A 'posted worker' means a worker who is posted in Finland by an employer established in another country.
Posted employees can work in Finland under the following circumstances:
the worker is posted to perform work on behalf of the undertaking under a (sub)contract concluded between the employer and the user of the services operating in Finland.
the worker is leased out to a user undertaking and the employer is a temporary employment undertaking or placement agency.
the worker is posted to work for an establishment or undertaking owned by the group of undertakings concerned.
The posted worker must remain employed with the sending undertaking (a foreign service provider) throughout the posting; otherwise this does not constitute posted worker status.
In certain respects, the sending undertaking must comply with the employment terms related to wages, working hours and annual holidays as provided in the Finnish labour legislation and collective labour agreements, should these be more favourable to the posted worker than the employment terms provided in legislation that would otherwise be applied to him/her.
The sending undertaking must have a representative in Finland
If the employer (sending undertaking) of the posted worker does not have a business location in Finland, it must have a representative in Finland. The task of the representative is to act on behalf of the sending undertaking in court and to receive summons and other official documents on its behalf.
A representative need not be selected if the posting of the worker is no more than 14 days in duration.
Hiring a posted employee and employment terms
As regards posted employees, Finnish employment legislation is applied to a great extent, and the same employment terms and occupational safety requirements apply to them as to other employees (see the Posted Workers Act, in Finnish).
At the minimum, a foreign employer must pay a posted worker minimum wages in accordance with the applicable collective labour agreement. The same rules are applied to leased-out posted workers as to Finnish leased workers. If there is no collective labour agreement in the field in question, a posted worker must be paid customary and reasonable wages if the compensation for the work agreed upon between the foreign employer and the worker is significantly lower than this.
Further information on posted workers and the legislation applicable to them is available on the websites of the Occupational Safety and Health Administration and the TE Office.
A company using a leased employee is under obligation to verify its contracting partner’s ability to discharge its statutory obligations
The purpose of the contractor’s obligation to check is to give the contractor information that is as accurate as possible on whether the contracting party is reliable and whether they intend to act in compliance with legislation.
The obligation to check is related to whether the contracting party has discharged its registration, insurance and tax obligations properly. In addition, the contractor must request an account of the applicable collective agreement or the principal terms applicable to the work of the leased employee from the contracting party. The obligation to check does not apply if the total duration of the work for which a leased employee is hired does not exceed ten working days or if the value of the contract, excluding VAT, is less than EUR 7,500.
The obligations of an employer under the Aliens Act apply to a client
If the workers employed by a foreign employer are working under a contract or subcontract or as leased employees, the obligations of an employer referred to in the Aliens Act are applied to the client operating in Finland. The client's responsibility applies to the information included in the worker’s residence permit application.
In addition, the client must make sure that the foreign employee has an employee’s residence permit or that he/she does not require a residence permit. The client must also submit an account of the foreign employee’s employment terms to the TE Office and inform the shop stewards at the workplace of the name of the foreign employee and the applicable collective labour agreement.
Details on the company leasing the employee and the company’s representative must be submitted to the Tax Administration
Anyone who has work done by a leased employee must submit details on the company leasing the employee to the Tax Administration, unless an international treaty prevents collecting income tax on the wages of the employee. In addition, the Tax Administration must be informed of the above-mentioned company representative. The information must be submitted by the end of the month following the calendar month during which the first leased employee commences work for the ordering party.
Social security and insurance
Workers posted from the EU/EEA area, Switzerland and certain social security agreement countries (Australia, Chile, Canada and the United States) are covered by social security in their home countries and are not subject to insurance in Finland. If you receive a worker from an EU/EEA country or Switzerland, make sure that he/she has Certificate A1 (formerly E101) for a posted worker with him/her as verification of social security coverage in the sending country. Equivalently, those arriving from social security agreement countries must hold a certificate for a posted worker compliant with the social security agreement.
If a worker has been sent from outside the EU/EEA area (and not from a social security agreement country), the Finnish social security legislation applies to him/her. If the duration of the work period is two years at most, the occupational pension insurance legislation provides for the possible exemption of a foreign employer from the occupational pension insurance obligation. For employment of five years at most, an employer may apply for an exemption from the obligation to take out insurance from the Finnish Centre for Pensions. Kela, in turn, decides which housing-based social security benefits a worker in Finland receives.
Accident insurance differs from the above in certain respects. For example, accident insurance policies do not involve the two-year rule for workers sent from outside the EU/EEA area applicable to the occupational pension insurance legislation; instead, workers must be insured from the beginning of the employment period in Finland, in accordance with the Accident Insurance Act. This also applies to posted workers arriving from most social security agreement countries, as the social security agreements do not always incorporate provisions on accident insurance. If your company has work done by a posted worker, it is important for you to make sure that the worker has insurance coverage for occupational accidents and diseases.
Further information on the social security and insurance coverage of posted workers is available on the websites of the Social Insurance Institution of Finland (Kela), Finnish Centre for Pensions and Federation of Accident Insurance Institutions (FAII), for example.