Finland Gender Pay Gap Reporting Law Guide
Introduction
Finland's Act on Equality between Women and Men (609/1986), also referred to as the Equality Act, first came into force on Jan. 1, 1987. It aims to prevent gender-based discrimination and promote equality between women and men, thus improving the status of women, particularly in the workplace.
Public and private employers with 30 or more employees are required to prepare gender equality plans every two years.
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Finland Reporting Requirements
Who Needs to Report?
Employers with 30 or more employees are required to prepare gender equality plans which must include a comprehensive pay survey.
What to Report?
Gender equality plans may be incorporated into a personnel and training plan or an occupational safety and health action plan. Plans must be prepared in cooperation with representatives appointed by employees. Those representatives must have an opportunity to participate in, and influence the preparation of, the plan.
Gender equality plans must include
- An assessment of the employer’s gender equality situation, including details of the employment of women and men in different jobs, and a pay survey covering all employees presenting:
- Classifications of jobs performed by women and men;
- The pay for those jobs, and;
- Differences in pay.
- Necessary measures planned for introduction or implementation, with the purpose of promoting
gender equality and achieving equality in pay. - A review of the extent to which measures previously included in the gender equality plan have
been implemented and results achieved.
Pay Survey: The purpose of the pay survey is to ensure there are no unjustified pay differences between women and men engaged in either the same work or work of equal value.
In the process of conducting a pay survey, employers must compare pay between men and women in each employee group. If the pay equity analysis shows differences in pay between women and men, the employer must analyze the reasons for these differences. Where an employer has established systems in which wages consist of pay components, the central components are inspected to clarify the reasons for the differences.
If there is no justification for the pay differences, the employer must take appropriate measures to
rectify the situation. Additional guidance on what "appropriate measures" entails is not provided.
According to the Ombudsman for Equality, “Comparisons of pay can principally be done for employees who are carrying out the same work or work of equal value for the same employer. ”
Acceptable reasons for pay differences are also provided by the Ombudsman for Equality. These include work experience and education, personal performance, different collective agreements, market factors, and other allowed temporary differences.
Where and When to Report?
Regulatory Filing
Gender equality plans are internal workplace documents that are not required to be published or reported to a government agency.
Internal Disclosure
Employees must be informed about the plans and any updates made to them.
Deadlines and Cadence
Upon reaching the threshold of 30 employees, an organization should begin developing gender equality plans as soon as possible.
Gender equality plans must be prepared at least every two years.
An agreement can be made locally that the pay survey will be carried out no less than once every three years if other parts of the gender equality plan are completed annually.
Finland Pay Transparency Requirements
There are currently no requirements for pay transparency in Finland. However, Section 6 (232/2005) of the Act requires employers to:
- Ensure job vacancies are designed to attract applications from men and women.
- Promote the equitable recruitment of women and men.
- Create equal opportunities for career advancement.
Employment Equity Standards
Equal pay is regarded as a fundamental and human right in Finnish law. People performing the same work or work of equal value must receive the same pay, irrespective of gender.
Section 6 of the Constitution of Finland states that everyone is equal before the law. In addition, "equality of the sexes is promoted in societal activity and working life, especially in the determination of pay and other terms of employment."
The Act on Equality includes a specific standard of equity within its text, stating that there shall be "no unjustified pay differences between women and men who are working for the same employer and engaged in either the same work or work of equal value."
If an objective analysis returns a result of clear differences in pay between men and women that runs counter to this principle, the employer is required to investigate the causes of those differences.
The Risks of Non-Compliance
Compliance with the Equality Act is supervised by the Ombudsman for Equality and the National Non-Discrimination and Equality Tribunal.
The Ombudsman for Equality has the right to carry out workplace inspections if there are reasons to suspect that business obligations concerning equality have not been complied with (Section 18 (1023/2008).
If an employee suspects pay discrimination, the employee's representative has the right to obtain information from the Ombudsman for Equality on the pay and terms of employment of an individual employee, if their grounds for suspicion are justified. The Ombudsman for Equality must supply the information without delay and no later than two months after receipt of the request (Section 17 (1329/2014.)
