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Compliance

Finland employment compliance: a guide for employers

What you owe a Finnish employee, and by when: contracts, collective agreements, working time, annual leave and sick pay. Every figure links to Finlex or työsuojelu.fi so you can check it.

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Finland employment compliance: a guide for employers

At a glance

  • Contracts: you have 7 days to give a new hire eight specific pieces of written information, and a month for seven more. The three-hour-a-week exemption is the only way out.
  • Collective agreements: if your sector has a generally binding one, it overrides your contract even though you never signed it, and underpayment claims run five years back.
  • Working time: 8 hours a day and 40 a week, averaging 48 including overtime over four months. You must get consent for overtime every single time.
  • Annual leave: accrues 1 April to 31 March, at 2 days a month for the first year and 2.5 after that. The switch happens on 31 March, not on the hire anniversary.
  • Sick pay: you pay full salary for the day they fall ill plus the next nine weekdays. Saturdays count; Sundays and public holidays do not.
  • The calendar repeats: 31 March closes the leave year, 2 May opens the summer holiday season, and working-time periods close every four months.

You have hired someone in Finland, and five separate acts now apply to you at once. None of them is optional, none of them waits until you have an HR team, and the ones that cost the most money are rarely the ones people warn you about.

This page is the map. Each section gives you the rule, the numbers you need at month-end, and a link to the full treatment.

Start where you are. Hiring this week? What goes in the contract and which collective agreement binds you: get the second one wrong and every contract you write inherits the error. Someone off sick? Who pays, and for how long. Running May payroll or booking summer holidays? Annual leave and holiday pay. Tracking hours, overtime or flexitime? Working time. Want the year on one page? The recurring deadlines.

Citations use the acts’ own Finnish numbering, so ECA 2:4(3) means chapter 2, section 4, subsection 3 of the Employment Contracts Act.

What must an employment contract contain?

Strictly, nothing: the contract itself has no mandatory content. What you cannot skip is the written statement of the key terms of work (sixteen items, on two deadlines), and in practice that ends up being the same document.

The contract can be oral, written or electronic (ECA 1:3). But you must separately hand over a written statement unless those terms already appear in a written contract (ECA 2:4(1)).

What When
Items 1–8: parties, start date, fixed-term ground, probation, place of work, main duties, how pay is determined, working time 7 days from the first day of work
Items 9–15: variable hours, agency work, training rights, annual leave, notice period, the applicable collective agreement, insurance institutions 1 month
Item 16: work abroad lasting a month or more Before departure
Any change to a term No later than the day it takes effect

Three numbers carry most of the risk. Six months is the probation maximum, and on a fixed term it is half the contract length, so a three-month hire gets six weeks (ECA 1:4). Three hours a week averaged over four weeks is the only exemption from the statement (ECA 2:4(2)). And a fixed term without a justified reason becomes permanent automatically (ECA 1:3(5)), though since 1 June 2026 a first hire in five years, or a long-term unemployed person, needs no reason for up to a year.

Read more: Employment contract requirements in Finland — all sixteen items, the probation table, fixed-term grounds and the variable-hours review.

Which collective agreement binds you?

Probably one you never signed. If a generally binding agreement covers the work your employees do, you must apply at least its terms, whether or not you belong to any employers’ association (ECA 2:7).

Two things make this the most expensive mistake a growing company makes. It follows the work, not your registered line of business. And a term below the floor is void, not merely challengeable: the agreement’s rate replaces it automatically, and the employee’s consent does not repair it (ECA 2:7(2)).

The tech answer is not the obvious one:

Sector Generally binding? Decision
Retail trade Yes — about 70.6% 16/2022
Tourism and hospitality, employees and supervisors separately Yes, both 13/2010, 14/2010
Information technology service sector No — about 32.8% 6/2022
ICT sector, salaried and senior salaried Yes 5/2026, 19/2013

So software and consulting generally have no generally binding agreement; telecoms, network construction and contact centres do. Look it up in Finlex’s register. Open the record rather than trusting the index, because the index includes negative decisions too.

The exposure if you get it wrong: five years of back pay per employee while employment continues (ECA 13:9), plus waiting-time pay and interest.

