AFL starfsgreinafélag

Work in Iceland

The right of foreign nationals to work in Iceland
According to the provisions of the EEA Agreement on the free movement of workers wage earners from Member States of the European Economic Area (EEA) are entitled to enter into contracts of employment in Iceland without a work permit. The following are Member States of the EEA: Iceland, Austria, Belgium, the United Kingdom, Denmark, Finland, France, Greece, the Netherlands, Ireland, Italy, Cyprus, Liechtenstein, Luxembourg, Malta, Norway, Portugal, Spain, Sweden, and Germany. Comparable rules apply for Switzerland. The rules regarding the free movement of workers do not enter into force with respect to the citizens of Estonia, Latvia, Lithuania, Poland, Slovakia, Slovenia, Czech Republic, and Hungary until 1 May 2006. Citizens of those countries must have work permits as do workers from states not members of the EEA. The rules regarding foreign nationals who are not citizens of Member States of the EEA stipulate that their employer must apply for work permits and residence permits for them prior to their arrival in Iceland.

Icelandic language courses
According to law employers and trade unions must provide employees holding temporar work permits, with information regarding basic courses in Icelandic for foreigners, courses in civics, and other learning courses that may be available for the employee and his family.

Wages and other wor{ing Conditions
Trade unions enter into collective bargaining agreements regarding the wages and other working conditions for wage earners on the labour market. Collective agreements made between trade unions and employers provide for the minimum working conditions in the industry in question throughout the district of the trade union in question. Collective agreements have provisions for daytime and overtime wages, they regulate the payment of wages and the issuance of pay statements (pay-slips), paid sickness and accident leave, maximum working time and daily time of rest, holiday allowance and special holidays, conditions in the work place, notice of termination, contributions to union sickness funds, holiday allowance accounts, occupational education funds, pension funds, and other contributions. The provisions of collective agreements regarding these issues are minimum working terms, irrespective of gender, nationality or period of employ-ment for all wage earners in that particular industry. Contracts of employment between individual wage earners and employers stipulating worse working conditions than those provided for in the collective agreements are void.

Contract of employment
Within a period of two months from the time an employee starts working the
employer must draw up a written contract of employment. A contract of employment must include information regarding the names of the contracting parties, the employee’s place of work, a short job description, wage terms, and the job ratio in addition to pension fund and trade union membership. If a wage earner comes from a nation outside the EEA (or from one of the 8 new Member States) a contract of employment must accompany the employer’s application for the wage earner’s work permit.

Pay statement
An employee is entitled to receive a pay statement (pay-slip) when wages are paid, which includes a breakdown of the wage calculation. Furthermore all deductions must be itemized, e.g. the withholding tax. It is important for the wage earner to get a copy of the pay statement because if the employer does not pay tax, pension fund contributions, membership fees to the trade union etc. the
wage earner may run into problems if he does not have the pay statement as evidence that his personal income tax has been deducted.

Working time
The statutory workweek is 40 hours from Monday to Friday. In some sectors the trade unions have entered into wage contracts for shorter workweeks, e.g. for office and commercial workers. The lunch and coffee breaks for workers are as a minimum 30 minutes but generally they are 60 minutes. Usually there are two 20 minutes coffee breaks during day work, generally taken before and after noon.


Periods of rest
Workers are entitled to a minimum consecutive period of 11 hours of rest during
each 24-hour period and at least one day of rest per week immediately succeeding the daily minimum period of rest. The weekly day of rest must as far as possible fall on a Sunday. The maximum working time per week shall generally not exceed 48 active working hours including overtime.

Illness and accidents
A worker is entitled to wages paid by his employer for a limited period of time in case of absence from work due to illness or accidents occurring in the worker’s free time. During the first year of service with an employer a worker earns as a rule 2 days of paid sickness leave for each month worked. In the event that a worker suffers a work related accident he will be entitled to wages paid by his employer for a period of three months in addition to earned paid sickness
leave. A worker must notify the employer of any illness, and the employer may request that the worker submit a health certificate. Employers are required to insure their employees against death, permanent disability, or against temporary disability caused by work related accidents or occurring in the course of their normal route from their home to the place of work or from the place of work to their home.

Holidays and holiday allowance
All workers are entitled to take an annual paid leave from work. The minimum statutory holiday entitlement provides for a period of two working days for each working month during the past holiday allowance year. The minimum holiday allowance is 10.17% of whole wages. Collective agreements frequently contain provisions on broader leave entitlement.

