In today’s business world, responsibility, transparency, and ethical operations are more important than ever. They’re not just nice-to-have values – they are the foundation of trust, long-term growth, and regulatory compliance.
One of the key legal frameworks that ensures responsible business practices in Finland is the Contractor’s Liability Act (Tilaajavastuulaki). This legislation plays a critical role in preventing unfair practices and promoting transparency – yet many companies are still unsure of how to apply it in their daily operations.
Whether you are a growing startup or a seasoned business leader, it is essential to understand how this law affects your operations and what you need to do to stay compliant. Here's a practical breakdown of the essentials.
What Is the Contractor’s Liability Act?
The Contractor’s Liability Act requires companies to ensure that their contractual partners meet all their statutory obligations – such as paying taxes, employment-related contributions, and pension insurance.
The law aims to ensure that businesses don’t unknowingly or indirectly benefit from partners who engage in unethical or illegal employment practices.
Who Does the Act Apply To?
The law is especially relevant to companies that:
- Subcontract work
- Hire temporary labor
- Operate in construction, logistics, industrial services, or other high-risk sectors
However, any business that outsources work or forms long-term service contracts should take note – it’s your responsibility to ensure that your partners are operating legally.
Why Is This Important?
Complying with the Contractor’s Liability Act is not just a matter of legal obligation – it reflects your company’s commitment to fair business practices.
The law helps to:
- Prevent the shadow economy
- Protect workers’ rights
- Ensure fair competition
- Strengthen trust within business networks
Being diligent in your compliance efforts sends a powerful message to clients, partners, and employees about the values your company upholds.
What Are Your Responsibilities as a Client or Contractor?
Before entering into an agreement, the contractor must verify that the subcontractor or temporary labor provider has fulfilled requirements like:
✅ Registered in the Trade Register
✅ No outstanding tax debts
✅ Valid employment pension insurance
✅ Valid accident insurance
✅ Right to work for foreign workers
✅ A1 certificates (or equivalent) for posted workers proving social security coverage
This information must be collected and documented before the work begins. Regular checks are also encouraged for long-term partnerships.
What Happens If You Don’t Comply?
Failure to meet these obligations can result in:
- Negligence fees (currently up to thousands of euros)
- Legal consequences
- Reputational damage
It’s not just about avoiding fines – it’s about protecting your company’s future. Responsible business practices are increasingly important to clients, stakeholders, and even future employees.
Responsibility Builds Trust
Complying with the Contractor’s Liability Act is about more than following the law. It is a demonstration of your company’s values – your respect for fair labor, legal integrity, and ethical business partnerships.
Taking responsibility and staying informed not only reduces risk but builds long-term value and trust with your clients and collaborators.
How Finland Relocation Services Can Support You
At Finland Relocation Services, we help companies navigate employer responsibilities, especially in the context of international recruitment, relocation, and compliance.
We can support you in:
- Understanding the documentation you need
- Verifying partner compliance
- Integrating contractor checks into your internal processes
- Providing end-to-end support for international hires
In collaboration with our trusted partners Uggla and Zeroni, we also offer a comprehensive site access control solution tailored to meet the requirements of Finnish legislation.
This service includes both on-site and back-office resources, combining expert support and a technical platform designed to streamline compliance with the Contractor’s Liability Act and other regulatory obligations. Whether you're looking to build a new process from the ground up or improve an existing one, we’ll guide you through planning, implementation, and long-term management—ensuring your operations remain compliant, secure, and efficient.
📩 Have questions or need help ensuring compliance with the Contractor’s Liability Act?
We’re here to help. Reach out today and let’s make your operations more transparent, secure, and responsible.
