Salary is the usually monetary remuneration paid by an employer to an employee for work. A salary may also consist partly or fully of fringe benefits, such as a company phone, car, apartment or meal benefits.
The Union of Professional Engineers in Finland conducts various studies on members’ salaries every year and negotiates on salaries in negotiations concerning collective agreements.
The employer and employee are free to agree on the grounds for the salary. Because of this, performance-based pay (such as commissions, bonuses, share of profits) can be applied in addition to a basic salary or in lieu of it. Performance-based pay must be determined only according to performance factors that the employee himself or herself can influence. The principles for calculating payment by results must always be agreed on in detail and in writing, in terms of both profit and expense factors. In the case of payment by results, one must always also agree on how it is paid at the end of an employment relationship. Regarding salesmen, the Act on Commercial Representatives and Salesmen provides for the right to a subsequent commission. Because of this, salesmen are entitled to receive a commission for an agreement created after their employment relationship has ended if the agreement can primarily be considered to have been arrived at with the salesman’s contribution during the validity of his or her employment contract and if the agreement is made within a reasonable period of time following the termination of the employment contract.
If an employment relationship is not subject to any collective agreement, the salary is determined according to the employment contract between the employer and employee. If no agreement has been made on the remuneration to be paid in the employment relationship, the employee must be paid normal and reasonable wages for the work performed. Always agree upon salary details before starting work. The Union recommends you contact us to inquire about the reasonableness of the salary. The Union has free salary counselling for members, in which they give you a salary range depending on your situation.
The maximum pay period for a primary occupation is one month. The salary must be paid no later than on the final date of the pay period. Parties often agree on the payment of salary earlier during the pay period (normal dates may be the 15th of the month or the 30th of the month. However, in cases involving hourly or daily wages, salaries must be paid at least twice a month. If part of the salary is determined as a share of profits, commission or some other comparable basis, the payment period may be longer than one month, but nonetheless no longer than 12 months.
The salary is paid to the bank account, which the employee has given to the employer. Salary may also be paid in cash, if there is a special reason for this. The salary must be available for withdrawal on its due date and the salary must be in the account of the employee on the preceding working day. For example if the salary day is the 15th of the month and that happens to be a Sunday, then salary must be paid to the employees account on Friday the 13th of the month (if that is a working day).
An employee who cannot work due to an illness or accident has the right to take sick leave. They are also entitled to sick pay. Sick pay is determined on the basis of the duration of the employment relationship, the collective agreement, or the law.
If the work is not subject to any collective agreement and barring any agreement on something else, the employee is entitled, in employment relationships that have been effect in at least a month, to receive their full salary until the end of the ninth working day following the day on which they fell ill. In employment relationships that have been in effect less than a month, the employee is correspondingly entitled to receive 50 percent of their salary.
The employee is entitled to receive daily allowance from Kela (the Social Insurance Institution) if the sickness continues for a longer period of time than the right to sick pay. Further information on sickness allowance is available on Kela’s website.
The employee is not entitled to sick pay if they caused their incapacity for work willfully or through gross negligence. Upon request, the employee must provide the employer with a reliable account of their incapacity for work. Employers must be notified immediately of absences due to illness.
The payment of salary is one of the most material obligations of an employer in an employment relationship. If your salary has not been paid on time, you should react to it immediately. Recurring problems in the payment of salaries are often a sign of a company having an extremely weak financial situation, and possibly of future bankruptcy.
- Submit a complaint on the matter in writing to the employer, via email, for example.
- If the matter is not remedied within a reasonable period of time, fill in this form and deliver it to your employer.
- Filling in the form and its evidential delivery to the employer allows for terminating the employment relationship in such a way that the termination is considered to have been attributable to the employer, in which case you will not be subject to a waiting period in unemployment security.
- Apply for a pay guarantee on the outstanding receivables no later than within three months of the salary not being paid. For example, if the salary should have been paid on March 15, apply for the pay guarantee by the end of May, at the latest.
- If you have problems or questions related to salary arrears, contact the Union’s customer service. The Union’s legal counsels will assist you in the matter.
If your employment relationship has ended, the salary falls due either on the date the employment relationship ends or on the employer’s subsequent regular salary payment date. On this date, make sure that you have been paid all items, such as compensation for any holidays you have not taken.
If you suspect that not all items have been paid to you correctly, make a complaint to your employer first and, at the very least, ask for an explanation for the failure to pay a particular item. If the explanation leaves you wondering, contact the Union’s customer service to clear it up. The Union’s legal counsels will assist you in the matter.
If you suspect that the employer is insolvent, apply for a pay guarantee within three months of the salary receivables falling due, i.e. within three months of the final day of the employment relationship.
If an employer has been declared bankrupt or is otherwise insolvent, employees may apply for unpaid salary through a pay guarantee. Pay guarantees are subject to a strict application period, which is three months as of the salary in question falling due.
A prerequisite for being granted pay guarantee is that the work has been carried out in Finland or in the employment of a Finnish company abroad and that the employee has a residence in Finland.
“Receivables”, in this context, refers to salaries, for example, as well as compensation for annual holiday, per diem allowances and travel expenses.
The maximum amount of a pay guarantee per employee based on work carried out for one employer is EUR 15,200. Pay guarantees also include separate maximum amounts for receivables related to a working hours bank which is, based on work carried out for the same employer, an amount equal to the salary of six months.
The pay guarantee is applied for on a form available at TE Offices or at a Centre for Economic Development, Transport and the Environment (ELY Centre). They can also assist you in drawing up the application. If an employer has been declared bankrupt, the receiver usually draws up a pay guarantee application on behalf of the employees. The application must be made within three months of the due date of a receivable.
Further information can be found on the website of ELY Centres.