Employment relationship
Pay
An employee is entitled to remuneration for the work performed, and the obligation to pay wages is the employer’s principal obligation. The employer and employee may agree on how the work done is to be compensated. There is no statutory provision for a minimum wage. In agreeing on pay, the employer is bound by the provisions of the applicable binding collective agreement. If there is a valid universally binding collective agreement for the sector, even unaffiliated employers must comply with its provisions. A reasonable wage must be paid for the work, and employees must be given a pay slip.
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General information on topic
What is the wage to be paid?
Remuneration for work is usually paid in the form of money. Remuneration may also consist of a combination of money and a commodity or fringe benefit.
There is no minimum wage law in Finland. Employer and employee may agree in the employment contract on how the work is to be compensated. However, this freedom of contract is restricted by the wage provisions in the applicable collective agreement. Employers may not ignore the minimum wage provisions of an applicable collective agreement even in an employment contract.
If the employer is a member of an employers’ organisation that has signed a collective agreement, the wage provisions of that collective agreement are binding upon him on the basis of that membership.
Some collective agreements are defined as universally binding in their respective sectors. This means that even employers who are not members of an employers’ organisation must comply with the wage provisions of a universally binding collective agreement in their sector.
For instance, the collective agreement in the wholesale and retail trade sector has been confirmed as universally binding. Therefore all employers in the wholesale and retail trade sector must comply with the collective agreement.
How much is the wage if there is no collective agreement?
If there is no collective agreement with which the employer must comply, pay is simply agreed on between employer and employee in the employment contract. In such situations, the wage provisions of a collective agreement (not a universally binding one) that correspond to the work to be done by the employee may be used as a reference in estimating and agreeing on pay.
If nothing has been agreed concerning pay in the employment contract, the Employment Contracts Act stipulates that the employer must pay the employee a wage that is considered usual and reasonable for the work in question. There are no explanations in the Act as to what might be considered ‘usual’ and ‘reasonable’. In such situations, the work performed by the employee must be used as a basis for estimating his/her pay. Published statistics, such as Wages, Salaries and Labour Costs (Statistics Finland), may be used as a reference in determining an appropriate level of pay. In case of a dispute, the question of whether the pay for any given job is usual and reasonable will ultimately be resolved by a court on a case-by-case basis.Instructions for employee
Where can I find information on wages paid?
Collective agreements in various sectors specify a minimum wage. Universally binding collective agreements are available in the Finlex online service. Pay details are available on the websites of various trade unions regarding their sectors.
There are sectors that have no valid collective agreement and therefore no source for determining a comparable wage. If you are concluding an employment contract in a sector like this, you must be aware that your pay will only be based on your employment contract with your employer. When agreeing on the amount of pay, take into account the fact that if your pay is less than the minimum wage specified in the Unemployment Security Act, the wage earner’s work requirement is not being met, meaning that you will not be entitled to earnings-related unemployment allowance, basic unemployment allowance or labour market subsidy.
If you agree on a wage lower than required in that Act, it will affect your unemployment security if you become unemployed. For further information on pay that fulfils the above criteria, consult the Kela website.
How do I notify my employer of a sickness absence?
Ask your supervisor what the workplace policy on sickness absence notifications is and what kind of a certificate you need to deliver to the employer. Ensure that you follow the employer’s instructions.
What do I do if I don’t get a pay slip?
If you do not receive a pay slip in connection with wage payment, contact your supervisor and ask for it. You may use this form: Document request to employer (doc, in Finnish).
If you are not given a pay slip despite asking for it, contact the occupational safety and health division at your local Regional State Administrative Agency. An occupational safety and health inspector may, with your consent, take monitoring action to obtain the information in question.
What do I do if my employer does not pay all the wages owed to me?
If you notice an error in the payment of your wages, request a correction from your supervisor. You should do this immediately, and in any case before the next payday. You must also notify your supervisor if you have been paid too much, because the employer is entitled to reclaim overpaid wages. In both cases, aim to resolve the situation by negotiating.
