Concepts and definitions

Basic pay

Basic pay describes task-specific minimum pay, taking into consideration any related additional responsibilities, cost-of-living category of the location of workplace or possible deductions for lack of qualifications. Basic pay does not include personal bonuses, increments for years of service or similar pay components. Basic pay is determined by the tasks of a position holder or employee and the conditions of collective labour agreements. Basic pay is often determined by the degree of competence required of the position holder or employee.

Bonuses and allowances not paid in each pay period

Bonuses and allowances not paid in each pay period are such as performance-based bonuses, holiday bonus and holiday supplement and seniority increments paid in some hourly paid fields. Payment of one-off pay components can also be based on collectively bargained agreements.

Structural statistics on wages and salaries:

Holiday supplement paid for days off not taken is not included in these bonuscomponents in the structural statistics on wages and salaries.

Index of wage and salary earnings:

The index of wage and salary earnings measures the development of earnings from regular working hours regardless of the mode of payment. Components paid on the basis of performance are included in the earnings concept so that they are divided evenly over the whole calendar year. Similarly, bonuses and allowances not paid in each pay period based on collective agreements are evenly divided for the whole year. All these components belonging to the concept of index of wage and salary earnings, such as holiday bonuses are not included in data on wages and salaries used in the calculation of the index, but they are taken into consideration in index calculation only in case changes in their relative share are agreed in collective bargaining. In the index of wage and salary earnings contractual pay increases paid retrospectively are also taken to the quarter when they were earned.

Labour cost survey:

In the concepts of the labour cost survey compensations for termination of an employment relationship belonging to bonuses and allowances not paid in each pay period are included in social costs.

Labour cost index:

In the labour cost index bonuses and allowances not paid in each pay period also include contractual pay increases paid retrospectively from previous pay periods. The labour cost index also contains incentive stock options according to their exercise value.

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Bonuses and allowances not paid in each pay period are not published in the statistics on private sector and local government wages and salaries. These components are not included in the index of regular earnings.

Collective agreement sector

Collective agreement sector is determined in the collective labour agreement applied in the employment relationship concerned. In the municipal sector the collective agreement sectors are specified in the main contract between the Commission for Local Authority Employers and employee organisations. A collective labour agreement is an agreement between an employee organisation and an employer or an employer organisation on the sector-specific terms of employment. Among others, the pay, working hours, vacations and other benefits that apply within the scope of the agreement are agreed on in the collective agreement. The agreements are often sector specific, but are also bound by the occupational status of the wage or salary earner concerned and are concluded for a fixed period.

Employee

A wage and salary earner (employee) is a person, who has an employment relationship with an employer and who is compensated for work performed. Wage and salary earners are either salaried employees or workers of the employer.

In statistics on wages and salaries, wage and salary earners are as a rule not divided into salaried employees and workers. A division can, however, be made according to profession or pay system. In statistics on wages and salaries, entrepreneurs paying their own salaries are not classified as wage and salary earners, as their earnings usually differ too much from the earnings of other similar wage and salary earners. In these statistics a single wage and salary earner may have several employment relationships that are, however, all treated as separate instances of wage and salary earner in the statistics.

Self-employed persons who pay even part of their earnings as salary to themselves are recorded as wage and salary earners in the labour cost statistics.

Employer sector

Employer sector describes the structure of the labour market and is determined by the decision-making unit. The classification of employer sectors used in statistics on wages and salaries and in statistics on labour costs is a national adaptation of the Classification of Sectors that is used in economic and social statistics (Classification of Sectors 2000).

The classification used in statistics on wages and salaries has the following structure:

Local government sector

Operating units of municipalities and joint municipal boards, and municipal enterprises

Central government sector

Agencies and institution financed from the State budget

Private sector

Private enterprises, enterprises with central or local government majority holding and state enterprises

Non-profit corporations, parishes, and organisations and foundations are also included in the private sector in statistics on wages and salaries.

The structure of the classification of sectors used in statistics on labour costs and in the labour cost index is similar to that of the classification used in statistics on wages and salaries.

In the index of wage and salary earnings, non-profit corporations, parishes and organisations form a separate employer sector of their own (Others).

Full-time

Structural statistics on wages and salaries:

In structural statistics on wages and salaries, the division into full-time and part-time employment is based on regular weekly working hours. In these statistics, employment relationships with regular weekly working hours exceeding 90 per cent of the general working time in the industry are defined as full-time. It has not been possible to define employment as full-time or part-time for wage earners whose regular working hours are not known. This may be due to non-reporting or irregular working hours of the person in question. For public sector teachers, full-time and part-time employment has been defined on the basis of the conditions of the employment relationship. In the structural statistics on wages and salaries, private sector teachers whose weekly teaching duty is at least 16 hours are defined as working full-time.

