Legal Alert – Upcoming Changes to Employers’ Obligations When Posting Employees to Finland
The Finnish government has recently proposed that the Posted Workers Act be replaced with a new act that will tentatively enter into force on 18 June 2016. The changes introduced by the upcoming act would affect companies that assign employees to temporarily work in Finland. Some new obligations would also be imposed upon companies using such posted workforce.
Most importantly, if the government bill is passed, all companies posting employees to Finland must notify the authorities of using posted workforce before the work commences. As before, the posting company must select a representative in Finland if the company has no business location here. However, from now on, the company using posted workforce would be under an obligation to help the authorities to reach such representative.
The proposed act also introduces the concept of administrative penalty payments. A penalty payment of EUR 1,000-10,000 could in future be imposed upon a posting company that neglects its obligation to inform the authorities of posting employees to Finland, make available certain information concerning the assignment or select a local representative. In addition, such penalty payment could be imposed upon a user company that fails to assist the authorities in reaching the posting company’s local representative.
Unlike before, the new act would also apply to work performed under a procurement contract concluded by a public central government authority. Further, a contractor engaged in building work would have the obligation to investigate, upon request by the worker, whether an applicable minimum salary has been duly paid to the posted worker.
The Posted Workers Act is applied when a worker who normally carries out their work outside of Finland is posted to Finland for a limited period of time to work for the employer’s contracting party or a group company or as an agency worker. The legislation determines, among others, the minimum terms and conditions applied during the assignment, including minimum salaries.