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In a world where more and more businesses are going global, it’s crucial to have a remote workforce to help you stay competitive. And when it comes to finding the best place to outsource your remote employees, there’s no better choice than Finland.
First, the Finnish education system is one of the best in the world. This means that you can find highly skilled workers in Finland who are ready and able to take on your business challenges. Finnish workers are also known for their strong work ethic. You can trust that your remote employees from Finland will be diligent and dedicated to their work.
And finally, the quality of life in Finland is high. Your remote employees will be happy and productive in their work if they live in a country with a high quality of life. And since Finland ranks consistently high on quality of life measures, you can be sure your employees will be happy here.
Native Teams’ Employer of Record services help you hire and pay your team through an owned infrastructure in Finland. We handle everything from legal employment to ensuring your team is paid and managed compliantly and with care, without any third parties involved.
Hire your first Finnish employee with Native Teams.
This section will cover the rules and regulations that employers need to follow when hiring new employees in Finland.
Finnish employment law is based on a comprehensive legislative framework that sets out the rights and obligations of both employers and employees. Three key laws govern the employment relationship:
The Finnish Employment Contracts Act recognises several types of employment contracts, each suited to different employment situations.
Permanent employment contracts (Toistaiseksi voimassa oleva työsopimus) are the most common type of employment contract in Finland. They are open-ended and continue until either the employer or the employee terminates the employment relationship.
They can only be terminated for just cause and require the parties to follow the applicable statutory notice periods.
Fixed-term employment contracts (Määräaikainen työsopimus) are used when employment is not intended to be permanent. They are typically appropriate for situations such as project-based work, seasonal work, and covering for an employee who is on leave.
A fixed-term contract must have a clear and justified reason for its temporary nature. It must also specify the end date or event that will bring the employment relationship to an end.
Finnish law prohibits employers from using successive fixed-term contracts to circumvent the employment protections that apply to permanent contracts.
A written contract should cover:
Download a free employment contract in Finland through Native Teams.
In Finland, employment contracts can be made orally, in writing or electronically. All three forms are legally valid under the Employment Contracts Act. However, written contracts are strongly recommended because they provide a clear record of the agreed terms and can help prevent misunderstandings and disputes.
An oral employment contract is legally binding once both parties have agreed on the essential terms of employment, such as the nature of the work, salary and working hours.
Although oral contracts are legally permitted, they are therefore not advisable, particularly for complex employment relationships where there may be numerous terms and conditions to agree.
Written employment contracts provide the clearest record of the employment terms agreed by the employer and employee.
If an employment contract is not made in writing, the employer must provide the employee with a written statement of the key terms of employment within one month of the start of employment.
Under the Working Hours Act, regular working hours are generally limited to 8 hours per day or 40 hours per week.
Collective agreements may provide for shorter working hours. For example, the IT service sector collective agreement sets standard working hours at 7.5 hours per day and 37.5 hours per week.
Working-time arrangements may vary depending on the nature of the work or the applicable collective agreement. However, total working time, including overtime, must not exceed an average of 48 hours per week over a four-month reference period.
A collective agreement may extend the reference period to six months or, for technical or practical reasons, to 12 months.
Finnish law distinguishes between two forms of flexible working arrangements.
Flexible working hours (liukuva työaika) allow employees to adjust the start and end of their working day within an agreed framework. The employee has a fixed core period during which they must be present and a daily flexibility margin of up to four hours.
Flexible working time arrangements (joustava työaika) give employees greater control over when and where they work. Employees independently determine the timing and location of at least half of their working hours, with no fixed core hours.
Both types of flexible working arrangements must be agreed in writing. In both cases, the mandatory 48-hour average weekly maximum continues to apply.
Night work is defined as work performed between 11 pm and 6 am. In the IT sector, night work may be required for activities such as system maintenance, server updates and providing round-the-clock technical support to global clients.
Employees who work at night are entitled to a higher hourly wage or compensatory time off.
Employers must organise night shifts in a way that provides employees with adequate rest and does not jeopardise their health. Employees working night shifts are entitled to:
Night work can present specific health and safety challenges. Potential risks associated with irregular working hours include sleep disorders, cardiovascular diseases and increased stress levels.