Read more: Generally binding collective agreements in Finland — how yleissitovuus is confirmed, how to read a Finlex record, local agreements and the full back-pay picture.

How is working time regulated?

Eight hours a day, 40 a week, and every hour beyond that needs consent you ask for each time.

Rule Figure
Regular working time (WHA s. 5) 8 h/day, 40 h/week
Maximum including overtime (s. 18) 48 h/week averaged over 4 months
Daily overtime +50% first 2 h, +100% after (s. 20)
Sunday work +100%, plus overtime compensation if it is also overtime
Flexitime balances (s. 12) +60 / −20 h at the end of a 4-month period
Daily rest / weekly rest 11 h / 35 h (ss. 25, 27)

Two things catch employers most often. The separate overtime cap is gone: it disappeared with the 2019 Act and the transitional period ended on 31 December 2020, so the only limit is total working time. And a blanket overtime clause in the employment contract is not consent: section 17(1) requires it separately on each occasion.

Records are mandatory for everyone, with no white-collar exemption, and failing to keep them is a criminal offence rather than a fine (s. 32, s. 45).

Read more: Working time rules in Finland — the three averaging routes, all compensation rates, the working-time account, records and rest periods.

How does annual leave accrue, and how is holiday pay calculated?

Leave accrues on a 1 April – 31 March year, at 2 or 2.5 weekdays a month depending on how long the person has been with you, and Saturdays count as leave days.

Rule Figure
Accrual, employment under a year by 31 March 2 weekdays/month — 24 a year
Accrual, at least a year by 31 March 2.5 weekdays/month — 30 a year
Which accrual rule applies 14 days a month, or 35 hours where the contract gives fewer working days
Summer holiday At least 24 weekdays, between 2 May and 30 September
Notice of leave timing 1 month, or 2 weeks if a month is impossible
Holiday pay Before the leave begins, unless it is 6 days or fewer
Percentage method 9%, rising to 11.5% once employment has run a year by 31 March

There is no statutory third accrual tier: a 3-day rate comes from a collective agreement, not the Annual Holidays Act. And lomaraha is not statutory either: the Act contains no provision on it at all.

Read more: Employee time off and attendance policy in Finland, or run one person through the annual leave calculator.

Who pays for sick leave, and for how long?

You do, for the day they fall ill plus the next nine weekdays: full pay if they have worked for you a month or more, half pay if less (ECA 2:11). Kela takes over from there, and its waiting period is deliberately the same ten weekdays.

Period Who pays
Employment ≥ 1 month Day of illness + 9 weekdays You, full pay
Employment < 1 month Day of illness + 9 weekdays You, 50%
After that Up to 300 weekdays Kela

Three things go wrong repeatedly. Saturday counts: the Health Insurance Act’s weekday definition excludes only Sundays, church holidays and midweek public holidays, so a Monday start ends on the Thursday of the following week. Kela does not reimburse that first period, because it is its own waiting period. And the threshold is the duration of employment, not the end of probation.

Your collective agreement almost certainly makes the period longer, graded by tenure. One plus nine weekdays is a floor, not a budget.

Read more: Sick pay in Finland — the weekday arithmetic worked through, certificates, and what a collective agreement changes.

What are the recurring deadlines?

The same rhythm, every year, whether you have three employees or three hundred. Four clocks run:

When What Where
Spring 31 March closes the holiday credit year · 2 May – 30 September binds 24 weekdays of summer holiday · notify leave timing a month ahead · pay holiday pay before the leave starts Annual leave
Every four months Flexitime monitoring period closes · the 48-hour balancing period closes · working-time account year-cap checked Working time
On every hire 7 days for statement items 1–8 · 1 month for items 9–15 · variable-hours review at least every 12 months Employment contracts
On every long absence 1 month to notify occupational health care · 2 months to apply to Kela · joint assessment before 90 weekdays Sick pay

The year also holds payroll deadlines that come from outside these five acts: Incomes Register reports, withholding tax, and earnings-related pension and insurance contributions. Those are dated out in full in the Finland HR compliance calendar, which is the canonical source.

Beyond these five acts

Four more obligations arrive with the first hire and are covered separately:

How does Taito.ai help with this?

