Akava affiliates also oversee issues of concern for freelancers

Tuire Torvela, Legal Adviser for Akava Special Branches, also provides advice for freelance members. She has particularly received requests for advice from freelancers working on the basis of a freelance tax card or business name. Freelancers working on a tax card can be employed within a traditional employment relationship or a so-called nonwage work compensation relationship with a commissioning party.


It is often difficult to draw the line as to what is considered an employment relationship and what is not. This ambivalence drums up a lot of questions, says Torvela.


If the work is carried out within an employment relationship, the employer is obliged to pay the employee’s pension security. If the work is not done within an employment relationship, and the freelancer has no company of his/her own, then the one who has commissioned the work can pay the freelancer a nonwage compensation. The commissioning party shall withhold the taxes on the nonwage compensation, but is not obliged to pay social security and pension contributions for the compensation. Anyone receiving nonwage compensations must take out a YEL insurance policy, if the total compensations exceed 7,303.99 euro per year.


– Additionally, those working on the basis of a freelance tax card seek advice on issues related to the determination of their wages; in other words, those issues that should be considered when determining the amount of wages, Torvela says.


For example, a freelancer who invoices a total of 3,000 euro per month, may only receive gross earnings of 1,500 euro, if the wage-related fees and operational expenses eat up half of what's earned. The share varies according to the total amount of work-related expenses accrued to the freelancer. In addition to the pension contributions for entrepreneurs, such expenses include, e.g., rent for an office, and work-related equipment and materials required for work.


– Advice is also requested concerning the content of commission agreements.


The guide for freelancers (Free-sopimuksen ABC opas, in Finnish), jointly drawn up by the Federation of the Finnish Media Industry and the Union of Journalists in Finland, states that freelance agreements generally state, at least, the timetables and wages, and often on other issues, such as different copyright issues. Torvela has been contacted by freelancers working under their own business name, particularly on issues concerning the content of agreements and their interpretation. The law does not require that commission agreements be made in writing, so verbal agreements are also considered to be valid. However, in order to facilitate the resolution of possible disagreements, it is recommended that agreements be made in writing.


–Freelancers with business names also seek advice on matters other than commission agreements, such as on lease agreements for offices. They also ask about issues related to bidding competitions, procedures related to the collection of overdue payments and matters concerning employee recruitment.

Insurance premiums and pension contributions must be accurate and appropriate

Tuire Torvela emphasises matters related to social security as common problems for both freelancers who work using a tax card and those with a business name. Employees are, for example, statutorily insured against occupational accidents, but freelancers have to insure themselves, if they just wish to do so.


– The unemployment security of self-employed entrepreneurs or those with small businesses, in particular, is a key problem in terms of social security, and it should be brought closer to the level of wage earners. The impact of the YEL income determined by entrepreneurs on the overall social security of the entrepreneur is also problematic, claims Torvela.


The sickness allowance and pensions are based on a YEL level that an entrepreneur can determine independently. If the YEL premium seems too large, it is easy to downscale the income amount in order to lighten the payment load. Such downscaling will, however, be reflected in the level of all benefits and contributions.


- Otherwise, the problems are more or less field-oriented in nature. For some fields, the terms and conditions of the subcontracts of foreign commissioning parties are problematic, and for others, agreements on copyright may be a problem. Some struggle with bidding competitions and the related terms and conditions thereof.


When relinquishing copyright, one should pay special attention to the extent of the copyrights relinquished, and this extent should be considered in the compensation paid. Translators have suggested that more just and fair criteria should be used in bidding competitions for translation services, rather than putting too much weight on the price.


– Generally speaking, the disadvantages of freelance work concern the fluctuation and uncertainty of income, and working alone.


Freelance work also provides a flexible alternative for those commissioning such work; it enables employers to purchase work assignments without any commitment to regular salary payments. In such cases, it is essential that freelancers have multiple customers to avoid being dependent on any single commissioning party.


–Freelancers view the positive side of their work as the freedom connected with self-employment and the opportunity to make use of their own expertise.

  • Text: Mia Hemming

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