1. Some English terms explained
Freelancer
Freelancers are people who simultaneously have several employers or principals. Freelance work typically involves a large number of temporary assignments. Freelance work can be carried out as an entrepreneur, light entrepreneur or a private person without a Business ID.
Freelancers can also earn income from using their intellectual property rights (e.g. copyrights), licences or compensation for selling licences.
Freelancers working without a Business ID can voluntarily enter the prepayment register, which can make it easier to get assignments. If the relationship between a principal and a freelancer constitutes an employment relationship, the principal is responsible for remitting tax prepayments and paying the employer’s health insurance contributions. In such a situation, it does not matter whether the worker is on the prepayment register.
There used to be a separate freelancer tax card in addition to the main and subsidiary income tax card but today, all salaried workers’ tax cards only have one income ceiling and can be copied as such.
For decades, the term freelancer has been in widespread use in such fields as art, culture and media. Originally, freelancer meant a medieval mercenary (from the English words free and lance).
Gig worker
Colloquially, gig workers are people who undertake assignments and temporary work either in short-term employment relationships, as light entrepreneurs or as entrepreneurs. They operate like freelancers.
Grant recipient
Grant recipients are people who have been awarded a grant, a stipend or an award. They can also be a part of a group that has been collectively awarded a grant. Some grants are tax-exempt.
A grant is tax-exempt income, for instance, when it was awarded for studies, or academic or artistic activities. Moreover, grants have to be gratuitous to the payer: they cannot obtain economic gain or any other type of benefit from awarding grants. If a grant is awarded by an employer, the payment is usually compensation for performed work. In that case, despite being called a grant, it is technically salary.
Light entrepreneur
Light entrepreneurs are people who undertake assignments and invoice their customers through invoicing services. Invoicing services pay light entrepreneurs their work compensation as salary. In statistics, light entrepreneurs are salaried workers in the employment services industry.
“Light entrepreneur” is actually a marketing term. It is also used when somebody starts a company as a private trader through a service provider that makes the business administration “light” to them for a fee.
Necessity entrepreneur
A necessity entrepreneur is someone who has become an entrepreneur against their will. You can become a necessity entrepreneur, for instance, after being let go from your previous salaried work. The category of necessity entrepreneurs also includes people who have become entrepreneurs voluntarily but would prefer to be salaried workers, and entrepreneurs who are old enough to retire but unable to liquidate their company.
The term has been criticized because unemployed people are not forced to become entrepreneurs in Finland. The proposed alternative is “involuntary entrepreneurship”.
Typical to necessity entrepreneurs is that they have not considered entrepreneurship as an option. They end up as entrepreneurs after facing a disappointment in the working life, such as unemployment. The disappointment is visible in necessity entrepreneurs’ careers and differentiates them for “regular” entrepreneurs.
In contradiction to the circumstances described above, necessity entrepreneurship also refers to situations where entrepreneurship is someone’s only option to make a living.
Seasonal worker
In some industries, business may periodically get busier, either predictably or unpredictably (cf. the Christmas season and a pandemic). In such situations, employers may need temporary workers for tasks for which the regular staff do not have the time.
Sole entrepreneur
Sole entrepreneurs are full-time entrepreneurs who run economic activities on their own in various forms of business. Sole entrepreneurs do not have employees. In some contexts, also light entrepreneurs and freelancers are categorised as sole entrepreneurs.
Temp(orary worker)
Temp is a colloquial term for people who have signed a zero-hour contract with a personnel service company. These companies lease staff to various employers.
In temporary work, a company in need of workers makes a deal with a personnel service company and is provided with temporary staff. The company that is in need of workers is called a user company. The personnel service company leases its employees to the user company or recruits a new worker based on the assignment and leases them.
In temporary work, workers are employed by personnel service companies but work for user companies. For employees, this means that they sign an employment contract with a personnel service company although they work at user companies. Personnel service companies pay the employees’ salaries and take care of all the other employer’s obligations, but user companies instruct and guide the leased workers. The user company also oversees the employee’s work.
In principle, legislation does not restrict user companies’ use of leased staff. The Act on the Contractor’s Obligations and Liability when Work is Contracted Out decrees certain obligations to user companies when leased workers are used for companies’ regular activities. In addition, the collective agreements in certain industries determine when contracted labour can be used. If the use of external workforce is not restricted in this way, user companies can use leased personnel without any special reason.
In temporary work, no payments can be collected from employees nor can any fees be deducted from their pay.
Zero-hour contract
A zero-hour contract refers to an employment contract in which the minimum amount of working hours is set at zero. The weekly working hours can be presented, for example, in the form “0–40 hours”. In Finland, the term is not juridical; in legislation, this kind of contract is referred to as an “employment contract with variable working hours”. A zero-hour contract can be fixed-term or permanent.
The weekly working hours are flexible down to zero hours, that is, unemployment, according to how many hours the employer has to offer. Still, a zero-hour contract is not the same as gig work or unemployment. With a zero-hour contract, you are continuously in an employment relationship even if you had no work. In gig work, you sign a new contract for each new gig.
Zero-hour contracts are prohibited in the collective agreements of some industries, such as those for the commercial, tourism and restaurant sectors.
2. Some Finnish terms explained in English
Some of the concepts addressed in this Guidebook are Finnish realia, i.e. specific to the Finnish system only and therefore sometimes lacking a precise English counterpart. In the Guidebook text, such concepts and terms have been translated as comprehensibly and descriptively as possible, but this section offers further explanations on some key terms which you may encounter when dealing with these matters in the Finnish context, on the linked pages, for example.
Company forms:
- Avoin yhtiö (ay)
– partnership - Kommandiittiyhtiö (ky) – limited partnership
- Osakeyhtiö (oy) – limited company; limited liability company; joint-stock company
- Osuuskunta (osk) – cooperative association
- Toiminimi (T:mi); yksityinen elinkeinonharjoittaja – literally, ”toiminimi” means ’business name’. As a company form, this refers to a registered company established by one person. In this Guidebook, it has been translated into English as private trader, but in other contexts you may also see such translations as proprietorship, private entrepreneur, or private person carrying on trade.
Other terms:
Ammatinharjoittaja – ‘a person carrying on trade’
Elinkeinonharjoittaja – ’a person carrying on business operations’
Itsensä työllistäjä – ’a person employing themself’
All of these terms refer to what is typically called a self-employed person in English. There are slight differences in the meanings of the Finnish terms, and they are used in slightly different contexts but in practice, they are very close to each other.
TE-palvelut (työ- ja elinkeinopalvelut); TE-toimisto – Finnish public employment and business services.
TES (työehtosopimus) – Collective bargaining agreement. An industry-specific agreement that outlines the primary terms and conditions of work, including minimum pay, for the industry concerned.
Toimeksiantosuhde – This refers to a relationship between a service provider and a customer that concerns one or several individual assignments and is not an employment relationship. In this Guidebook, it has been translated into English as contractor relationship, but in other contexts you may also see such translations as commission relationship or principal-contractor relationship.
YEL (Yrittäjän eläkevakuutus) – The self-employed person’s pension insurance. Despite the name, this insurance covers the entire social security of the self-employed.