Almost none of the mistakes above come from not knowing the law. They come from not having the facts to hand: which collective agreement is recorded against whom, how many weekdays of this absence have already gone, how long this person has been employed, how much leave they have accrued. Those four facts decide the pay periods and the balances.

Taito.ai is a people operations system, not payroll and not legal advice. It will not track legislative changes for you and it will not tell you which collective agreement binds your company. What it does is the part a spreadsheet handles worst. Employment data, job and role structures, documents and signatures live in one versioned place. Working time and attendance are recorded person by person, absences to the day. Leave policies are rules that balances update against. So when an inspector asks which term applied to this employee and from what date, you answer without archaeology.

Start a free trial or see how Taito.ai works.

Frequently asked questions

Does an employment contract have to be in writing?
No. Under Chapter 1, section 3(1) of the Employment Contracts Act an employment contract may be made orally, in writing or electronically, and an oral contract binds exactly as a written one does. Written form is not a condition of validity. A separate and mandatory obligation is the written statement of the key terms of work under Chapter 2, section 4: it must always be given unless the terms appear in a written contract. So an orally agreed relationship immediately creates a written documentation duty, and the employer records the terms anyway. A sufficiently thorough written contract satisfies both obligations at once, which is why it is in practice the only sensible approach. The occupational safety and health authority is also entitled on request to a detailed account of contracts made orally, so agreeing orally only moves the paperwork to a worse moment. Failing to give the statement is punishable under Chapter 13, section 11.
How long can a probationary period be in a fixed-term employment contract?
Under Chapter 1, section 4(2) of the Employment Contracts Act, in a fixed-term employment relationship the probationary period may, extensions included, be no more than half the duration of the contract, and never more than six months. In a four-month contract it can therefore be at most two months, and in a three-month contract at most one and a half months. The general six- month maximum applies only to indefinite contracts and to sufficiently long fixed-term ones. Where an employee is hired by the user undertaking after an agency assignment for the same or similar duties, the time on assignment is deducted from the maximum. A probationary period must always be separately agreed; it does not arise from a template or a collective-agreement provision. If it rests on a provision of a collective agreement binding on the employer, its application must be notified when the contract is concluded. The period starts when work starts, not at signature.
Does a generally binding collective agreement bind a company that belongs to no employers association?
Yes. Chapter 2, section 7(1) of the Employment Contracts Act obliges the employer to observe at least the provisions of a nationwide collective agreement regarded as representative in the sector, on those terms of employment and working conditions that concern the work the employee performs or work most closely comparable to it. The obligation does not depend on membership: securing minimum terms for the employees of non-organised employers is the whole purpose of the system, as government bill 157/2000 states. In practice the pay tables, working-time provisions and supplements apply without the company ever having signed or read anything. Nor is the Trade Register line of business decisive; what matters is the work the employee actually does. General applicability brings only substantive minimum terms: it does not make the employer a party, so the industrial-peace obligation and compensatory fine under the Collective Agreements Act 436/1946 do not apply. Liability materialises as a civil pay claim.
How can I reliably check whether my sector collective agreement is generally binding?
Confirmed generally binding collective agreements and the decisions of the confirming board are published in Finlex's collective agreements register, under Viranomaiset, browsable by year or alphabetically. Do not infer general applicability from appearing on the list: the alphabetical index covers all confirmation decisions and therefore includes negative ones. Always open the record itself and read the general-applicability field, which states either that the agreement is generally binding or that it is not. Another reliable indicator is the Documents section: agreements lacking general applicability are not published at all, so a negative record has no PDF attached. The record also shows the decision number and date, the parties, the entry-into-force and expiry dates, and the reasoning, from which you can see how representativeness was calculated. Finally, the year of the decision says nothing about currency. A new decision issues only when the agreement can no longer be regarded as the same one, so a 2010 decision can validly govern a 2025–2028 agreement.
What is the maximum working time now that the old overtime cap is gone?
