Are you a US or Canadian employer looking to expand your talent base beyond North America? Outsourcing to Finland is a great way to access a highly skilled and educated workforce, but it can also be an intimidating journey to navigate on your own.
Simplify the process by hiring through an Employer of Record (EOR) such as Borderless in Finland. From handling contracts and documentation to employee insurance and benefits, taxes, and more, let's break down why you should enlist the services of an EOR in Finland to hire.
Why Hire Talent in Finland?
Finland is an excellent option for employers in the US and Canada alike to hire employees. Its highly educated workforce, leading technology, and competitive wages make it an attractive package for companies looking to outsource high-quality labor.
Another reason the European country makes a fantastic choice for employers is its tax incentives. Its corporate tax rate of 20% is relatively lower than those of other countries, helping to reduce costs associated with employment, making it attractive to do business in Finland.
The Finnish education system also plays a big role in why employers should consider recruiting talent in the nation. It has consistently been ranked as one of the best in Europe, producing highly educated graduates with strong technical and English language skills that are needed by many businesses.
Additionally, due to its global outlook on education and culture, many international students choose to study at Finnish universities – about 31,000 every year! The quality of education creates a diverse pool of potential hires made up of various backgrounds and experiences that can bring tremendous value to any company’s workforce mix.
Finally, Finland's business environment is renowned for being open and welcoming towards foreign investment, making it easier for internationally-based companies to hire talent here. This creates opportunities for job seekers at home and abroad! Combined, these considerations make Finland the ideal destination to remotely hire new employees. The nation provides access to top-notch talent while reducing costs and streamlining processes, allowing companies to focus on growth strategies.
How Can I Legally Hire an Employee in Finland?
The most common way to hire an employee in Finland is through an employer of record (EOR), the legal employer in the country you’re doing business. Hiring requires legal compliance with Finland’s rules and regulations. An EOR enables employers outside of Finland to recruit, pay, and manage employees within the country.
Without an EOR, a US or Canadian employer must submit relevant documents to legally hire an employee in Finland. These include a labor contract template and evidence of financial security among others. Subsequently, these documents will be reviewed by the Finnish Immigration Service before any permits may be issued. Once the requirements, which may incur long wait times, have been verified employers will receive permission to hire an employee in Finland.
Another aspect of employment a US or Canadian employer should keep in mind is that drafting a legally compliant employment contract is essential for hiring employees in Finland. The Employment Contracts Act governs the parameters of these contracts, and oftentimes, employers need to provide conditions in which the benefits exceed those of the statutory requirements. Collective agreements further delineate employee rights and benefits. Without the help of an EOR, employers must ensure to include terms that meet or surpass the standards of those outlined in the Act.
In Finland, wages are also supplemented with generous bonus payments, incentivizing top-quality talent. Foreign employers should also be aware that more than 59% of Finnish workers belong to a trade union and so abiding by Finnish work laws and regulations will set them up for success. An EOR can guide you through differences in work culture between Finland and Canada or the US.
What Does an EOR in Finland Do?
An EOR in Finland is responsible for managing the entire process of hiring an employee. From preparing documentation, establishing contracts, and setting up payroll, to name a few, an EOR ensures that an employer follows the letter of the law.
Contracts and Documentation
An EOR in Finland will draft a contract between the employer and employee outlining the terms of employment. Included are salary, job description, benefits, holidays, and all other entitlements and conditions of work. Additionally, an EOR will also prepare a proof of financial security required for visa applications, if needed, or other purposes pertaining to employment.
Employee Insurance and Benefits
An EOR in Finland will make sure that employers provide appropriate insurance coverage for their employees. This includes health insurance and unemployment benefits, the latter of which an employee experiencing temporary job loss, among meeting other criteria, can receive.
In terms of pay, Finland has no government-mandated minimum wage. Employers must pay a minimum wage determined by collective bargaining. This is currently, on average, approximately €3681/month (USD$ 3880).
Holiday bonuses are also covered by collective agreements in Finland. Generally, a holiday bonus amounts to 50% of the pay for the annual holiday. Employers pay this bonus either before or after the annual holiday, depending on the agreement. Once again, this is not government mandated but is governed by your agreement.
