Collective agreements stipulate minimum wages and other terms of employment in Iceland.
According to Icelandic law, wages and other terms of employment agreed in collective agreements are minimum terms, regardless of gender, nationality, and period of employment for all workers in the relevant occupation covered by the agreement. This also applies to all employees of enterprises who are outside of the employer organizations or have not themselves entered into collective agreements with the trade unions. Employment agreements between individual employees and employers which stipulate inferior terms and conditions than stated in collective agreements are invalid and not binding to the employee.
The minimum wage for each sector of the labor market is negotiated in collective agreements by the social partners and is therefore not the same for every occupational sector. The minimum wages are determined on grounds of the nature of the work, seniority and education.
The wage scales of collective agreements are generally subject to annual changes, usually on the 1st of January or upon another date that is mentioned in the agreements.
The minimum rates do not always reflect the wages that are actually paid in the relevant sector. This is a feature of the wage formation on the labor market and allows for certain freedom of spot negotiations between individual workers and their employers which reflect market conditions. Information about the market wage rates in a particular sector can be obtained from the trade unions. Another source of information is Statistics Iceland who collect information on a regular basis regarding wages and working hours in various sectors of the labor market.
On the Icelandic Confederation of Labour‘s website, you can find information and useful links for people working in Iceland.
Icelandic Confederation of Labour (ASÍ)
Tel: +354 535 5600
Business Iceland (SA)
Tel: +354 591 0000