Occupational pension funds
All wage earners are required to ensure their rights to a pension through occupational pension fund membership from the age of 16 to 70. The minimum pension fund contribution is calculated on top of whole wages and compensation for any kind of work, job and service. The minimum contribution is 12% of the contribution base of which 4% are deducted from the worker’s wages and 8% are added by the employer. In addition to this a worker may pay 2-4% into a supplementary contribution scheme (public or private pension fund) in that case the employer’s counter-contribution is 2%.

Equal status of women and men
Women and men who are employed by the same employer are entitled to equal pay and equal terms for equal-value and comparable work. Terms in addition to pay , means pension rights, entitlement to wages paid in case of absence due to illness and any other terms or benefits that may be given monetary value.

Personal income tax
Employers are required to deduct personal income tax and municipal income tax from an employee’s wages every month and return the withholding tax to the local Inland Revenue office. The 2011 tax ratio for withholding taxes is 37.31, 40.21, 46.21%depending on the amount. Wage earners are entitled to a tax free personal allowance, which is deducted from earnings before tax is calculated. The personal allowance for 2011 is ISK 44.205 per month. In order to use his personal allowance a wage earner must submit a tax card to his employer. Workers must apply for a tax card from the local Inland Revenue office. EEA citizens and others who do not need a work permit will receive a tax card after a residence permit has been issued.

Certified occupational qualifications
A worker’s entitlement to hold certain jobs is frequently restricted by statutory requirements to persons holding professional degrees or who are specially authorized to work in a particular field or area. Furthermore in some fields of work employees are required to have special job-related certifications, such as an advanced driving licence or a driving licence for industrial machinery. The EEA Agreement provides for the entitlement of foreign workers to have their professional degrees, occupational qualifications and work experience acquired in other EEA states accredited in Iceland according to the applicable laws and regulations.

Trade unions, union membership dues and shop stewards
Trade unions negotiate for the wages and other working terms for wage earners on the private labour market. Employers are required to deduct membership dues from employees’ wages and return the dues to the respective union. The membership fee is remuneration for negotiating a collective agreement on wages and other working terms, and it will cover the cost of daily services to members and support the care taking of union interests towards employers. All employers are required to pay a contribution to the respective union sickness fund and holiday allowance account according to the terms of collective agreements. The trade union shop stewards have the task to oversee that employers abide by the collective agreements and that the social and civil rights of employees are not violated. Employees must contact the union shop steward at their place of work with their complaints against the employer. The trade unions are independent and are not subject to government authority; all communication between employees and the union shop steward is confidential.

Icelandic Confederation of Labour (ASI)
Sætún 1, 105 Reykjavík,
Telephone: 53 55 600 Fax: 53 55 601

Federation of General and Special Workers
Sætún 1, 105 Reykjavík,
Telephone: 562 6410, Fax: 552 6830

Federation of Skilled Construction and Industrial
Workers (Samidn)

Borgartún 30, 108 Reykjavík,
Telephone: 535 6000, Fax: 535 6020

Union of Icelandic Electrical Workers (RSI)
Stórhöfði 31, 110 Reykjavík,
Telephone: 580 5200, Fax: 580 5220

The Commercial Federation of Iceland (LIV)
Kringlan 7, 103 Reykjavík,
Telephone 588 1300, Fax 5101727

The Icelandic Federation of Food and Restaurant
Workers (MATVIS)

Stórhöfði 31, 110 Reykjavík,
Telephone 580 5200, Fax 580 5220

Federation of Icelandic Seamen (SSI)
Sætún 1, 105 Reykjavík,
Telephone 561 0769, Fax 561 0774

Government Institutions

Statistics Iceland and the National Registry
Borgartún 24, 150 Reykjavík
Telephone, 569 2900 Fax, 569 2949
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Individuals who have received residence permits
must register their domicile at the National Registry
after arrival in Iceland

The Icelandic Directorate of Immigration
Skógarhlíð 6, 105 Reykjavík
Telephone 510 5400 Fax, 510 5405
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The Icelandic Directorate of Immigration issues
residence permits.

Directorate of Labour
Hafnahúsinu Tryggvagötu, 150 Reykjavík
Telephone, 515 4800 Fax, 51 1 2520
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The Directorate of Labour issues work permits.

Further information in your own language
The Intercultural Centre
Hverfisgata 18, 101 Reykjavík
Telephone, 530 9300 Fax, 530 9301
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The Intercultural Centre provides consulting, education, interpretation and translation services and information with the aim of facilitating the adjustment of people of foreign descent to Icelandic society.

The Multicultural Centre
Árnagata 2-4, 400 Ísafjörður, This email address is being protected from spambots. You need JavaScript enabled to view it.
Telephone, 450 3090 Fax, 450 3005
The task of the Multicultural Centre is to facilitate interrelations between people of different roots and to enhance services to foreign people living in Iceland.