Statistics on private sector wages and salaries:

For private sector monthly wage earners, the definition of full-time employment is based on weekly working hours, as in the structural statistics of wages and salaries. In these statistics, wage and salary earners whose regular weekly working hours exceed 90 per cent of the general working time in the industry are defined as working full-time.

Information on other wage and salary earners' full-time employment is obtained through inquiries or defined according to the employment relationship. If a wage and salary earner's regular weekly working hours are not known, also information on earnings is used to define full-time employment.

The distinction between full-time and part-time employment is not made separately for private sector hourly wage earners.

Statistics on public sector wages and salaries:

For wage and salary earners in the public sector, full-time and part-time employment is defined on the basis of the character and conditions of the employment relationship. Information on full-time and part-time employment is usually obtained through inquiries.

Labour cost survey:

In statistics on labour cost, an employee whose working hours are specified in the collective agreement for government employees or the collective agreement, or the regular working time of the unit in question, is defined as working full-time.

Cf. Part-time

Hourly wage earner

The earnings of an hourly wage earner are mainly based on the hours actually worked. In addition, an hourly wage earner may have earnings for working time not worked. Compensation for hours worked and hours not worked can be paid several times a month. An hourly wage earner is usually a worker. The pay system is determined by the collective labour agreement.

Hours worked

Statistics on wages and salaries:

In statistics on wages and salaries, statistics on earnings in the industries which pay hourly wages are compiled for hours actually worked. Hours actually worked refers to the working time an employee has spent on his/her actual duties. Hours actually worked include time and piece rate work and contract work hours as well as Sunday and overtime hours. Working hours are based on the Working Hours Act.

Labour cost survey:

Hours actually worked refer to the working time an employee has spent on his/her actual duties. They also include Sunday and overtime work. Hours actually worked include time spent in training, but not unpaid overtime. In labour cost statistics, hours actually worked can be defined also as paid hours minus paid leave.

Monthly wage earner

Monthly wage earners are remunerated for work performed on a monthly basis. Earnings are usually based on one month's working time and tend to stay the same from month to month. Monthly wage earners are normally salaried employees. The pay system is determined in the collective agreement.

Occupation

In statistics on wages and salaries, descriptions of occupations of wage or salary earners are based on field-specific titles of occupations, posts and tasks, and on the Classification of Occupations of Statistics Finland (Classification of Occupations 2001). The approximate number of the used field-specific occupational titles is 15,000.

In respect of the private sector the occupational titles used in statistics on wages and salaries derive from the nomenclature of occupations and tasks of the fields covered by the collective labour agreements of the Confederation of Finnish Industries EK, the nomenclature of tasks of Kirkon työmarkkinalaitos (labour market organisation of the Church) and the nomenclature of occupations of Näyttämöväen Vanhuudenturvasäätiö (foundation for pension security of stage and screen employees). The titles of occupations and tasks in the local government sector are based on the Local Government Pensions Institution's classification of occupations. The titles of occupations and tasks in the central government sector comply with the titles of occupations or tasks of letters of appointment or collective labour agreements.

The occupations in statistics on wages and salaries are classified basing on these nomenclatures of occupational titles by taking into consideration the employer sector, educational qualification and industry of the wage and salary earner. Field-specific titles of occupations or tasks are not published in statistics on wage and salary structures, where only the classification of occupations is used in describing occupations.

Part-time

Structural statistics on wages and salaries:

In structural statistics on wages and salaries, the division into full-time and part-time employment is based on regular weekly working hours. In these statistics, employment relationships with regular weekly working hours that are more than 10 per cent shorter than the general working time in the industry are defined as part-time. It has not been possible to define employment as full-time or part-time for wage and salary earners whose regular weekly working hours are not known. This may be due to either non-reporting or irregular working hours of the person in question. For public sector teachers, full-time and part-time employment has been defined on the basis of the conditions of the employment relationship. In the structural statistics on wages and salaries, private sector teachers whose weekly teaching duty is less than 16 hours are defined as working part-time.

Statistics on private sector wages and salaries:

For private sector monthly wage and salary earners, the definition of part-time employment is generally based on weekly working hours, as in the structural statistics of wages and salaries. In these statistics, wage and salary earners whose regular weekly working hours are over 10 per cent shorter than the general working time in the industry are defined as working part-time.

