Supervision of the duty to take out workers’ compensation insurance

The Workers’ Compensation Center (TVK) has a legal obligation to supervise that employers meet their duty to take out insurance.

Insurance companies supervise that the employer who has taken out an insurance policy from the company fulfils their statutory obligations concerning insurance coverage. This includes, for example, monitoring payroll amounts in order to ensure that the wages and salaries reported by the employer are accurate.

The labour protection authority also supervises employers to ensure that they have a valid statutory accident insurance. The labour protection authority notifies TVK without delay where there is reason to believe that the employer has not fulfilled its insurance obligation.

Supervisory measures

Supervisory measures employed by the Workers’ Compensation Center include both preventive and retrospective actions. Preventive action includes, for example, informing employers about the duty to take out insurance.

Retrospective actions refer to the mass supervision carried out by TVK using the data saved in the insurance register. TVK maintains a register of employers who have taken out statutory compulsory insurance cover for their employees. TVK receives information on paid wages and salaries from the Incomes Register.

TVK collaborates and shares information with other supervisory bodies, such as the Finnish Centre for Pensions, the Employment Fund, Regional State Administrative Agencies, and the Shadow Economy Investigation Unit.

In addition, TVK investigates the cases that have triggered a warning, such as issues flagged in processing claims of occupational accidents or reported through whistleblowing or surveys.

Sanctions arising from negligence

Employers that neglect their insurance obligations must pay a fee that corresponds to a reasonable insurance premium for the period of such failure (a payment corresponding to the insurance premium). The fee is imposed for the current and five previous calendar years.

Penalty fee

The employer is liable to pay a penalty fee. The penalty fee is up to three times the amount of the fee corresponding to the insurance premium. In most cases, the amount of penalty fee is equal to the fee that corresponds to unpaid insurance premiums.

The amount of penalty fee depends on

  • the duration of the neglect,
  • whether the neglect is intentional
  • whether the neglect is recurrent
  • the amount and risk of uninsured work.

The penalty fee may be waived when the employer is a natural person, the negligence cannot be regarded as intentional, and the imposition of a penalty fee would be unreasonable. In the case of legal persons – in other words, companies – the penalty fee cannot be waived.

Determining the amount of penalty fee

TVK submits an application to the State Treasury in order to determine the fee corresponding to the insurance premium and the penalty fee.

The State Treasury determines whether the employer has failed to fulfil the insurance obligation and orders the defaulting employer to pay the fees to TVK.

The employer may appeal the State Treasury’s decision by lodging an appeal in writing to the Employment Accidents Appeal Board.

Excess in claim events

If TVK pays compensation for a claim event that has occurred during work for an employer who has neglected to pay compensation, TVK will charge the employer for the actual cost of medical treatment for which compensation must be paid. The excess which the employer is liable to pay may be up to 6 060 euro per claim event in 2024.

Enforced insurance

If an employer fails to comply with the insurance obligation and does not rectify the failure within the given time limit, TVK will, at the expense of the employer, take out the compulsory insurance provided by its chosen insurance company.

Other possible sanctions

The Criminal Code also provides for sanctions for accident insurance fraud, and employees may also lose their entitlement to compensation if the failure to take out insurance has been planned in collaboration with the employer.