The posting of workers to Iceland in the context of a transnational provision of services is regulated by the Act on Posted Workers and the Obligations of Foreign Service-Providers No. 45/2007.
Administrative obligations in the case of posting of workers to Iceland
Act No. 45/2007 applies to companies established in EEA Member States, EFTA States or the Faroe Islands. They should temporarily post workers to Iceland for the provision of services in any of the following cases:
- Workers are posted to Iceland on behalf of their employer to work under its direction in connection with a contract with a client company regarding the provision of services in Iceland;
- Workers are posted to Iceland by their employer to its branch, or to a company in Iceland owned by the same corporate group;
- Workers are posted to Iceland by a company and are hired out in return for a fee to carry out work at the workplace of a user undertaking and under its direction.
Obligations apply for postings exceeding ten working days
Companies or self-employed workers intending to provide services in Iceland, for a total of more than ten working days in a twelve-month period, must provide information to the Labour Directorate. They should also include details of the services and a list of workers who will work in Iceland.
Specifically, both service providers and self-employed workers will have to register to Iceland within the platform. It is made available by the authorities in electronic form.
With regard to temporary-work agencies, if they intend to provide services in Iceland for more than ten working days in a twelve-month period, they are required to provide information on the workers’ place of residence, period of assignment, name and identification number of the user undertaking, etc.
As soon as the Directorate of Labour receives the posting declaration, the foreign provider will receive a confirmation of registration. Subsequently, they must notify their client of the confirmation. The due timing is within two working days from the beginning of the operations in Iceland.
Cases in which companies or self-employed workers are exempt from notifying their operations to the Directorate include:
- services of specialist assembly,
- installation,
- monitoring or repairs of equipment,
with a duration of less than four weeks in a twelve-month period.
Appointment of a representative for postings to Iceland
If the service provision in Iceland lasts more than four weeks in a twelve-month period, the company must appoint a representative in Iceland. The latter will be responsible for providing the authorities with the information required by Act No 45/2007. The company may also appoint one of the employees temporarily posted to Iceland as a representative.
However, it is not necessary to appoint a representative if the employees posted to Iceland are less than 6.
Working and salary conditions in Iceland
Act No. 55/1980 on Working Conditions and Pension Rights shall apply to postings to Iceland terms and conditions of employment. It concerns:
- minimum wages and other matters relating to wages,
- overtime pay,
- holiday pay entitlement,
- maximum working hours and minimum rest periods,
regardless of foreign legislation covering other aspects of the employment relationship.
The law stipulates that wages and other conditions of service negotiated by the social partners must be minimum conditions. Therefore, Icelandic collective agreements set minimum conditions for foreign workers posted to Iceland temporarily during their service provision in Iceland.
In order to ensure that foreign workers’ terms and conditions of service are in accordance with the Icelandic collective agreements for the entire duration of their employment in Iceland, the Labour Directorate requests that copies of the employment contracts of workers posted to Iceland be submitted.
Storage of the posting documents
Throughout the assignment to Iceland, and for one month after the end, the posting company must keep and make available some documents:
- The posted worker(s)’s employment contract;
- Payslips for each posted worker;
- Time sheets;
- Proof of payment of wages in accordance with the information on the payslip.
Documents must be translated in Icelandic or English if they are written in another language.
Non-EU workers posted to Iceland
As a rule, third-country citizens must have a residence and work permit in order to work in Iceland.
However, according to Icelandic law, a non-EU citizen is allowed to reside and work in Iceland for a maximum of 90 days in a 180-day period. In any case, they must meet the following criteria:
- The posted worker is in fact an employee of a company established in an EEA or EFTA State;
- The posted worker holds a valid work permit in the Country from which they are posted.
If the requirements of the 90-day exemption are not met or if the working days exceed 90 days out of 180, it is necessary to apply for both a residence permit and a work permit in accordance with Icelandic national legislation.
Social security in Iceland
According to European Regulation 883/2004, posted workers, while working temporarily in Iceland, may apply for an A1 certificate in Italy. In this way, they continue to be covered by the social security of the Member State where they are employed. However, the posting must not exceed 24 months.
The posting company must request an A1 certificate from the competent social institution for its posted worker. He must keep it for the entire period of his posting to Iceland.
Regulation No. 859/2003 and Regulation No. 1231/2010 are not binding for Denmark and the EEA countries (Iceland, Liechtenstein and Norway). Therefore, EU legislation on social security does not apply to non-EU citizens who are posted in these countries.