The Reform of the Act on the Contractor’s Obligations and Liability is Planned to Enter into Force on the 1st of September 2015

In March, The Finnish parliament approved amendments to the Act on the Contractor’s Obligations and Liability when Work is Contracted Out. The reform will likely be effective from the first of September. The exact date will be confirmed when the law is ratified.

The reformed Act will apply to subcontracts which value exceeds EUR 9,000 (excluding VAT), whereas the current threshold is EUR 7,500 (excluding VAT). Moreover, contractor’s obligation will be extended to obtain information of the contracting partners’ occupational health care. Before the initiation of agreed work, the contractors need as well to gain information of the social security status of the posted workers. However, the reform will bring also certain facilitations to the contractor’s information retrieval process. For example, contractors are entitled to take advance of the public tax debt register in retrieving the contracting partner’s tax debt information.

The reform will affect also the threshold of the negligence fee. The minimum amount of the negligence fee is increased to EUR 2,000 and the maximum amount is increased to EUR 20,000. Moreover, one remarkable change in the renewed Act is that the raised negligence fee is going to affect all the industries that fall in the scope of the Act. The raised negligence fee minimum is EUR 20,000, while the maximum is EUR 65,000.