Finland could track construction wages in real time

Finland’s construction workers’ union and the federation representing the country’s construction employers want authorities to be able to follow wage payments on building sites in real time. They have jointly proposed a digital payroll interface covering workers from outside the EU and the EEA, and a national employment register covering everyone who works in construction.

The proposals come from Rakennusliitto, the Finnish Construction Trade Union, and Rakennusteollisuus RT, the Confederation of Finnish Construction Industries. Rakennusliitto set them out in a statement on Tuesday. Both would require changes to Finnish law.

What the payroll interface would do

The interface would record payroll data for third-country construction workers. Authorities could follow the wages paid, the social security contributions, the payment dates and the pay periods as they occur, instead of reconstructing them from documents long afterwards. Where possible, the organisations say, it would run on systems the authorities already operate.

A register of who works for whom

The second measure is wider. An employment register, linked to Finland’s income register, the national system through which employers already report earnings data shortly after each payment, would cover everyone working in construction and not only workers from third countries. A client or main contractor could use a worker’s tax number together with the company’s identifiers to check whether that person is in fact employed by the firm presenting them.

According to the two organisations, that would make two things harder: the misuse of light entrepreneurship, the Finnish arrangement in which a person invoices through a service company instead of being employed, and the concealment of subcontracting chains. They say workers have been steered, or even forced, into light entrepreneurship.

Why third-country workers

About a fifth of the people working on Finnish building sites are foreign nationals, a figure the organisations take from the Tax Administration. Workers from outside the EU and the EEA are in the weakest position, they say, because their residence permit, their income and often their housing all depend on the same employer.

“Monitoring whether wages are paid correctly and whether employment relationships are lawful is demanding in construction,” says Jukka Sarhimaa, labour market director at Rakennusteollisuus RT. He says enforcement resources are always limited, and that a system solution combined with the necessary legal amendments could make it easier for authorities to intervene in abuses while raising the risk of being caught.

“First and foremost, this is about the working conditions and rights of foreign construction workers in a vulnerable position,” says Kimmo Palonen, chairman of Rakennusliitto. He adds that firm enforcement against breaches of collective agreements and labour law also protects domestic workers and the competitiveness of companies that follow the rules.

Finnish construction sites have required every worker to carry a personal tax number since September 2012. That number establishes who is on site. It does not show what the person was paid, which is what the proposed interface would make visible.