Government announces cuts to employee benefits in Finland
Finland has been lagging behind in economic terms for a while now. While some sectors, such as IT are doing fine due to the pressure to digitalise services, more traditional industries and service sectors continue to struggle. The Finnish Government today announced measures to improve the competitiveness of the Finnish economy. This includes universal cuts to employment terms in Finland.
The aim of the government is to increase the employment percentage to 72% by adding employed citizens by 110 000 by the end of it's term. Increase of debt in comparison to GDP (Gross Domestic Product) is targeted to end by term and adding debt will be halted in 2021. Read more about the woes of the Finnish economy:
- WEF studies reasons behind Finland's faltering economy
- Finnish education lauded as a competitive edge for Business, but why is the Economy lagging?
- Meanwhile in Sweden... the economy expands
According to the prime minister Juha Sipilä drastic measures such as cuts to holidays and overtime pay are needed to balance the economy and return competitiveness. The practical measures are as follows:
- The first day of sickleave is unpaid and for days 2-9 the pay is 80%
- Two bank holidays are altered to be non-paid, without any change to the yearly working time
- Epiphany (Loppiainen), 6th of January
- Feast of the Ascension (Helatorstai), a Thursday, the fortieth day of Easter
- Overtime pay percentages are halved and sunday overtime is cut from 100% to 75% extra
- Long, over 38 day yearly holiday rights are cut to 30 days. This applies mostly to the public sector.
- Companies employing over 20 people must, in addition to severance period pay, provide fired employees training for re-employment. The value of the training should be at least the same as one months wages of the employee.
- Companies employing over 20 people must provide health care services to fired employees for six months after the last day of employment.
- Employment prospects of young women is advanced by increasing the compensation of additional parental holidays by a sum 2500 Euros paid to the employer.
- Private employers' social security payment is lowered by 1,72 percent starting from January 2017
For private sector employees the most tangible changes are parts 1, 2 and 3. Cutting sickleave pay means that days on sick leave will affect your monthly wages directly - a similar model is in use in Sweden. Two bank holidays are no longer paid, so essentially you will need to work two 15 hours extra to reach a balance of zero in a year. Overpay rates are changed, so if you've been relying on overtime work for income, this will affect you.
The Nordic countries have long been a haven for employees. Generous sick leave, maternity and pension benefits are taken for granted. But now it looks like the Welfare State Cuts Back.
Read more from YLE:
- Government to scrap bank holidays and 1st day’s sick pay
- Opposition: Govt labour reforms amount to pay cuts; women-dominated fields to hurt most