HR Solutions & Employee Relations in Finland with IRIS  

IRIS HR Consulting has experience helping businesses grow in Finland. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can manage your HR in Finland to help businesses hire, recruit, and pay staff overseas in new, unfamiliar countries. As a popular destination for businesses, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace.  

Take your business to Finland with IRIS HR Consultancy.

HR in Finland

Global expansion in Finland   

Not only is Finland one of the largest (by area) countries in Europe and its capital, Helsinki, is generally relished for being a transportation hub. Its key industries range from telecoms and electronics, through to engineering – exports is one of the country’s wealthiest assets.  

Finland is affiliated with a productive and celebrated educational system, a robust healthcare, and a general trustworthiness (owed to low corruption) that sets in up favourably for mobile and global businesses. Particular success in technology has created an attractive reputation for the country, one associated with innovation and transformation.  

As a people-centric nation, Finland scores competitively on multiple global indexes for personal freedoms, safety, happiness, stability and equality. As an advanced Nordic culture, the talent and labour are often known for being well-educated and extremely valuable. This is, in part, owed to a stable, effective and productive infrastructure and political system.  

Nordic Welfare Estate  

Finnish culture is reliably designed around the Nordic welfare model. This is associated with high taxation, a strong range of public services, and dependable social security. This scheme acts as a financial backbone for the country, with extensive and comprehensive coverage of key entitlements that range from healthcare access to pension and unemployment benefits.  

As part of its inventive welfare program, Finland’s benefits guarantee universal healthcare and secures a strong, basic education for citizens. It also extends to public services, including transport and other key pieces of internal infrastructure.  

Establishing your business in Finland   

Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate.  

Before entering the Finnish market, you will need honor labor regulations, which have tightened over the years in and around Europe. Establishing a business in Finland will require local knowledge – everything from selecting a favourable location, to registering your business and notifying the appropriate Trade Register and Tax Administration registers.  

Complying with these procedures can be easier when you partner with IRIS HR consultants – we can help you reach Finnish markets.  

Employment laws in Finland  

When first expanding your business into Finland, navigating local laws, legislation and rules of employment laws is no easy feat. Throughout Europe, these laws are almost never universal. Rather, employment is dynamic and reflects the country social, economic, cultural opportunities.  

For example, it’s common for employment rights to be captured and negotiated in collective bargaining agreements, whereby the country’s top trade unions are often key in establishing expectations for working hours, salaries, and benefits.    

Did you know?

There is estimated to be around 100 trade unions, which are under three central organisations. Membership to trade unions covers 80% of the working population.  

HR in Helsinki

Employment rights & contracts in Finland    

Despite the prevalence of collective bargaining agreements, employment should be shored up in the form of a straight-forward contract.  

The terms formally captured in any contract, includes:  

  • Compensation  
  • Key employment benefits 
  • Termination rules and guidance  

It’s common for a formal employment contract to be supplemented with an offer letter, whereby both must contain the actual salaried amount for the role and value of any compensation in Euros. Other foreign currencies are not often used during employment documentation.  

The professional relationship between employee and employer is governed by the Employment Contracts Act, which outlines the fundamentals of any employment agreements, covering contracts, direction, and renumeration. When formalising employment, employers should be mindful that their relationships are honourable to these guidelines.   

Hiring & recruitment in Finland   

When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer and thereafter – including before, during and after the commencement of an employment contract. 

Equal Opportunities in Finland  

According to Finnish law, equality is enforced in employment, including working conditions and remuneration.  

What are the working hours in Finland?  

As per strict labour protections, working hours are monitored and carefully regulated in accordance with the Working Hours Act.  This permits a standard working day that is reasonable – with hours measured against compensation.  

This Act has established a framework for working in Finland. Working hours are set a threshold of 8 hours daily, or 40 hours per week. Typically, many businesses run operations set at working hours between 7.5 hours daily or 37.5 hours per week.  

Additional Work and Overtime in Finland  

Any time spent working in excess of the basic working hours, as defined by the Working Hours Act, should be reached through consent as a prerequisite. Overtime is also negotiated based on an employee’s voluntariness.  

Overtime is paid at a scaling rate of 50% covering the first two hours of daily overtime, and 100% thereafter. For weekly compensation, this looks like 50% against an employee’s regular wage.  

Where working time is requested by the employer, but not in excess of the statutory maximum threshold, then this is considered ‘additional work’ rather than overtime.  

Sick Leave in Finland   

Employees are governed by agreements under collective bargaining terms, including contractual benefits, which will typically offer sick leave coverage. The value of pay for sick leave can be calculated against the length of an employee’s service.  

After a month of service, an employee is entitled to a benefit of full pay (lasting nine days), where those serving under this amount can receive a rate of 50% of their pay.  

