A foreign service provider must submit copies of the employment contracts of employees posted to Iceland to the Administration of Occupational Safety and Health (AOSH). AOSH reviews the contracts to determine whether pay and other terms and conditions of employment comply with Icelandic legislation and collective agreements.

Copies of the employment contracts of all employees posted to Iceland must be submitted no later than the day on which operations commence. They must be submitted together with the other required information.

Rights of posted workers

Posted employees are entitled, among other things, to:

• Pay and other terms and conditions of employment in accordance with Icelandic collective agreements.

• Overtime pay in accordance with Icelandic collective agreements.

• Annual leave and holiday pay according to Icelandic legislation.

• Compliance with rules on maximum working hours and minimum rest periods.

Information that must be included in the employment contract

The employment contract must include:

• Information about the employer and the employee.

• Job title and information on qualifications.

• The location of the assignment.

• Place of residence in Iceland.

• Working hours.

• Daytime pay, overtime pay and shift premiums, where applicable.

• The currency in which wages are paid.

• Per diem allowances and whether the employee bears the cost of accommodation and meals in Iceland.

• Annual leave and holiday pay.

• Whether the employee is covered by the social security system in their home country.

• Whether the employee has sickness and accident insurance in their home country.

Addendum to the employment contract

If an addendum to the employment contract is required for the period of work in Iceland, the AOSH template may be used.

Payments that are not considered wages

Please note that payments specifically related to the work must be included when calculating an employee’s minimum wage. However, payments intended to cover the employee’s travel, accommodation and subsistence expenses must not be included.

Before an employee comes to Iceland

Before an employee who is a national of a country outside the EEA is posted to Iceland, the rules governing foreign nationals’ right to reside and work in Iceland must be checked.

Nationals of countries outside the EEA

Where an employee of a foreign service provider is a national of a country outside the EEA or EFTA, confirmation that the employee holds a valid work permit in their home country must be submitted to the Administration of Occupational Safety and Health (AOSH).

An employee of a foreign service provider who is a national of a country outside the EEA or EFTA and is posted to Iceland by the service provider may reside and work in Iceland for up to 90 days in each calendar year.

It is important that all the above information concerning the employee’s intended stay and work in Iceland is provided before the employee arrives in Iceland, so that confirmation of the validity of the work permit can be obtained from the relevant authorities in the foreign service provider’s home country.

Once AOSH has determined that all the conditions have been met, it will issue confirmation to that effect, which may be presented upon arrival in Iceland if requested by the competent authorities.