Introduction 

When expanding internationally, understanding the legal landscape is critical to protecting your business and your people. Nowhere is this more evident than when comparing labour laws in Finland and the United States. On the surface, both countries offer strong economies and highly skilled workforces. But when it comes to employment law, they couldn’t be more different.

Failing to adjust your approach when moving between these two jurisdictions can lead to serious compliance issues. The US tends to favour employer flexibility, while Finland enforces strict worker protections. For HR leaders and global businesses, understanding these contrasts isn’t just helpful - it’s essential.

Quick Tips

• At-will employment is common in the US but not recognised in Finland.

• In Finland, termination requires cause and notice periods - in the US, termination can often occur without notice.

• Finnish employees have strong collective bargaining rights; US employees typically don’t unless unionised.

• Parental leave and sick leave entitlements are significantly more generous in Finland.

• Avoid copy-pasting US policies into a Finnish context - always localise.

Employment Contracts: Mandatory in Finland, Optional in the US 

In Finland, all employment relationships must have a written agreement outlining job duties, working hours, pay, notice periods, and benefits. This is legally required under the Finnish Employment Contracts Act.

In contrast, written contracts are not mandatory in most US states. Employment is often ‘at-will’, meaning either party can terminate the relationship at any time without cause, notice, or severance. However, this flexibility comes with risk - especially when dealing with international workers expecting clarity and fairness.

From a practical perspective, I always recommend using written contracts in both countries. In Finland, it’s a legal obligation. In the US, it helps set expectations, define roles, and limit disputes.

Termination and Redundancy: Process Matters in Finland 

US employers often find the Finnish approach to termination surprisingly rigid. You must have just cause to terminate an employee in Finland, with specific procedures for performance management and legal requirements for redundancy.

Redundancies in Finland require genuine business reasons, consultation periods, and in some cases, notification to public authorities. The average notice period ranges from 14 days to six months, depending on tenure.

By contrast, US employers can dismiss employees more freely. However, the lack of process can invite wrongful termination claims or reputational harm if not handled with care. Harvard Business Review has noted that employee trust and engagement plummet in organisations with unclear dismissal practices, even where the law allows.

When helping a US client expand to Finland last year, we developed a termination protocol aligned with local law, ensuring legal protection and preserving morale during a restructure. The result? No legal claims, and an increase in employee satisfaction post-transition.

Working Time, Leave, and Benefits: Finland Leads on Protection 

In Finland, employees are entitled to four weeks of paid annual leave, plus additional winter holiday if agreed. Parental leave has recently been restructured to offer 320 days of leave per child, shared equally between parents, with earnings-related pay.

By contrast, the US remains the only OECD country that does not guarantee paid parental leave. Annual leave is not legally mandated at the federal level either - any holiday is typically discretionary.

Sick pay, too, is stronger in Finland. Employees receive full pay for at least the first 10 days of illness, and benefits beyond that are covered by national insurance. In the US, sick leave policies vary by state and employer, with no federal guarantee.

For businesses, this means budgeting for more generous benefits when operating in Finland - but also gaining from a more secure and supported workforce.

A Real Example: Rethinking Policies Across Borders 

I worked recently with a US tech company hiring developers in Helsinki. They initially offered the same PTO and at-will terms they use domestically. We quickly revised their documentation, added statutory benefits, and ran manager training on cultural expectations and legal norms.

Six months later, their Finnish team had the highest engagement scores globally. Localising their approach didn’t just ensure compliance - it strengthened their brand and productivity.

Final Thoughts 

When managing teams in both Finland and the US, there’s no such thing as a one-size-fits-all approach. Employment law is deeply rooted in each country’s social contract, and misunderstanding that can lead to financial, legal, and reputational costs.

Get ahead by planning for localisation, leaning on experts who know the terrain, and treating compliance as a foundation for trust.

What’s next for your global people strategy? 

Book a free compliance check-in or HR audit with ThinkGlobal HR. We can help you navigate international employment laws, assess your risk exposure, and design people practices that work wherever your teams are.