Maternity Leave in Finland  

Paternal leave offers paid absence for male and female employees; combined maternity, paternity and paternal leave reaches 317 days of total paid absence. Where this benefit covers roughly the first year of infancy of a child, the maternity leave entitle specifically covers 105 working days. Paternity leave, however, lasts for up to 54 days.  

This benefit is typically jointly paid for by employees (cover a month) and the Finnish social welfare estate.  

Public Holidays in Finland

Under Parliament, the official holidays in Finland include:  

  • New Year’s Day 
  • Epiphany 
  • Good Friday 
  • Easter Monday 
  • Labor Monday 
  • Ascension Day 
  • Pentecost 
  • Midsummer Day 
  • All Saints’ Day 
  • Independence Day (non-Christian holiday) 
  • Christmas 
  • Stephen’s Day 

Neither Christmas Eve nor Midsummer Eve are official holidays yet are locally celebrated as key dates in the calendar. These are, culturally, not considered working days, despite some shops still operating on flexible hours, yet most contracts provide these as paid leave.  

Vacation or Annual Leave 

Annual vacation time is earned and accrued during working months, known as ‘leave-earning’, or where wage earners fulfil a least 14 days of work (or 35 hours).  

This accrues at the rate of the following, unless adjusted or extended under a collective bargaining agreement:  

  • An employee is entitled to 2 days of leave for every working month (for any employment under a year).  
  • The rate increases to two and a half days for employment beyond a year of a service.  

Employees will, typically, use annual paid leave between the months of May and September. Agreements must be made between employee and employers regarding the particulars of a leave period, including commencement of a vacation entitlement and for how long it will last.  

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End of Service 

HR in Finland requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages. Or, for globally mobile companies with teams in foreign markets, this could be repatriation services for those returning from an assignment overseas.  

For these more complicated matters, you will need expert HR guidance to navigate Finnish labor laws and remain compliant.  

Working in Finland

Termination (including Severance) in Finland  

A standard rule for probation allows for a 6-month period where performance can be monitored, and employment can be concluded at any point.  

In the scenario of termination, an employer should provide reasonable grounds for the dismissal, whether performance-related or financial. Outside of this scope, the policy on notice periods is quite flexible and can be shortened if agreed up with the employee. This notice will typically run anywhere between 14 days and a month, depending on length of service.  

Retirement & pensions in Finland  

There are two compulsory categories of pension:  

  • The National Pension (public plan) 
  • Occupational pension schemes  

It’s uncommon for a private program for pension to develop as the compulsory schemes dominate retirement planning, with the National Pension operating as a reassurance that workers will accrue a reasonable pension benefit. Yet, this scheme is residents, or available to those inhabiting Finland after 3 or more years.  

The statutory wage-based program establishes the major force behind retirement planning across Finland. This is operated as part pay-as-you-go and through funding from employers.  

Social Security

The Social security benefits in Finland are extensive in what they cover, where funding is secured by contributions from both the employee and employer (known as ‘social security payments’). 

The program is divided into two sections: 

  • residence-based social security; 
  • employment-based earnings related social security. 

Residence-based social security is funded from tax and administered by Kela (the Social Insurance Institute), whereas earnings-based schemes are operated by contributions to private insurance companies and pension funds and administered by the Finnish Centre for Pensions. 

The coverage has scope for the following:  

  • Incapacity to work 
  • Old age pension and support  
  • Illness 
  • Unemployment  
  • Childbirth 
  • Death of the family breadwinner 
  • Rehabilitation  
  • Studies 

Supplemental benefits

Basic Health Coverage

Those covered under the National Health Insurance (NHI) scheme of Finland are permitted a personal health insurance card, known as the ‘Kela Card’. This enables reimbursements for certain healthcare goods, products and services.  

Occupational Healthcare  

Employers must offer Occupational Healthcare. This is operated through a partnership with local nurses or healthcare practitioners, with expenses claimable through Kela.  

Unemployment Allowance  

Unemployment Allowance is paid either from the Unemployment Fund (if the individual is a member) or as a basic unemployment allowance from Kela. 

Workers Compensation insurance  

Workers Compensation Insurance is a mandatory accident insurance for all Employees (where the salary exceeds Eur 1.300,00 per year).  

Employment in Helsinki

Why Partner With IRIS?

When entering new, exciting countries in Europe, like Finland, you will need an employment specialist to navigate the parts of local laws that are mandatory and those that are not. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us.  

Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully compliant solution, IRIS can help businesses reach Europe, especially when they build bridges in Finland.  

Our cost-effective, knowledgeable approach to HR in Finland makes us an ideal partner to commence your overseas plans.