Annual leave is a crucial aspect of employment in Finland, designed to ensure that employees have the opportunity to rest and recharge. The regulations governing annual leave provide a framework for accrual, payment, and usage of leave days. Here's what you need to know about annual leave in Finland.
1. Minimum Annual Leave Entitlement
In Finland, the minimum annual leave entitlement is structured based on the employee's length of service:
First Year of Employment: Employees accrue 2 days of leave per month, totaling 24 days per year.
From the Second Year Onward: This increases to 2.5 days per month, resulting in 30 days per year.
2. Accrual Period
Annual leave accrues over a defined period:
Accrual Year: The accrual period runs from April 1 to March 31 of the following year.
Pro-Rated Leave: For the first year of employment, leave days are pro-rated based on the months worked within that accrual year.
Full Entitlement: From the second year of employment onwards, employees are entitled to the full annual leave days as specified.
3. Holiday Seasons and Scheduling of Leave
Under the Finnish Annual Holidays Act, annual leave is divided into two statutory periods:
Summer Holiday Season: Runs from 2 May to 30 September. The main portion of annual leave — 24 days — must be granted during this period (summer leave / kesäloma).
Winter Holiday Season: Runs from 1 October to 30 April. The remaining portion of annual leave (up to 6 days) must be granted by the start of the following summer holiday season (winter leave / talviloma).
The employer is responsible for scheduling leave, while taking employees' preferences into account, and must ensure that the statutory summer leave is granted within the summer holiday period. The employer must notify the employee of the leave dates at least one month in advance, or where that is not possible, no later than two weeks before the leave begins.
Minimum Uninterrupted Leave: Under Finnish law, at least 12 consecutive working days (two weeks) of the summer leave must be taken as an uninterrupted period. In practice, many employees take the full 24 days as a single continuous block during the summer season, subject to their available leave balance.
4. Payment of Holiday Pay
Holiday pay is an important consideration for employees taking annual leave:
Calculation of Holiday Pay: Holiday pay is determined by taking the average monthly salary, dividing that amount by 25, and then multiplying by the number of holiday days taken. This calculation may vary depending on specific wage items included in the employee's salary.
Payment Timing: Holiday pay is typically disbursed prior to or during the annual leave period.
5. Holiday Bonus
A holiday bonus (lomaraha) is a common practice in Finland, typically amounting to 50% of the employee's holiday pay. However, it is important to note that the holiday bonus is not a statutory entitlement under Finnish law — it is generally based on collective bargaining agreements (CBAs). Since Remote People does not currently operate under a CBA, there is no general legal obligation to pay a holiday bonus.
6. Accrued Leave and Carry Over
Employees may not use all of their accrued leave within the year:
Accumulation: Leave that is accrued but not used can be carried over to the next year.
Legal Minimum and Maximum: The law sets minimum and maximum limits for carryover, which can be adjusted based on the employer's consent.