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Making formal work more attractive in Finland

This article discusses Finland's decision to step up efforts in preventing grey economy and white-collar crime through various projects and legislation, including enhancements to the Contractor's Liability Act, wages to bank legislation, and the introduction of tax number and monthly notification procedures.

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Making formal work more attractive in Finland

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  1. Makingformalworkmoreattractive in Finland Jan Hjelt Ministerialadviser 17.9.2014

  2. 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 • EnhacingContractor´sLiability Act • Wages to bank legislation • Introduction of taxnumber and monthly notification procedure. Jan Hjelt

  3. 1 The Contractor´sLiability Act Entered into force at the beginning of 2007 Construction sectorlegislation in september 2012 The objetives: • To promoteequalcompetition • To ensureminimunterms of the employmentrelationship • To prevent the negativeeffects of the greyeconomy Main instruments: • Obligation to check • Negligencefee Jan Hjelt

  4. Obligation to check The contractormusthave the informationbeforeconcluding 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

  5. The negligence fee The negligencefeewillbecharged: • If the contractorhasneglectedtheirobligation to check • If the contractorhassignedcontractwith an entrepreneurwhohasbeenbarredunder the Act on Business Injunctions • If the contractorhassigned a contract, despite the factthattheyshouldhaveunderstoodthat the contractingpartyhadno intention of fulfillingtheirstatuatoryobligations Minimun 1 700 EUR and maximun 17 000 EUR. Increasednegligancefeeminimum 16 000 EUR and maximum 50 000 EUR (points 2 and 3, only in constructionsector) Jan Hjelt

  6. Enhancement of The Contractor´sLiability Act (January 2015) Increasingnegligencefee • Negligencefeeminimun 2 000 EUR maximum 20 000 EUR • Increasednegligencefeeminimum 20 000 and maximum 65 000 EUR Widening the scope of Increasednegligencefee • Increasednegligencefeewillapply in allsectors Expandin of Obligation to check • Occupationalhealthcare Detaliedrules on postedworkers Jan Hjelt

  7. 2 Wages to the banklegislation • Entered in to forceJuly 2013 • Wagemustbepaid 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

  8. 3 Taxnumber and monthly notification procedure (construction sector) • Obligation to use Tax Number in construction sector (September 2012) • Everyemployeemustwaretaxnumber (photo ID) in constructionsite • 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 • employeeinformation, (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

  9. Thankyou! jan.hjelt@tem.fi

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