No legislative amendments necessary in Finland to implement EU Minimum Wage Directive
The tripartite working group tasked with examining the implementation of the EU Directive on Minimum Wages in Finland has completed its work. According to the group, implementation of the Directive does not require national legislative measures. The current legislation meets the requirements of the Directive, and the conclusion of collective agreements is supported through official measures. In Finland, minimum wages are based exclusively on the collective agreement system.
The Directive aims to ensure adequate minimum wages throughout the EU. The minimum wage may be either statutory or based on collective agreements. The Directive is based on respect for national wage formation structures and the autonomy of the social partners.
The Directive entered into force in November 2022 and Member States have had two years to implement it.
The Ministry of Economic Affairs and Employment appointed a working group to prepare for the national implementation of the Directive. The working group evaluated the relationship between the requirements of the Directive and Finnish legislation, the labour market system and the wage formation process. In addition, the working group has prepared the implementation of required reporting under the Directive.
Minimum wage is based on collective agreements in Finland
The working group states in its memorandum that the Member States have significant leeway in implementing the Directive. In Finland, the determination of minimum wages is based solely on collective bargaining. From the perspective of the Directive, a minimum wage system based on collective bargaining is the most effective means of improving the adequacy of wages and working conditions and reducing wage inequality.
According to the working group, implementation of the Directive does not require legislative measures in Finland. However, Finland must report to the Commission on the rate of collective bargaining coverage, the lowest pay rates provided for in collective agreements and the level of wages paid to workers not covered by collective agreements.
The employee confederations – the Central Organisation of Finnish Trade Unions SAK, the Confederation of Unions for Professional and Managerial Staff in Finland Akava, and the Finnish Confederation of Professionals STTK – presented a dissenting opinion on the memorandum on the implementation of the minimum wage Directive. The Federation of Finnish Enterprises and the Confederation of Finnish Industries EK submitted a supplementary statement on the memorandum.
Inquiries:
Seija Jalkanen, Chief Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 048 952
Katariina Jämsén, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 143