Wages and work hours

During a posted worker's deployment in Iceland he is entitled to minimum wages according to relevant collective agreements. Icelandic regulations regarding maximum work hours and minimum rest periods must also be complied to.

Wages and other wage-related components

According to Act No. 45/2007 on Posted Workers and the Obligations of Foreign Service-Providers, posted workers draw their rights to minimum wages and other wage-related issues from Icelandic collective agreements. December and vacation supplements are categorized as wage-related issues. They are also entitled to over-time payments and the right to vacation pay. In addition, regulations on maximum work hours and minimum rest periods must be complied with.

In the chapter Overview of trade unions and wage tables information about trade unions in Iceland, their wage tables and minimum wage in relevant occupational sectors can be found.

Surveillance of working conditions

Upon registration of a foreign undertaking to the Directorate of Labour, the directorate requests copies of employment contracts of the workers posted in Iceland, to ensure that posted workers’ terms and conditions of employment are in accordance with Icelandic collective agreements during the periods that they work in Iceland.

It is the role of the unions‘ shop stewards of each employer to ensure that collective agreements are respected, including when workers of foreign undertakings are concerned.  If there any grounds for suspicion that the rights of a foreign employee have been breached, the shop steward has the right to review any documents pertaining to the employee‘s wages and other terms and conditions of service. If the company does not have a shop steward then the appropriate trade union should be contacted to review the documentation.

In the event of suspicion of any breach of rights, the appropriate step is to seek the assistance of the shop steward at the workplace and inform The Directorate of Labour. Both parties can investigate the matter and demand rectification. If there is no shop steward at the workplace, the appropriate step is to contact the trade union operating in the area of the relevant field of work and seek assistance.

Work Hours

Work hours are to be according to collective agreements and can differ based on which collective agreement applies. Here you can find a general overview of work hours.

• Daytime Working-Hours: Working-hours should be 40 hours a week or 173.33 hours a month - 37 hours and 5 minutes work-time per week with 35 minutes per day for coffee breaks (20 minutes in the morning and 15 minutes in the afternoon). These hours will be worked during the 5 days of the week from Monday through to Friday, starting between 07.00 and 08.00, for 8 hours a day, ending at 17.00.

• Overtime: Overtime is the time after normal working hours have finished on Mondays through to Fridays and on weekends (Saturday and Sunday). All work performed outside the normal working hours is paid as overtime. The overtime hourly rate  80% added on to the daytime hourly pay.

• Meal breaks: The duration of a meal break varies between sectors of the labour market, ranging from 30 minutes to 1 hour, taken between 11:30 and 13:30. The lunch break is not counted as working time and is therefore unpaid. According to the collective agreement of Tradesmen, the lunch break on weekends is however considered as worked time. Meal breaks during overtime are calculated as working time and paid for with overtime rate. The same applies to coffee breaks during over time hours.

• Coffee breaks: The coffee breaks are usually 35 minutes per day and are paid as worked time. Collective agreements allow for workplace agreements where coffee breaks are skipped or reduced.  Negotiating shorter coffee breaks is thus permissible in which instance overtime begins earlier as per the said break. The same applies to shorter meal brakes.