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Posting workers to Iceland

Below you can find an overview for transnational posting to Iceland.

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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 which 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, including details of the services and a list of workers who will be working in Iceland under the company’s behalf.  

Specifically, both service providers and self-employed workers will have to register their operations and employees posted to Iceland within the platform 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 declaration of posting, the foreign service provider will receive a confirmation of registration and will subsequently be obliged to notify its client of the confirmation 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 a company provides a service in Iceland for a total of more than four weeks in a twelve-month period, they are obliged to appoint a representative in Iceland who 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 number of employees temporarily posted to Iceland is less than 6.

Working and salary conditions in Iceland

In the case of posting of workers to Iceland pursuant to Act No. 45/2007, Act No. 55/1980 on Working Conditions and Pension Rights shall apply to their terms and conditions of employment, concerning 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 between the worker and the company concerned. 

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

During the entire period in which a foreign company provides services in Iceland, and for one month after the end of the provision of services, it must always keep and make available certain documents, such as: 

  • 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. 

When documents are written in a language other than Icelandic or English, they must be accompanied by translations into one of the aforementioned languages. 

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, provided that the following criteria are met:  

  • 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 he/she is 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 and continue to be covered by the social security of the Member State where they are regularly employed, provided that the posting does not exceed 24 months. 

The posting company must request an A1 certificate from the competent social institution (INPS) for its posted worker, who 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. 

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Regulatory Framework

Act on Posted Workers and the Obligations of Foreign Service-Providers No. 45/2007

Reference

Learn more about Posting of Workers to Europe

Have a look at our in-depth guides about Posting of Workers to EU Countries. If you don’t know where to start, you can have a first look at our introduction on Posting of Workers to Europe.

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