Finland's employment legislation has undergone a significant revision. The updated rules, effective from January 1, 2025, alter the conditions under which foreign employers must structure employment contracts, observe collective agreement obligations, and follow mandatory termination procedures. Companies that have not yet audited their Finnish workforce arrangements risk direct exposure to enforcement action – and the compliance window is narrowing.
Finland's revised employment legislation, in force since January 1, 2025, introduces tighter obligations for foreign employers operating in the Finnish market. Key changes affect written employment contract requirements, collective agreement coverage, dismissal notice periods, and social security coordination for posted and locally hired workers. International companies with employees in Finland must complete a compliance review before the end of the first quarter of 2026 to avoid administrative sanctions.
This alert explains what changed, which business categories are affected, and the five immediate steps your organisation should take now.
What changed – the regulatory developments and their effective date
Finland's labour legislation was amended with effect from January 1, 2025. The revisions fall under three main branches of the legislative regime: employment legislation, collective bargaining rules, and social security provisions governing cross-border arrangements.
First, the threshold for mandatory written employment contract delivery was lowered. Employers must now provide a written statement of terms within seven days of the start of employment – down from the previous one-month window. This applies to all contracts, including fixed-term and part-time arrangements.
Second, the rules on collective agreement applicability were clarified. Foreign employers whose Finnish operations fall within a sector covered by a universally binding yleissitova työehtosopimus (generally binding collective agreement) are now expressly required to apply the minimum terms of that agreement. This obligation applies regardless of where the employer is incorporated. Sector coverage is determined by the principal activity of the Finnish operation, not by the employer's home-country classification.
Third, dismissal notice periods were restructured. The revised employment legislation ties notice periods more directly to length of service. Employers must now calculate and document the applicable notice period at the point of engagement, not only when a termination arises. Failure to record the correct period in the employment contract is treated as a standalone breach – separate from any dispute about the dismissal itself.
Fourth, amendments to Finland's social security rules affect posted workers and hybrid-working arrangements. Employers must now confirm the applicable social security regime in writing before an employee begins work. This requirement intersects with EU coordination rules and bilateral social security treaties to which Finland is party.
The työ- ja elinkeinoministeriö (Ministry of Economic Affairs and Employment of Finland) confirmed that enforcement of the new provisions began on the effective date. No transitional grace period applies to the written-contract and notice-period requirements.
Who is affected – threshold criteria and business categories
The updated rules apply broadly. Any foreign employer with at least one employee performing work in Finland on a regular basis is within scope. This includes:
- Companies posting workers to Finland from another EU member state or third country
- Foreign businesses that have hired employees directly in Finland without establishing a local subsidiary
- Multinational groups running Finnish operations through a branch or registered office
- Employers using Finnish-resident contractors whose arrangements may be reclassified as employment under Finnish employment legislation
Size is not a threshold criterion. A single posted worker or one locally hired employee brings the full set of obligations into play. Sector matters primarily for collective agreement coverage. Industries with universally binding collective agreements – construction, transport, cleaning services, retail, and hospitality are among the most commonly affected – carry an additional layer of mandatory compliance.
Foreign employers operating through digital platforms should pay particular attention. Finnish employment legislation has been interpreted by the courts to cover arrangements that exhibit the economic and organisational characteristics of employment, even when the contract uses self-employment or service-provider language. A reclassification finding triggers retroactive application of all statutory minimums, including corrected notice periods and social security contributions.
For international companies already managing employment matters in Finland, this update requires a direct review of existing contract templates, payroll documentation, and any posted-worker notifications filed before January 1, 2025.
To receive an expert assessment of your Finnish employment compliance position, contact us at info@ferrazwhitmore.com.
What to do now – immediate actions and timeline
The following five steps address the most pressing compliance exposures under the revised regime.
1. Audit all existing employment contracts. Review every contract governing work performed in Finland. Confirm that the written statement of terms was delivered within seven days of the employment start date. Where legacy contracts predate the 2025 amendments, issue updated written statements without delay. A missing or late statement does not void the employment relationship, but it removes the employer's ability to rely on undocumented terms in any subsequent dispute.
2. Verify collective agreement applicability. Identify the sector classification of your Finnish operation. Cross-reference that classification against the list of universally binding collective agreements published by the Finnish authorities. Where a binding agreement applies, confirm that all minimum terms – pay scales, working time limits, and leave entitlements – are reflected in current contracts and payroll practice.
3. Recalculate and document notice periods. For each employee, calculate the correct dismissal notice period based on length of service under the revised employment legislation. Record the applicable period in the employment contract or in a written addendum. This step must be completed before the end of Q1 2026 to avoid a standalone breach finding in any subsequent inspection.
4. Confirm social security status in writing. For posted workers and employees in hybrid arrangements, produce a written record of the applicable social security regime. Where EU coordination rules apply, ensure the relevant portable document is in place. Where a bilateral treaty governs, confirm the treaty certificate is current. Gaps in this documentation are a primary trigger for enforcement visits by Finnish labour inspectors.
5. Review contractor arrangements for reclassification risk. Identify any Finnish-resident individuals engaged as contractors or service providers. Apply the Finnish employment legislation test for economic and organisational dependency. Where the risk of reclassification is material, restructure the arrangement or convert it to an employment contract before an inspection occurs. Voluntary correction ahead of an audit is treated more favourably than a finding made during enforcement.
Companies with operations spanning multiple EU jurisdictions should also consider whether the Finnish changes interact with their broader workforce structures. For related considerations under Finnish corporate legislation, see our overview of corporate law matters in Finland. For a comparative perspective on how similar employment law changes have been handled in another EU jurisdiction, the analysis of updated employment regulations in Portugal provides a useful parallel.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our employment law practice supports international companies operating in Finland and across the Nordic and European markets. We advise on employment contract structuring, collective agreement compliance, termination procedures, posted-worker obligations, and social security coordination for cross-border workforces. Engaging a lawyer in Finland with genuine cross-border experience matters when regulatory changes arrive without a grace period. As an international law firm advising on Finnish employment matters, Ferraz & Whitmore combines Portuguese civil law expertise with English common law tradition to deliver practical, results-oriented counsel. Our attorneys have advised multinational groups and institutional investors on workforce compliance across both civil law and common law systems. To discuss your Finnish employment compliance requirements, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.