The Customer Liability Act aims to combat the gray economy and prevent the use of subcontractors who do not take care of their obligations towards society. According to the law, the customer must request and the subcontractor must provide the reports listed in the law about their activities.
The Customer Liability Act, officially the law on the customer's reporting obligation and responsibility when using external labor, entered into force at the beginning of 2007. The law has been amended three times since then, and strictures regarding the construction industry have been added to the law at the request of the industry itself.
What should the customer request and what should the contractor deliver?
The customer must request and the contractor must provide the customer with the following information and reports that are no longer than 3 months old:
- An explanation of whether the company is registered in the advance collection register and employer register according to the Advance Collection Act (1118/1996) and the VAT register according to the Value Added Tax Act (1501/1993)
- Trade register extract
- A statement that the company does not have a tax debt entered in the public tax debt register of the Act on the Publicity and Confidentiality of Taxation Information, or a statement from the authority on the amount of the tax debt, if it is less than 10 euros
- Certificates of taking out pension insurance and paying pension insurance premiums or a statement that a payment agreement for overdue pension insurance premiums has been concluded
- Explanation of the collective agreement or key working conditions applicable to the job
- Accident insurance certificate
- Report on the organization of occupational health care
The customer must check this information and explanations before concluding the contract or, at the latest, before starting the work, if the contract contains a cancellation clause, according to which the contract will be canceled if the information required by the Customer Liability Act is not in order when it is presented. If the subcontractor's affairs are in order, a contract can be signed with it. The revised reports must be kept for two years from the end of the agreed work.
No contract if things aren't right
A contract should not be concluded with a subcontractor if the subcontractor has an unorganized tax debt of more than 10 euros. Even a smaller amount of tax debt can be a risk from a financial point of view. The contract should also not be entered into if the subcontractor has not paid pension contributions or if the company's responsible person is prohibited from doing business.
The Trusted Partner program helps
The Reliable Partner service retrieves the information required by the Customer Liability Act on your company's behalf, compiles a Reliable Partner report from it and keeps it up to date. You can find more information about Vastuu Group's Reliable Partner service and other services that make your company's everyday life easier at www.vastuugroup.fi.
Failure to do so may result in charges
Compliance with the law is monitored by the Regional Administrative Office of Southern Finland and its subscriber liability inspectors. The agency can impose a negligence fee of 2–100 euros on the subscriber who broke the law. It can be ordered if no reports have been made at all or if there are deficiencies in them.
Increased negligence fee in the construction industry
In the construction industry, the customer may be charged an increased default fee. This can be done if the contract has been concluded with a company where a person in a dominant position is prohibited from doing business. An increased default fee can also be imposed on the customer when he must have known that the other party does not intend to fulfill his statutory obligations as an employer and a party to the contract or the contract is clearly underpriced.
The amount of the increased negligence fee is 21–100 euros. Payments are determined per contract.
Read more about subscriber liability
Ville Wartiovaara
Executive Vice President, Regional Director
ville.wartiovaara@rt.fi + 358 40 564 7939Talonrakennusteollisuus ry, Uusimaa