The Employer’s Obligation to Pay Salary during Family Leaves
According to the Finnish Employment Contracts Act, an employer has no obligation to pay the employee salary during family leaves.
However, nearly all collective agreements include provisions regarding payment of salary during pregnancy leave (or the corresponding maternity leave in old legislation) and in some collective agreements, parental leave (or the corresponding paternity leave in old legislation). The duration of the paid period varies between collective agreements, but most collective agreements provide, for example payment of salary for three months during pregnancy leave. Collective agreements usually require that the employment has lasted for at least a certain period before the start of the pregnancy leave (often six months) in order for the employee to receive salary during it. The Social Insurance Institution of Finland (KELA) pays the employer the pregnancy or parental allowance for the period during which the employer pays the employee salary for their pregnancy or parental leave in accordance with a collective agreement.
The employer of a pregnant employee is entitled to a lump sum compensation of 2500 euros to cover the costs of family leave. The compensation is paid to the employer if the employment contract has been agreed to be in force for at least one year, the employment has lasted for at least three months, and the working time has been agreed to be at least 80% of the working time of a full-time employee in the sector. In addition, it is required that the employee be paid pregnancy allowance or adoptive parent’s parental allowance and that the employer has the obligation based on the employment contract or collective agreement to pay salary for at least a one month period during pregnancy leave or adoptive parent’s parental leave.
Collective agreements usually contain provisions on payment of salary also during temporary child-care leave. On the contrary, collective agreements usually do not contain provisions regarding the employer’s obligation to pay salary for the duration of special pregnancy leave, child-care leave or temporary child-care leave.
Provisions and practices regarding payment of salary during family leaves vary between sectors and it is always recommendable for the employer to check the family leave provisions of the collective agreement of their sector.
If the sector does not have a generally applicable collective agreement and the employer does not apply a collective agreement based on its unionization, there is no obligation to pay salary during family leave.