Foreign service providers may be subject to penalties if they fail to fulfil their obligations under the Act on Posted Workers and the Obligations of Foreign Service Providers.

The Administration of Occupational Safety and Health (AOSH) monitors compliance with obligations relating to, among other things, registration, the provision of information and employees’ terms and conditions of employment. If an undertaking fails to fulfil its obligations, AOSH may require corrective action within a specified period and impose penalties.

AOSH may, among other things, impose the following penalties:

Temporary suspension of work or operations

AOSH may request that the police temporarily suspend work or close down the undertaking’s operations in Iceland until satisfactory corrective action has been taken.

Daily fines

AOSH may impose daily fines on an undertaking to enforce corrective action. The fines may amount to up to ISK 1 million per day until AOSH has received notification that the necessary corrective action has been taken.

When determining the amount of the fine, factors such as the scale of the operations and the number of employees are taken into account.

Administrative fines

AOSH may impose administrative fines on an undertaking that:

• Fails to provide information required by law.

• Fails to provide access to documentation.

• Provides incorrect or incomplete information.

The fines may amount to up to ISK 5 million. When determining the amount of the fine, factors such as the seriousness and duration of the infringement, whether the infringement has been repeated and the undertaking’s willingness to cooperate are taken into account.