Making formal work more attractive in Finland Jan Hjelt Ministerial adviser 17.9.2014

1 THE GOVERNMENT’S DECISION-IN-PRINCIPLE A strategy to step up the activities to prevent grey economy activity and white-collar crime for 2012-2015. Includes 22 projects Enhacing Contractor´s Liability Act Wages to bank legislation Introduction of tax number and monthly notification procedure. Jan Hjelt

1 The Contractor´s Liability Act Entered into force at the beginning of 2007 Construction sector legislation in september 2012 The objetives: To promote equal competition To ensure minimun terms of the employment relationship To prevent the negative effects of the grey economy Main instruments: Obligation to check Negligence fee Jan Hjelt

Obligation to check The contractor must have the information before concluding a contract. The preliminary tax register, the employers' register and VAT (value-added tax) register An extract from the Trade Register A certificate or report of tax payments A certificates confirming that pension insurances have been taken out Information on the collective agreement Accident insurance (in construction sector) Jan Hjelt

The negligence fee The negligence fee will be charged: If the contractor has neglected their obligation to check If the contractor has signed contract with an entrepreneur who has been barred under the Act on Business Injunctions If the contractor has signed a contract, despite the fact that they should have understood that the contracting party had no intention of fulfilling their statuatory obligations Minimun 1 700 EUR and maximun 17 000 EUR. Increased negligance fee minimum 16 000 EUR and maximum 50 000 EUR (points 2 and 3, only in construction sector) Jan Hjelt

Enhancement of The Contractor´s Liability Act (January 2015) Increasing negligence fee Negligence fee minimun 2 000 EUR maximum 20 000 EUR Increased negligence fee minimum 20 000 and maximum 65 000 EUR Widening the scope of Increased negligence fee Increased negligence fee will apply in all sectors Expandin of Obligation to check Occupational health care Detalied rules on posted workers Jan Hjelt

2 Wages to the bank legislation Entered in to force July 2013 Wage must be paid to financial institution appointed by the employee. Can be paid in cash only if it is necessary because of compelling reasons. When the payment is made in cash the employer shall have a receipt signed by the employee verifying the payment. Employer has obligation to attach the receipt to the bookkeeping Violation of obligations is penalized Jan Hjelt

3 Tax number and monthly notification procedure (construction sector) Obligation to use Tax Number in construction sector (September 2012) Every employee must ware tax number (photo ID) in construction site Monthly notification procedure (July 2014) contract information, (contractor who order a construction service) must report details of the contract (including contracting parties, total amount, and duration) every month to the Tax Administration employee information, (The main contractor) details on all people working at a shared construction site, regardless of the type of their employment relationship or employer. Employers has obligation to inform the main contractor. Jan Hjelt

Thank you! jan.hjelt@tem.fi