The old Working Hours Act had a separate maximum for overtime, but it disappeared with the Working Hours Act 872/2019 on 1 January 2020, and a transitional provision allowed it only until 31 December 2020. The current limit is in section 18: an employee's working time, overtime included, may not exceed an average of 48 hours a week over a four-month period. The occupational safety and health administration stresses that the restriction is directed at total working time, not merely at the maximum number of overtime hours: regular working time, additional work and overtime are added together. The provision is mandatory, so the maximum cannot be departed from by any agreement. A nationwide collective agreement may extend the balancing period to six months, or for technical or work-organisation reasons to 12 months. Motor vehicle drivers have a further absolute cap of 60 hours per calendar week. Breaching the maximum is a working hours violation punishable by a fine.
May an employer order overtime unilaterally?
No. Section 17(1) of the Working Hours Act requires the employee to give consent to overtime separately on each occasion. Consent may be given for a specified short period at a time, but only where this is necessary for the arrangement of the work: a permanent, open-ended overtime consent cannot be agreed in the employment contract. Additional work is different: it may be required with the employee's consent, and that consent can be agreed in the contract. Even then the employee may refuse additional work, for a justified personal reason, on days off entered in the shift roster. Two exceptions exist: emergency work under section 19, and the duty of public officials where the work is unavoidable for extremely compelling reasons. In practice overtime consent has to be documented case by case. Note also that overtime always requires the employer's initiative, so an employee's own decision to work on does not create it.
Does an employee accrue 2 or 2.5 weekdays of leave a month?
Accrual is 2.5 weekdays for each full holiday credit month, but 2 weekdays where the employment relationship has, by the end of the holiday credit year on 31 March, continued without interruption for less than a year. This is laid down in section 5(1) of the Annual Holidays Act. In practice the first accrual period produces at most 24 weekdays, four weeks, and after that 30 weekdays, five weeks. The boundary is the turn of the holiday credit year, not the employee's own anniversary: someone who started in August has been with the company for less than a year on 31 March, so the whole first period accrues at the two-day rate even if the year is completed in July. A fraction of a day is always rounded up in the employee's favour. Calendar-year leave tracking breaks this rule systematically, because it puts the boundary at 31 December.
Is lomaraha a statutory benefit?
No. The Annual Holidays Act 162/2005 contains no provision at all on lomaraha or lomaltapaluuraha. The monetary benefits in the Act are annual holiday pay (sections 9–15), lomakorvaus or holiday compensation (sections 16–19), the compensation for additional days off in section 7 a, and the pay for saved leave in section 27. The occupational safety and health authority says this outright: lomaraha is not based on the Annual Holidays Act but is a supplement agreed in collective agreements, for example 50 per cent of holiday pay, usually paid with the summer holiday. That 50 per cent is a collective-agreement term, not an amount derived from the Act, and it typically carries sector-specific conditions such as a duty to return to work afterwards. If no collective agreement binds the company and no lomaraha has been agreed or become established practice, there is none. Section 29 does require a calculation of holiday pay and annual leave records.
Does Saturday count towards the nine weekdays of sick pay?
Yes. The sick-pay period is measured in weekdays, and a weekday does not mean a five-day Monday to Friday week. Under Chapter 1, section 4(5) of the Health Insurance Act, weekdays are days other than Sundays, church holidays and midweek public holidays, so Saturday is a weekday and consumes the period. The occupational safety and health administration confirms that public holidays are not counted among weekdays. In practice an incapacity for work starting on a Monday produces a ten-weekday window ending on the Thursday of the following week: Monday to Saturday is six weekdays and Monday to Thursday is four. Pay is paid for the days that would have been the employee's working days within it. A payroll system treating a weekday as Monday to Friday ends the period a day too early and underpays; one counting calendar days ends it too late. The same concept runs on the Kela side.
Can the employer collect Kela allowance for the period it paid sick pay?
Not automatically. Under Chapter 2, section 11 of the Employment Contracts Act, having paid sick pay the employer has the right for the corresponding period to receive the allowance due to the employee, but at most an amount corresponding to the pay it has paid. Chapter 7, section 4 of the Health Insurance Act adds a further condition: the allowance is paid to the employer only to the extent that the terms of the employment relationship provide for it to be paid to the employer instead of the insured person. If the contract and the collective agreement are silent, Kela pays the employee. Two things are worth checking: that the contract template contains such a term, and that the application is made in time. In practice the right concerns only the period extended by a collective agreement, because the statutory day of falling ill and the nine weekdays fall inside the Kela waiting period.

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