New legislation on posted workers came into force in June

The Finnish Act on Posted Workers (447/2016) came into force 18th of June 2016 replacing the old posted workers act from 1999. With this new legislation the implementation of the posted workers directive was completed. This new legislation aims at enhancing surveillance and ensuring that companies that post workers comply with the Finnish employment regulation even better than before. The new act regulates questions such as the minimum employment terms and conditions, the obligations of the posting company and the client company and the consequences of breaching the legislation. The most significant changes have to do with the electrical reporting duty of companies and the authority of Finnish employment officials to impose negligence fines to those that breach the new regulation.

Unlike the old act, the new act will also be applicable in public procurements. The terms and conditions applicable to posted workers will remain as before and the company that is posting workers will still have to have a representative in Finland. The client company has a duty to assist the labor protection officials if they cannot reach the representative of the company that posts workers. In the construction trade the client and the main contractor have a special obligation to determine the wages of a posted worker if the worker claims, that he or she has not been paid the minimum wage set in appropriate legislation.

The most significant reform concerns the procedure of reporting when workers are posted. As a new obligation, the companies that post workers in Finland have to file a notification to the labor protection officials before the employers commence work. The idea behind this reporting duty is to improve the allocation of surveillance. The new act includes a comprehensive list of information that has to be included when reporting to the labor protection officials. The client company operating in Finland has a duty to ensure for example via emails or as a term in a contract that the company that is posting the workers is fulfilling its reporting duty. There will be separate legislation on the reporting duty that is expected to be in force in 2017.

The sanction system of posted workers regulation was completely renewed. The earlier criminal liability system was replaced with regulation of administrative fines. In the future, the companies that breach the regulation when posting workers can face a negligence fine of 1000 – 10 000 euros. The officials can impose this fine for example if the company that is posting the workers has not fulfilled its reporting duty or the report does not include all of the required information or if the company does not have a representative in Finland. The client company receiving the posted workers can face the negligence fine for example when it does not assist the officials in finding the representative of the posting company. The negligence fine stipulated by Finnish officials can also be enacted in other EU countries.

The Act on Posted Workers (in finnish):