Employers must take these risks into account when organising work schedules and conduct regular health assessments for employees who work night shifts.
Under the Working Hours Act, employees must receive adequate breaks during the working day to rest and eat.
If an employee's working time exceeds six hours, they are entitled to a meal break of at least 30 minutes. This break is typically unpaid, and the employee must be allowed to leave their workplace during the break.
Where the nature of the work does not allow for a continuous 30-minute meal break, such as in continuous operations, the employer must ensure that the employee can take shorter breaks that together total at least 30 minutes during the working day.
Employees accrue annual leave for each full month of employment:
A full month of employment is a month in which the employee has worked for at least 14 days or 35 hours.
An employee's salary is generally determined based on their qualifications, experience and the requirements of the role. In Finland, collective agreements often establish minimum salary levels for different job categories and competence levels.
Unlike many countries, Finland does not have a national statutory minimum wage. Instead, minimum wage levels are generally determined through collective agreements for individual sectors.
In the IT sector, the IT service sector collective agreement provides a detailed task category scheme with corresponding minimum salaries. It covers roles ranging from entry-level positions to senior management. These salary levels are regularly reviewed and adjusted to reflect changes in the industry, inflation and economic conditions.
In addition to basic salary, Finnish law and applicable collective agreements may provide for various wage supplements and bonuses.
To calculate the salary and taxes in Finland, click here.
Employees in Finland are entitled to sick leave when they are unable to work due to illness or injury. The entitlement begins when the illness occurs, and employees are generally required to inform their employer as soon as possible.
In most cases, a medical certificate is required if the illness lasts for more than three days, although some employers may require a certificate from the first day of absence.
An employer is required to pay an employee's salary during illness where:
The duration of paid sick leave depends on the employee's length of service:
Parental leave lasts for 158 working days and may be taken by either parent or divided between both parents. During parental leave, the parent receives a parental allowance from Kela, which is based on their earnings.
In the IT sector, where flexible working arrangements are common, parents may also be able to agree on arrangements that combine parental leave with part-time or remote work, allowing them to maintain their career while caring for their child.
Employees in Finland have the right to take leave from work due to pregnancy, childbirth or childcare and may receive benefits under the Health Insurance Act.
Maternity leave typically begins 30 to 50 days before the expected date of birth and continues for 105 working days after the birth. During this period, the mother is entitled to a maternity allowance from the Social Insurance Institution of Finland (Kela), calculated based on her earnings.
In the IT sector, employers may provide additional benefits during maternity leave, such as supplementary maternity pay or extended leave options. Some employers may also offer flexible working arrangements when mothers return to work.
Fathers are entitled to 54 working days of paternity leave. The leave can be taken in up to two separate periods during the child's first two years. During this leave, the father may receive a paternity allowance from Kela, calculated based on his earnings.
The rules differ depending on whether the employment contract is indefinite or fixed-term.
Reasons for dismissal are divided into two categories: grounds relating to the individual employee's person (dismissal) and financial/production-related grounds (redundancy). The employment relationship only ends after the corresponding notice period has been observed.
A personal ground for dismissal must be a serious breach or neglect of duties with an essential impact on the employment, or a significant, long-term change in the employee's ability to cope with the work.
For redundancy, the work offered must have diminished substantially and permanently due to financial reasons or reorganisation. Crucially, the employer must always fulfil their re-assignment obligation by finding out if the employee can be placed in other suitable work or reasonably trained for new duties.
When an employer dismisses an employee on an indefinite contract, they must observe the applicable statutory notice period. The length of the notice period is primarily based on the employee's uninterrupted length of service.
The statutory notice period ranges from 14 days for employment of up to one year to a maximum of six months for employment of more than 12 years.
Applicable collective agreements, including the IT service sector collective agreement, and individual employment contracts may provide for longer notice periods, but the maximum notice period is six months.
An employee may challenge a dismissal if they believe the employer did not have lawful grounds for termination or failed to follow the required procedure. If the employer does not comply with the required notice period, they must pay the employee full wages for the period of notice that was not observed.
Where a dismissal is found to be unlawful, the employee's primary remedy is compensation (damages). The employee cannot legally require reinstatement to their position.
