  8-10. 

Adoption Leave

Adoptive parents are entitled to unpaid parental leave for a period of 234 days calculated from the date of the child’s birth. Employees are entitled to allowance from social security. However, the parental allowance is paid for at least 200 workdays. If the child is received later than 54 weekdays after the child’s birth, parental allowance is paid for 200 weekdays. Adoptive parent’s paternity leave must be taken during the two years following the date the child is taken into care. Health Insurance Act, No. 1224 of 2004 (as amended), ch. 11, § §  8-10. 

Temporary Childcare Leave

The parents of children under the age of 10 have a right to a 4 days’ temporary unpaid child care leave in case of a sudden illness of the child. Health Insurance Act, No. 1224 of 2004 (as amended), ch. 11, § §  8-10.

Last updated on: June 29th, 2021