If the wage discrepancy is due to an error in calculation, a disagreement about how the wages are determined or simple negligence on the part of the employer, you may use these forms to claim your pay receivables:
Demand for the payment of outstanding salary in an ongoing employment relationship (doc)
Demand for the payment of outstanding salary, when the employment relationship has ended (doc)
Keep a copy of the pay receivables claim you sent to your employer, as you may need it later.
If, after negotiations and claims, your employer still will not pay your wages, contact your trade union. If you are not a member of a trade union, you may contact other legal service providers such as legal aid offices, attorneys’ offices and private attorneys. An occupational safety and health inspector cannot assist you in filing a lawsuit or provide legal counsel for you in court.
If you suspect that your employer is insolvent, contact the employment and economic development office in your home community immediately and file an application for pay security. This application must be filed within three months of the receivable falling due. For further information on pay security, consult the TE Services website.
If your employer has withheld your entire wage and gives as the reason that you owe him money e.g. for damage compensation, this may be a violation of the employer’s right of set-off. If the employer has withheld your wages as a set-off, contact the occupational safety and health division. An occupational safety and health inspector will evaluate whether your case requires monitoring action.Instructions for employer
Compliance with a universally binding collective agreement
An employer who is not a member of an employers’ organisation must check whether there is a universally binding collective agreement in force in the sector, the wage provisions of which the employer is required to comply with. Universally binding collective agreements are available in the Finlex online service. Agreeing on pay in a written employment contract is in the interests of both the employer and the employee.
Issuing a pay slip
The employer must ensure that employees are given a pay slip in connection with every payment of wages. The pay slip can also be provided in electronic form if the employee is able in practice to check the accuracy of the pay slip also in electronic form. If an employee has not received a pay slip for every payment of wages, they are entitled to receive the missing pay slips on request. If the employer does not issue the pay slips, despite having been asked to do so, an occupational safety and health inspector may, with the consent of the employee, undertake enforcement action to obtain said documents.
If the employer does not to give an employee a pay slip despite the employee's request, this is a punishable offence under the Employment Contracts Act, i.e. a violation of the Employment Contracts Act.
Instructions for employees on sickness absence notifications
The employer must ensure that employees are given clear instructions on how to notify the employer of sickness absences and on what kind of a certificate of incapacity the employee must submit. The employer must consult the applicable collective agreement regarding pay during sick leave in employment relationships.
The contents of a pay slip
The purpose of a pay slip is to give the employee the opportunity to check that their wages have been correctly calculated and paid. A pay slip must reveal the amount of wages to be paid and the grounds for determining it.
The contents of a pay slip:
- employer’s details
- employee’s details
- the time for which the wages are being paid
- pay day
- basic pay (including the number of hours in the case of hourly wage)
- various bonuses and allowances
- Sunday work bonus
- remuneration for additional work
- overtime remuneration
- other potential compensation
- fringe benefits, and
- deductions made from wages, such as tax withheld in advance, the employee’s employment pension insurance contribution, unemployment insurance contribution, the daily allowance payment of health insurance and other potential deductions.
Legislation
Employment Contracts Act (55/2001)
- Chapter 2
- Section 7 General applicability of collective agreements
- Section 10 Minimum pay in the absence of a collective agreement
- Section 11 Pay during illness
- Section 13 Payday and pay period
- Section 14 Pay period on termination of employment relationship
- Section 16 Payment of pay
- Section 17 Employer's right of set-off and advance
Court decisions and precedents
The Supreme Court’s decision (1982 II 73, in Finnish) deals with the employee’s right to pay for the days the payment is late.
The Supreme Court’s decision (KKO:1988:103, in Finnish) deals with the employee’s right to pay for the days the payment is late.
The Supreme Court’s decision (KKO:2011:85, in Finnish) deals with the time limit for claiming outstanding wages.
Glossary
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