Unemployed jobseekers in Finland have the right to public employment services and unemployment security, provided they actively fulfil their work-seeking obligations and comply with their agreed employment plan.
A person who becomes unemployed in Finland must immediately register as a jobseeker with the Employment Services of their municipality to be eligible for unemployment benefits. Registration establishes their status as a jobseeker, which is a prerequisite for receiving financial support.
In return for receiving unemployment benefits, jobseekers must meet several obligations. They are expected to:
The Employment Plan, or an applicable activation or integration plan, is the central mechanism for managing a jobseeker's obligations. It is prepared in cooperation with an employment official and sets out the actions, instructions and deadlines the jobseeker must follow.
Failure to comply with these obligations can result in the loss of unemployment benefits for a fixed period, resulting in a mandatory waiting period.
Finnish law does not require statutory severance pay when an employment relationship ends, regardless of the reason for dismissal or the employee's length of service. There is no general legal requirement for employers to provide a severance package or a payment calculated based on years of service.
For a legally valid dismissal, whether based on individual or redundancy grounds, the employer's primary financial obligations during the notice period are generally limited to paying:
A probationary period is not legally mandatory. If used, it must be explicitly agreed in the employment contract before the employee starts work; otherwise, the probationary period is invalid.
The IT Service Sector collective agreement (CBA) provides that:
During the probationary period, either the employer or the employee may cancel the employment contract immediately, without observing a notice period or providing the statutory grounds normally required for termination.
The general principle is that IP rights belong to the individual who creates them and do not automatically transfer to the employer. An exception applies to computer programmes and databases, for which rights may transfer to the employer.
For patentable technical inventions, the Act on the Right in Employee Inventions sets out specific rules. An employer may acquire rights to an employee's invention, either in whole or in part, where the invention:
Where an employer claims rights to an employee's invention, the employee is statutorily entitled to reasonable compensation from the employer.
Finnish employers may process only the personal data that is directly necessary for the employee's employment relationship.
Information about an employee's state of health, including drug testing data, must be stored separately from other personal data, such as payroll records. Access to health data must be restricted to a limited number of designated persons who are involved in making or implementing employment-related decisions based on that information.
Employers must meet strict conditions when using technical monitoring, including:
These monitoring practices must be reviewed through a cooperation procedure with employees.
Camera surveillance is expressly prohibited in staff facilities, changing rooms and an employee's personal office.
Employers also cannot indiscriminately monitor an employee's internet browsing or collect identifying data from their browsing activity. Even employee consent does not make such monitoring permissible where it would violate the employee's right to confidential communication.
Personal data must not be retained for longer than is necessary for the defined purpose of processing. For example, health data must be erased immediately once the grounds for processing it cease to exist. The need to retain health data must also be assessed at least every five years.
If an employer intends to obtain personal credit data or criminal record information to assess an employee's reliability, the employee must be notified in advance. The notification must specify the register from which the information will be obtained. Access to criminal record information is subject to particularly strict restrictions.
Employees must not perform work for another party or engage in any activity that would cause manifest harm to the employer, considering the nature of the work and the employee’s position. This ban follows directly from the Employment Contracts Act and applies without any separate agreement.
A post-employment non-compete clause is only lawful when there are particularly weighty reasons related to the employer’s operations or the employment relationship. These reasons must still be in place when the clause is invoked.
The assessment takes into account the employee’s duties and position, access to information, the employer’s need to protect trade secrets (including research, development and customer data), sector-specific features and any special training provided.
A non-compete clause following termination of employment may last up to six months. If the employer and employee agree that the employee will be paid reasonable compensation for the restraint period, it may last for a maximum of one year.
The employer must pay compensation for every agreed non-compete clause for the entire restraint period. This amounts to 40% of the employee’s normal pay if the restraint period is six months or less, and 60% if it exceeds six months (up to the 12-month maximum). Payment is made during the restraint period, following the normal pay cycle, unless another schedule or a lump sum is agreed after the employment ends.
The non-compete clause is not binding if employment ends for a reason attributable to the employer, such as financial or production-related redundancy. However, the non-competition agreement does bind the employee if the employer has given notice on the grounds of a sufficiently weighty reason relating to the employee.
