Finland PEO & Employer of Record Services
Global PEO Services (GPS) helps companies hire employees in Finland without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Finland, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Finland labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Finland. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Finland - Country Overview
Finland, a sovereign state in Northern Europe shares border with Norway to the North, Russia to the East, and Sweden to the Northwest. Trade is important to Finland’s highly industrialized, free-market economy with exports accounting for more than one-third of GDP in recent years. Its competitive manufacturing industry produces high-quality wood, engineering, telecommunications, and electronic products and equipment.
World Economic Forum’s The Europe 2020 Competitiveness Index has declared Finland as the most competitive country in Europe.
Finland excels in exporting technology for mobile phones and promotes startups in the gaming, information technology, and biotechnology sectors. Its efficient business framework drives productivity and innovation. The country’s economy is expected to grow from 239.77 USD Billion in 2019 to 270.00 USD Billion in 2020.
Parliamentary Representative Democratic Republic
Helsinki, Tampere, Turku, Oulu, Jyväskylä
Employment Contracts in Finland
Employment contracts can either be fixed- or indefinite term.
Fixed-term contracts are issued for:
- Seasonal work
- Substitute work
- Fixed-term projects
- One-time work
Employers must provide employees a written document with detailed employment terms before their first salary period ends. This document must contain the following information:
- The time when the work begins
- The duration of any temporary contract and the reason why it is temporary
- The length of any trial period
- The place of work
- The main duties of employees
- The collective agreement that applies to the work
- The basis for determining the pay and the payment period
- The regular working hours
- The manner of determining annual vacation
- The notice period in case of termination of the contract and the basis for calculating this period
Employers and employees can agree that the work begins with a probationary period. The maximum probationary period is 4 months.
Working Hours in Finland
Regular work schedule is 8 hours per day and 40 hours per week, and weekly working hours can be averaged over a period of no more than 52 weeks. Employees can take rest for at least 30 minutes if the daily work hours exceed 6 hours. Employees are also entitled to a continuous rest period of minimum 11 hours between shifts and at least 9 hours for periodic work.
Employers are required to provide a continuous rest period of a maximum of 35 hours each week to employees. The weekly rest period can be scheduled over 2 weeks if the time off each week is not less than 24 hours.
Employee Leave in Finland
Employees are entitled to the following paid public holidays:
- Easter Saturday
- First of May
- Midsummer’s Eve
- Independence Day
- Christmas Eve
Collective bargaining agreements generally contain provisions on other holidays with full salary entitlements such as New Year’s Day, Good Friday, 12th Day, Easter Monday and Ascension Day. Employees who work on a public holiday are entitled to double pay.
Pregnant employees are entitled to 105 days of maternity leave that can start 30 to 50 days before the expected date of birth. Though Finnish law doesn’t require employers to pay salaries to pregnant employees during maternity leave, this obligation is generally specified in the collective agreement.
Fathers are entitled to a maximum of 54 days of paternity leave along with the parental allowance. Both the parents can take a maximum of 18 days from these days to stay at home. The paternity leave can either be paid or unpaid, and if unpaid, the Social Insurance Institution pays for the paternity leave.
Employees are entitled to 9 days of sick leave with full pay each year and with 50% pay if working for less than 1 month. Following this period, the Finnish National Pension Institute pays employees a daily allowance for illness at 70% of regular wages.
Parental leave for a maximum of 158 days can be taken following maternity leave either by the father or the mother or be divided between them. Even part-time parental leave is also available.
Child Care Leave
Under the Employment Contracts Act, employees can take child care leave after parental leave until the child reaches the age of 3. A child care benefit is paid by the Social Insurance Institution to families that choose not to enroll their child in municipal day care. The parents of small children can take temporary child care leave of 4 days in case the child gets ill suddenly, and can also request for shortened work hours until the child goes to school.
Employee Benefits in Finland
Employees can choose to retire on old-age pension between the ages of 63 and 68, and can accrue higher pension if they continue to work longer. The pension is accrued at 1.5% of the annual income but the rate increases with age. For employees between the ages of 53 and 62, the pension is accrued at 1.9%, and at 4.5% for those between the ages of 63 and 68.
Employees working part-time continue receiving the part-time pension to compensate for the associated lost earnings. Employees aged between 60 and 67 can also choose for part-time retirement.
Employees who suffer from a disorder, illness, or handicap that restricts their capacity to work and is likely to continue for at least 1 year, are paid disability pension. Employees whose incapacity to work is assessed as temporary qualify for rehabilitation benefits.
Employees are required, under the Employment Accident Insurance Act, to cover their employees against occupational injuries and diseases. Employees are covered by workers’ compensation in the following set of conditions:
- At work
- When on work-related business (in Finland or abroad); on the way to or from work
- When conducting a work-related assignment ordered by the employer
- In circumstances created due to work at the workplace or an area belonging to or outside it
- When attempting to save or protect the employer’s property or human life in connection to their work