Information on other wage and salary earners' part-time employment is obtained through inquiries or defined according to the employment relationship. If a wage and salary earner's regular weekly working hours are not known, also information on earnings is used to define part-time employment.

The division between full-time and part-time employment is not made separately for private sector hourly wage earners.

Statistics on public sector wages and salaries:

For public sector wage and salary earners, full-time and part-time employment is defined on the basis of the character and conditions of the employment relationship. Information on full-time and part-time employment is usually obtained through inquiries.

Labour cost survey:

In statistics on labour cost, an employee whose working hours are shorter than the working hours specified in the collective agreement for government employees or the collective agreement, or the general working time of the unit in question, is defined as working part-time.

Cf. Full-time

Regular wages

Regular wages for each pay period include

  • basic pay
  • supplements based on duties, professional skill, years of service etc.
  • supplements based on location and conditions of workplace
  • premium pay
  • performance-based pay components for salaried employees, workers' performance-based earnings
  • taxation value for fringe benefits
  • (in structural statistics on wages and salaries also pay for working hours not worked).

Regular wages do not include one-off items, such as holiday and performance bonuses. The concept of regular wages including performance-based bonuses is, however, also used in statistics on wages and salaries.

Regular wages are used in all statistics on wages and salaries, but the content may vary according to the statistics. In statistics on hourly wages, for example, regular wages include wages for time and piece rate work and contract work for the regular working time as well as the basic component of Sunday and overtime pay, but not the premia.

Cf. Total earnings

Total earnings

Total earnings describe the wages paid for regular working hours and other working hours, such as overtime or extra work. Cf. Total working hours.

Total earnings for each pay period include

  • basic pay
  • supplements based on duties, professional skill, years of service etc.
  • supplements based on location and conditions of workplace
  • premium pay
  • performance-based pay components for salaried employees, wage earners' performance-based earnings
  • taxation value for fringe benefits
  • earnings for extra and overtime work
  • in part also eventual compensation for on-call or urgent work
  • other irregularly paid supplements
  • (in structural statistics on wages and salaries also pay for working hours not worked).

Total earnings do not include one-off items, such as holiday and performance-based bonuses.

In statistics on wages and salaries, the concept of total earnings including performance bonuses is also used.

The concept of total earnings is used in all statistics on wages and salaries, but its content may vary according to the statistics. In statistics on private sector hourly wages and salaries, for example, total earnings include earnings from regular working hours as well as Sunday and overtime pay premia.

Cf. Regular wages

Type of employment relationship

Type of employment relationship describes the legal relationship between an employee and employer. In statistics on wages and salaries employment relationships are referred to as either permanent /valid indefinitely or fixed-term. An employment relationship may also concern specific employee categories such as trainees, trainees on apprenticeship contracts, persons with disabilities or those employed with employment promotion subsidies.

The data is usually directly obtained from inquiries for statistics on wages and salaries. In statistics on the structure of earnings, data on persons employed with employment promotion subsidies are supplemented by data obtained from the register of job seekers of the Ministry of Employment and the Economy.

Contractual employment relationship is the corresponding concept referred to in the statistics on wages and salaries in the private sector.

Cf. atypical employment in the Labour Force Survey (fixed-term and/or part-time).

Usual weekly working hours

Information on wage and salary earners' regular weekly working hours is usually collected in connection with wage inquiries. Regular weekly working hours are based on the Working Hours Act and are often in line with a specific working time system or working time mode. Sometimes regular weekly working hours can be agreed on separately and they may differ from the general working time of the industry. In the case of teachers, regular weekly working hours equal the number of hours on which weekly pay is based.

In the private sector, regular weekly working hours must average out to 40 hours per week within a reference period defined in the collective agreement. For public sector wage and salary earners with office working hours, average weekly working hours are 36.25 hours a week, and for those with general working hours 38.25 hours a week.

In structural statistics on wages and salaries, the regular 40-hour week of workers in industries which pay hourly wages has been shortened with industry-specific solutions, according to the so called "pekkassopimus". The basic consideration has been to secure the earlier income level. The shortening of working time with separate days off has been taken into account in determining regular weekly working hours in such a way that the regular weekly working hours for workers with a 40-hour week are 37.89 hours. The shortening of the working time of municipal hourly wage earners has been executed by shortening regular weekly working hours, not by adding paid or unpaid days off.

Regular wages are based on regular weekly working hours. Cf. Regular wages

Cf. Total working hours

Referencing instructions:

Official Statistics of Finland (OSF): Local government sector wages and salaries [e-publication].
Helsinki: Statistics Finland [referred: 24.11.2017].
Access method: http://www.stat.fi/til/ksp/kas_en.html

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