Working in Iceland - overview

Workers in Iceland have the same rights regarding wages and other benefits negotiated by the parties to the labour market.

It is unauthorised in Iceland to negotiate worse terms than general wage contracts provide.

You can get pamphlets at the Icelandic Confederation of Labour (ASÍ) on rights and obligations on the labour market (www.asi.is).

Employment contract

Citizens of EEA states who work for two months or longer for the same employer have the right of a written employment contract. An employment contract is to contain name, information of employer, information on where the work is done, wages, employment period, resignation clauses and membership in a pension fund and union. Further information can be found on the Icelandic Confederation of Labour's website (www.asi.is), the Directorate of Labour (www.vinnumalastofnun.is) and the websites of specific unions.    

Important to note

  • That wages are in accordance to wage contracts.
  • That work hours are not longer than permissible by law and wage contracts.
  • That leave is paid in accordance with law and wage contracts.
  • That wages are paid for sickness or injuries.
  • That you receive a payslip when wages are paid.
  • That an employer pays taxes on your wages.
  • That your employer pays dues to pension funds and unions.

Pay slips

A pay slip is a written confirmation of the amount of wages and dues that an employer has subtracted from wages, such as taxes and pension dues.

Bank account

Most employers pay wages directly into a bank account. Banks make different demands to those who apply for a bank account. All banks however have the requirement that the applicant has an id. number and identification with a photo.

Legal holidays

According to most wage contracts those who have fixed wages are to receive wages for legal holydays that are on working days, just as if it was a regular working day, although there is no work on that day. There is no payment for fixed overtime on these days. If you work on a holiday there is a special payment for that.

Pension fund       

All workers pay dues to a pension fund. They receive payments from the pension fund when they stop working due to age or disability. An employer is to retain a certain part of a worker's wages called dues, but that is the part that is paid to the pension fund, with complimentary contribution from the employer.

Problems at the workplace

In case of problems during communications at a workplace you can seek information and assistance with union representatives at the workplace, trade union, or the Multicultural and information Centre. 

The biggest unions are Efling-stéttarfélag (www.efling.is), VR (www.vr.is) and umbrella organisations for trade unions such as the Association of Academics (BHM) (www.bhm.is) and the Federation of State and Municipal Employees (BSRB) (www.bsrb.is).

Health and safety at the workplace

Administration of Occupational Safety and Health in Iceland is the centre for health and safety at the workplace operations in Iceland. The role of the Administration of Occupational Safety and Health is to ensure that care is given to the safety of workers, monitor their working conditions and that measures are in place to prevent accidents at the workplace. Information on the Administration of Occupational Safety and Health, along with information material on health and safety at the workplace can be found at the website of the Administration of Occupational Safety and Health (www.vinnueftirlit.is).

Education assessment

Assessment of education can improve people's status on the labour market, increase the possibility of employment, and higher wages.

Various ministries oversee education assessments and professional certifications from abroad. Further information and forms can be found on the Educational Gateway website (www.menntagatt.is).