New Employer of Record Solutions in Finland and Sweden
Plus: 5 Key Facts on Employing Workers in Each Country
New Employer of Record Solutions
Mauve Group is excited to be in the final stages of set up for two brand new Employer of Record solutions in Finland and Sweden. Our Research and Solutions department is putting the finishing touches on these two new solutions which will broaden our offering to clients in the Northern European region.
In both locations, we have registered our Irish entity White Coral Business Consulting Ltd as a foreign employer and have set up corresponding local payrolls; this will permit the employment of locals, EU nationals and anyone with existing right-to-work. In Sweden, we can also support the employment of non-EU nationals; a work permit will be required, and quotations for Mauve’s support with this can be provided by our Immigration team. At present the solution in Finland is not available to nationalities outside the EU, but we are continuing to investigate how we can support these workers in the future.
Workers will be employed through White Coral Business Consulting and paid via the local payroll, with local tax and social security obligations paid to the authorities in line with local law. All solutions will be fully raised and managed in-house by Mauve Group with support from our local accounting and legal partners. Utilising our network of entities means we do not have to subcontract to third-party providers like many of the companies selling EoR solutions in the global mobility industry.
If your organisation is looking for assistance in Sweden or Finland, whether to expand its operations or to support existing personnel and assignments, Mauve Group’s new Employer of Record solutions could be the answer. For more information, get in touch via the Contact Form; and read on for five key facts on employment in each location.
Employing Workers in Sweden and Finland: 5 Key Facts
Regular working hours should generally not exceed eight hours a day, 40 hours a week. However, regular working hours for white-collar employees are typically 7.5 hours a day and 37.5 hours a week.
Finland has no statutory minimum wage. However, agreements typically contain detailed provisions on minimum wages. If there is no agreement on remuneration, the employee must be paid reasonable remuneration for the work performed.
For permanent employment, a maximum probation period of 6 months can be agreed; in fixed-term agreements, probation cannot be longer than half of the duration of the employment. Probation can be extended by at least 30 days for reasons of incapacitation or parental leave.
In Finland, the length of statutory annual leave is regulated by the Annual Holidays Act. Accrual of annual leave depends on the length of employment and how many full holiday credit months the employee has worked within the holiday credit year (1 April to 31 March). If the employment is at least one year by the end of the holiday credit year, an employee is entitled to 2.5 weekdays of leave. If less than one year, the employee is entitled to 2 weekdays of leave for each holiday credit month. The maximum length of statutory annual leave is therefore either 24 or 30 days per year. Saturdays qualify as weekdays even if the employee does not work on Saturdays, so in practice the usual 30 days would equal to five (5) weeks of holiday.
Employers are not permitted to terminate indefinite employment contracts without proper and serious reasons. Such reasons include serious breach or neglect of the employee’s obligations, or work having substantially decreased on a permanent basis due to financial or production issues. Employees neglecting their duties must be warned and given an opportunity to amend their conduct before notice is given.
Termination of an employment contract with immediate effect can only be done under extremely exceptional circumstances. The reason should be of such magnitude that it is unreasonable to expect that the employer should continue the contractual relationship for the notice period. Mutual termination of an agreement can take place through a separation agreement. The terms of this agreement are subject to negotiation between employer and employee.
Generally, regular working time may not exceed 40 hours a week. Working time can be exceeded provided it averages 40 hours a week or less over a period of four weeks.
Sweden does not have a national minimum wage. Wage levels can be set in contractual negotiations between the employer and the employee, or agreed between sector-specific employers’ associations and trade unions. Annual pay rises are still commonplace in most sectors.
The maximum probationary period is six months. Probation can be terminated at expiry or any time during, unless otherwise stipulated. No reason needs to be given for terminating a probation, though the employer must inform of the termination. Employers have to give at least two weeks’ notice of the termination of a probation period.
The Annual Leave Act (1977:480) states that employees are entitled to 25 days of paid holiday per year. Holiday pay should equal the employee’s salary at the time of the leave, plus fixed salary supplements and a holiday supplement. The holiday supplement for each day of annual leave with pay is 1.82% of the employee’s weekly salary if paid weekly. It should be 0.43% of the monthly salary if paid monthly.
Termination of an employment contract must be based on “just cause”. This can be established either for reasons of redundancy or on “personal grounds”. Personal grounds are reasons that refer to the individual. “Redundancy” comprises reasons not specific to the individual, and includes fiscal considerations, business restructuring or the closing of a position. Rules are in place to protect the employee from unfair dismissal in such circumstances. An employer is entitled to terminate an employee’s contract with immediate effect only if the employee seriously neglects their work.
For a free, no-obligation EoR quotation for Finland or Sweden, speak to our Global Experts via the Contact Form.