Finland does not have a Remote Work Act. Instead, remote working is voluntary and based on an agreement between the employer and employee. It is considered a way of organising work rather than a separate legal category.
Finnish authorities recommend setting out remote working arrangements in writing. The agreement should clearly define:
Establishing these ground rules helps prevent disputes and supports compliance with the applicable employment requirements.
Both parties should establish clear remote working ground rules, covering working hours, supervision, data security, sick leave and costs. Additional checks may be needed if work is carried out abroad.
Employers must ensure that remote working is safe, ergonomic and free from interruptions. This involves identifying hazards, assessing risks and planning preventive measures.
In home settings, this is implemented through joint planning and guidance, as the employer’s ability to inspect the home is limited by domestic peace. Employers must also monitor psychosocial factors such as stress and recovery, and take action when necessary.
Employees must follow safety instructions, organise their work to allow for breaks and recovery, report hazards and take responsibility for their own safety (including posture and workstation ergonomics).
Collective agreements in the Finnish IT industry have extensive coverage. Under the generally binding rule set out in the Employment Contracts Act, newly concluded IT industry collective agreements also apply to employers that are not members of an employers’ association.
IT industry collective agreements may include provisions that allow employers and employees to deviate from certain requirements of Finnish employment legislation. They can also permit company- or workplace-specific agreements, giving organisations flexibility to adapt employment conditions to their individual needs while remaining within the framework of the applicable collective agreement.
During the validity of a collective agreement, the obligation to maintain labour peace prohibits industrial action that conflicts with the terms and conditions established by the agreement. This includes strikes and other measures that would breach the agreed employment conditions.
Regular working hours for daytime work are limited to 7.5 hours per day and 37.5 hours per week. However, local agreements may extend these to 8 hours per day and 40 hours per week, provided that the average working hours remain at 37.5 hours weekly.
The standard workweek commences on Monday, with Saturdays and Sundays typically designated as days off. If operational needs require work on weekends, alternative weekdays may be assigned as days off.
Overtime is defined as work exceeding 8 hours per day or 40 hours per week and is compensated as follows:
Daily overtime:
Weekly overtime:
For overtime performed on Sundays or public holidays, Sunday work compensation is applied in addition to overtime pay unless a different arrangement is agreed upon locally.
Employees are entitled to an uninterrupted weekly rest period of 35 hours, ideally scheduled on Sundays. This rest period can be averaged over two weeks, provided the minimum weekly rest is at least 24 hours.
Employees may accrue days of annual leave in accordance with the Annual Holidays Act, with provisions for deferring these for future use. Additionally, local agreements may permit the inclusion of enterprise-specific days off, such as converting holiday bonuses into additional leave.
Employees’ salaries are generally paid as monthly amounts. For part-time employees, salary is calculated in proportion to the agreed working hours compared with full-time hours. Temporary employees may be subject to specific wage arrangements under the applicable collective agreement.
Salaries are primarily determined by the competence classifications set out in the collective agreement or according to the employer’s salary policy.
Where a workplace-specific salary scheme is introduced, the employer and employees must reach a written agreement following local negotiations.
Under such schemes, salaries are linked to task competence levels and employee qualifications. Salaries must meet or exceed the minimum wage thresholds applicable to competence classification levels 1 to 3A.
An employer may not terminate an employment contract without valid and justifiable grounds. Acceptable grounds for termination include:
The employer must issue the termination notice within a reasonable period after becoming aware of the grounds for termination.
Before proceeding with termination, the employer must prioritise offering the employee suitable alternative work or training opportunities within the employee’s local employment district.
Hiring employees based in Finland gives companies easier access to the broader EU market, leveraging Finland’s business-friendly policies and advanced infrastructure. Helsinki, in particular, is recognised as an emerging hub for startups and international trade.
Moreover, Finland has comprehensive labour laws that ensure fair treatment and benefits for employees, contributing to positive employer-employee relationships. The country also promotes a balanced work-life culture that leads to higher job satisfaction, better productivity, and reduced burnout.
Native Teams helps you employ and pay your team in Finland directly through owned entities and infrastructure.
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