If an employer fails to provide a gender equality plan, the Ombudsman for Equality may impose a reasonable time limit within which the obligation must be met (Section 19 (1329/2014).
The Tribunal can reinforce the order with a conditional fine (Section 21a (1329/2014).
How Can Trusaic Assist with Finland Gender Equality Plans & Pay Survey Compliance?
1. Comply - Use Trusaic's GPDR solution to complete required reporting by compliance deadlines:
Applicability Determination: Perform an accurate assessment of your applicability, according to jurisdictional specific definitions and regulatory frameworks so you can understand your reporting obligations across the globe.
Deadline Management: Prepare ahead of time with project timelines, timely notifications, and reminders, to keep you on track to meeting jurisdictional deadlines.
Expert Legal Guidance and Support: Benefit from the expertise of our trusted pay equity attorneys, so you understand your compliance requirements across a diverse global regulatory landscape. Receive world-class customer support, including assistance throughout the compliance process.
Streamlined Data Extraction: Collect the necessary data for analysis and submission with a simple click of a button; powered by certified data integrations with the world's largest HCM, HR and Payroll platforms, including Workday, SAP, UKG and ADP. Provide data through Trusaic's Workplace Equity platform, a SOC 2 Type II and GDPR-compliant tool for data transmission.
Data Quality Assurance: Trusaic performs data validations to ensure your collected data and information aligns with the standards and definitions provided by each jurisdiction.
Compliant Report Outputs: Take away the burden of reporting by effortlessly generating outputs containing necessary compliance information.
Reporting Checklist: Follow step-by-step guidance on where, when and how to report to any jurisdiction's regulatory body, as well as your required internal disclosure and public posting obligations.
2. Correct - Use PayParity and OpportunityParity to understand, explain and resolve pay disparities:
Risk Assessments: Stay aware of any potential exposure to any government audit or litigation. Our cross-functional team of data scientists, statisticians, and government regulatory compliance experts have rigorously worked to reverse-engineer the calculations that will be used by jurisdictions to estimate pay disparities, so you can prepare in advance.
Understand your Pay Gaps: Leverage Trusaic's pay equity software solution to explain your pay gaps so you can understand the root causes and safeguard from equal pay claims and legal action.
Resolve Pay Disparities: Make pay adjustments where applicable so you can eliminate pay disparities and show improvements in your reported pay gaps from one year to the next.
Identify Barriers to Professional Growth: Ensure workforce diversity and equity with hiring, promotion, retention, and opportunity analytics using opportunity equity software solution.
3. Communicate - Use Trusaic's Workplace Equity Solution to communicate narratives and share salary ranges with confidence:
Workplace Equity Narrative: Communicate the sources of your pay gaps, progress objectives, and corrective measures to employees and internal stakeholders with Trusaic's Workplace Equity product suite. Show data-backed progress in your pay gaps over time.
Salary Range Explainability: Use Salary Range Finder to establish and post competitive and equitable pay ranges to confidently comply with pay transparency laws.
Mitigate Risk of Recurrent Pay Disparities: Ensure new hires receive fair pay offers with the use of external labor market data and internal pay equity analytics to reduce unplanned and expensive pay remediations.
How to Prepare to Comply with the EU Directive
The EU Pay Transparency Directive was approved in 2023, establishing a clear framework for EU member states to apply the principle of equal pay for equal work or work of equal value.
EU member states have three years from June 7, 2023 to transpose the directive into law. Likely implementation dates are 2026, however, some countries may enact legislation earlier. All 27 member states are required to adopt the directive.
Employers operating in EU member states can take several preliminary steps to ensure compliance with the upcoming legislation. The EU Directive includes a requirement for a Joint Pay Assessment where pay gaps are higher than 5%. The recent data shows a gender pay gap of 16% in Finland, which places most employers at high risk of sanctions.
Trusaic is GDPR compliant and can assist any organization in any EU state in meeting its obligations under both the EU Corporate Sustainability Reporting Directive and the EU Pay Transparency Directive.
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Sign up for PayParity by May 31, 2024 and receive OpportunityParityTM at no additional cost