Edited: 07.05.2019 - 12:38

Keywords: Collective agreement

Pay (wages and salaries)

‘Pay’ – i.e. a wage or salary – is the remuneration paid by an employer to an employee for work done.

How is pay determined?
Pay and earnings in statistics
Was your pay calculated correctly?

How is pay determined?

The employee and the employer agree on pay and other terms and conditions of employment when they conclude an employment contract. This should be done in writing.

There is no law in Finland to determine the amount of pay. Minimum pay levels for different sectors are specified in collective agreements signed between a trade union (such as PAM) and an employer organisation. An employer and an employee may not agree on pay falling below these minimum levels in an employment contract. Conversely, they are always allowed to agree on better pay.

Pay can be divided into basic pay and various allowances. Basic pay can be monthly, hourly or piecework pay. Allowances can be made up of compensation for overtime or working in the evenings or on public holidays, for example. Allowances vary between different sectors. To find out what you ought to be paid, you should always check the collective agreement in place in your own sector.

You can also check the minimum pay levels for the commercial and hotel and restaurant sectors through here (in Finnish).

Pay and earnings in statistics

There is a difference between ‘pay’ – i.e. ‘wages and salaries’ – and ‘earnings’ in statistics. What is it? That’s explained by PAM Economist Antti Koskela in the video clip below.

Wages and salaries only refer to basic pay. Earnings, in turn, also include commissions and allowances based on special conditions and working hours, but not overtime. As a result, earnings are often higher than basic pay.

In colloquial language, pay and earnings are often used synonymously, but there is in fact a difference. This is important to know when comparing income levels in different sectors based on statistics.

Was your pay calculated correctly?

Sometimes the amount that you are paid does not add up to what you are owed – therefore, it is important to keep track of your pay and working hours. Ask for all pay-related discussions to be conducted in writing. This makes it easier to prove what was agreed.

1. Keep a record of your hours.
Write down the hours that you have worked on a printed calendar, for example. If required, you can use it as evidence even years later.

2. Always check your payslip.
Your employer is required to provide you with a payslip every pay day. Check it and compare it to your own record of hours worked. Do the hours that you worked add up? Did you also receive all of the allowances due to you? Keep your payslips safe.

3. Ask your employer to correct the issue.
If you were not paid what was due or if you notice errors or omissions, contact your employer right away and try to sort things out. In most cases, such issues are caused by human error, and it only takes a reminder to correct them.

4. Seek help if necessary.
If you are uncertain about your issue, check with your workplace shop steward. If there is no shop steward at your workplace, contact your union.

If the issue is not resolved after you have sent a reminder, your shop steward or union can help and take the issue forward. Don’t hesitate to contact us.

In extreme cases, a shop steward or a union has helped an employee recover pay claims amounting to thousands of euros, such as unpaid working hours allowances.

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