Vacation and Public Holidays
An EOR in Finland can help employers ensure their employees receive their 24 legally mandated paid leave days each year as well as be aware of public holidays that everyone in the country can enjoy. This makes it 36 days of annual holidays! Holidays are also generally accrued in Finland. Annual holidays must be taken in the holiday season during the summer or a week in the winter. Most employees take an uninterrupted stretch of annual holidays during this time.
An EOR can also help employers determine if additional vacation or unpaid leave may be available to employees. The Republic of Finland currently celebrates 12 national holidays and they are:
- January 1: New Year's Day
- January 6: Epiphany
- April 7: Good Friday
- April 9: Easter Sunday
- April 10: Easter Monday
- May 1: May Day
- May 18: Ascension Day
- May 28: Pentecost or Whit Sunday
- June 23: Midsummer's Eve
- December 6: Independence Day
- December 24: Christmas Eve
- December 25: Christmas Day
Taxes
Employers must withhold personal income taxes levied on employees’ earnings on their behalf and then remit the amounts to local authorities regularly. An EOR maintains that all taxes are filed timely, and amounts withheld from employees’ paychecks are compliant and paid correctly in accordance with relevant tax regulations. At the same time, an EOR is resourceful in helping employers understand eligible corporate deductions companies themselves can take advantage of.
What Are Your Responsibilities?
Hiring an employee through the help of an EOR in Finland obligates a foreign employer to meet the following responsibilities:
- Gain an understanding of the local culture. This can help foster trust and lead to a more productive working relationship.
- Confirm your employee’s right to work legally in Finland by providing them with permits and work visas where needed.
- Ensure that your employee is provided with proper insurance coverage and benefits, including leave entitlements, according to local regulations and enforce their usage.
- Comply with local labor laws and regulations to pay corporate as well as withhold personal income taxes.
- Reinforce employee safety and health while on the job.
What Are the Advantages of Hiring Through an EOR in Finland?
An EOR in Finland offers employers several advantages. They can:
- Simplify the process of hiring and onboarding an employee. The EOR takes care of the legal paperwork, making sure that all documents are properly completed and filed with the relevant authorities.
- Ensure employers comply with all local labor laws and regulations. An experienced EOR should be able to navigate employment within current legislation and advise employers to meet compliance. This may be especially important when legislation is transitioning in part or in whole as it may require employers to simultaneously comply with existing as well as new rules.
- Give employers access to a pool of qualified professionals who are highly familiar with the Finnish culture and language and are knowledgeable about the basic rights and rules of working in Finland.
- Help employers save substantial time and money by avoiding foreseeable delays or taking steps to prevent errors due to unfamiliarity with local laws and regulations.
Simply put, relying on EORs can help protect the employer from any potential legal issues that could arise. Not knowing local labor regulations and unintentionally violating them do not make good defenses and can very well be prevented by utilizing the services of an EOR. EORs are also an immensely helpful resource for employers to find and match the right talent to the right jobs efficiently without needing to invest in costly recruitment processes or training programs.
How Do I Choose the Right EOR for My Business in Finland?
When it comes to choosing the most suitable EOR to hire in Finland, consider:
- Their proven experience and expertise in the Finnish labor market. A service provider that is hugely familiar with local regulations is crucial.
- One which offers a range of services. Ask potential EORs what they provide such as whether they offer training programs or steps to comply with local labor laws.
- Their reliability in providing support before, during, and after the hiring process. This could include providing ongoing legal advice, administering onboarding, to other operational tasks.
Ultimately, selecting an experienced and reliable EOR in Finland can make all the difference when it comes to successfully hiring employees.
Borderless: Unlock the Potential of Your Business in Finland and Beyond
Utilizing an EOR like Borderless to hire in Finland offers a variety of advantages for US and Canadian employers. From start to finish, managing employment-related matters in accordance with compliance using an EOR is often a wise decision for global hiring.
Book a demo today and see how Borderless can support your hiring needs in Finland.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
