Employer of Record Guide in 

Finland

Annual Leave (Vacation)

• Entitlement: 2.5 days per month worked (30 days per year for full-time employees)
• Enhanced Entitlement: After 15 years of service, increases to 2.5 days per month
• Holiday Pay: 50% supplement on vacation pay during summer months (May-September)
• Carry Over: Unused vacation must typically be taken within 18 months

Sick Leave

• Employer Responsibility: First 9 days of sick leave (after 1-day waiting period)
• Sick Pay Rate: 100% of regular salary for employer-paid period
• Extended Sick Leave: Paid by Kela (Social Insurance Institution) after employer period
• Medical Certificate: Required for absences longer than 3 days

Maternity Leave

• Duration: 105 weekdays (approximately 4 months)
• Timing: Can begin 30-50 days before due date
• Benefits: Paid by Kela at approximately 70% of salary (up to daily maximum)
• Job Protection: Position guaranteed upon return

Parental Leave

• Duration: 158 weekdays (approximately 6.5 months)
• Sharing: Can be shared between parents or taken by one parent
• Benefits: Paid by Kela at approximately 70% of salary
• Flexibility: Can be taken part-time with employer agreement

Paternity Leave

• Duration: 54 weekdays (approximately 2 months)
• Timing: Must be taken within 18 months of birth
• Benefits: Paid by Kela at approximately 70% of salary

Other Leave Types

• Child Care Leave: Unpaid leave until child turns 3
• Study Leave: Right to unpaid leave for education
• Force Majeure Leave: Short-term leave for family emergencies

Summary

Termination Types

Termination for Cause:

• Requires serious breach of employment obligations
• No notice period required
• Must be immediate and justified

Termination Without Cause:

• Requires "proper and weighty reason"
• Economic reasons (redundancy)
• Reorganisation of work

Notice Period Requirements

Notice periods are determined by length of service:

Severance Pay

• No Statutory Severance: Finland does not require severance pay by law
• Collective Agreements: May provide for severance payments
• Negotiated Settlements: Common in senior positions

Redundancy Procedures

Consultation Requirements:

• Must consult with employee representatives
• 14-day minimum consultation period for fewer than 10 employees
• 6-week consultation period for 10+ employees

Selection Criteria:

• Must be objective and non-discriminatory
• Consider skills, performance, and length of service

Final Pay Requirements

• Timing: Final salary must be paid by the next regular pay date
• Components: Include all accrued vacation pay and other entitlements
• Documentation: Provide detailed breakdown of final payments

National Public Holidays

Holiday Pay Rules

• Eligibility: All employees entitled to holiday pay
• Rate: Regular daily wage
• Work on Holidays: Double pay plus compensatory time off
• Part-time Employees: Proportional holiday pay

Regional Variations

Finland has no regional variations in public holidays, as they are nationally standardised.

Required Documentation

Employment Contract Must Include:

• Job title and description
• Salary and benefits
• Working hours and location
• Notice periods
• Applicable collective agreement

Tax and Social Security Forms:

• Tax card (verokortti) from tax authorities
• Social security number application
• Bank account details for salary payments

Work Authorization

EU/EEA Citizens:

• Right to work immediately
• Must register residence if staying over 3 months

Non-EU Citizens:

• Require residence permit for employment
• Work permit application through Finnish Immigration Service
• Employer may need to demonstrate labour market testing

Data Protection Compliance

• GDPR Compliance: All personal data handling must comply with EU GDPR
• Employee Consent: Required for data processing beyond employment necessities
• Data Retention: Specific rules for retaining employee records

Collective Agreement Coverage

• Applicability: Determine which collective agreement applies to the role
• Terms: Collective agreement terms override general employment law where more favourable
• Union Membership: Employees have right to join unions

Probationary Period

• Maximum Duration: 6 months
• Termination: Either party can terminate with 14 days' notice during probation
• Extensions: Not permitted beyond 6 months

Onboarding Timeline

Worker Classification

Employee vs. Contractor Distinction:

• Control Test: Level of supervision and instruction
• Integration Test: How integral the work is to the business
• Economic Reality: Who bears the financial risk

Misclassification Risks:

• Back payment of social security contributions
• Tax penalties
• Employment law protections apply retroactively

Collective Bargaining

Coverage:

• Approximately 90% of Finnish workers covered by collective agreements
• Agreements negotiated by industry-specific unions and employer associations
• Terms typically more favourable than statutory minimums

Key Sectors:

• Technology and services
• Manufacturing
• Construction
• Retail and hospitality

Cultural Considerations

Work-Life Balance:

• Strong emphasis on work-life balance
• Flexible working arrangements common
• Summer vacation period (July) widely observed

Communication Style:

• Direct but respectful communication
• Consensus-building approach to decisions
• Punctuality highly valued

Remote Work Framework

Legal Framework:

• Right to request flexible working arrangements
• Employer must provide equipment and cover costs
• Health and safety obligations extend to home offices

Tax Implications:

• Home office expense deductions available
• Cross-border remote work requires careful tax planning

Seasonal Considerations

Summer Vacation Period:

• Most businesses operate reduced hours in July
• Collective agreements often mandate summer vacation scheduling
• Holiday pay supplements apply during summer months

Winter Working Conditions:

• Specific health and safety requirements for winter work
• Heating and lighting obligations for employers
• Seasonal adjustment allowances in some sectors