Employment Law

Generally, the working week of a full-time employee is 40 hours, unless shorter working hours are specifically agreed upon. The principle is that a full-time employee fulfills their full duty if they work 8 hours a day, 5 days a week, Monday to Friday.

Overtime is work that is performed outside of the prescribed daily working hours or an employee's shift, as well as work that is performed in excess of the weekly working time obligation.

Contracts also contain provisions on rest periods, and generally an employee should receive at least 11 hours of continuous rest in a 24-hour period and is not permitted to organize work so that working hours per 24-hour period exceeds 13 hours. However, there are deviations from these provisions, for example in organized shift work.

See more on working hours on the BHM website.

In the collective agreements of BHM member associations that were signed in the years 2019 - 2021 is a provision for changing the weekly working hours. The working week has been 40 hours for almost half a century and it is clear that a lot has changed in that time.

By shortening the working week, the workplace becomes more efficient and at the same time more family-friendly, and the shortening can contribute to increased gender equality in the labour market and inside homes.

The way the shortening of the working week is implemented and how far that process has come varies between workplaces.

See more on the shortening of the working week on the BHM website.

Remote work is based on an agreement with the employer that work that is normally done at a place of establishment is regularly done away from a place of establishment with the help of information technology.

Remote work is based on the free choice of the employee and the employer, and there is no one correct form of remote work. In this way, remote work may be part of the original job description or may have come about as an unforced choice of the parties later.

Before remote work can begin, it is necessary to take a stand on various issues and solutions that affect both the employee and the employer. Members of Fræðagarður are encouraged to contact the union before making a written agreement on remote work arrangements.

See more on remote working on the BHM website.

Employees are generally entitled to sick pay as stipulated by law or agreed in a collective agreement. Illness rights differ depending on whether the employee is a public employee or works in the public labour market.

If an employee becomes unable to work due to illness or an accident, they must immediately notify their supervisor, who will decide whether a medical certificate should be required.

See more on absence due to illness on the BHM website.

The right to vacation is about the right of employees to take time off from work. On the one hand, it is the employee's right to take leave, and on the other hand, the right to be paid during the leave.

The vacation year is from May 1 to April 30. Within each vacation year, the employee earns the right to vacation and vacation pay in the following vacation year. Only working days count as vacation days, and according to the law, the minimum vacation is two working days for each month worked during the vacation accrual period.

The right to vacation varies depending on whether the employee works in the public labour market or with the state and local authorities. Seniority (and in some cases age) also affects the accrual of vacation rights.

See more on vacation on the BHM website.

An employee on a monthly salary keeps their salary during vacation and the salary depends on the number of vacation days earned.

Vacation pay due to overtime or shift work is immediately deposited into the employee's special vacation account in a bank or savings fund and is available for payment from mid-May each year.

In the same way, vacation pay is paid from the wages of hourly workers and all monthly wages in the case of short-term employment.

See more on vacation pay on the BHM website.

The terms Vacation Allowance and December Allowance refer to each type of personal allowance.

The Vacation Allowance is either paid on June 1 or May 1, while the December Allowance must be paid on December 1.

In both cases, it is a fixed amount in krónur and no allowance is added to it.

See more on vacation and December allowance on the BHM website.

The right to maternity leave arises when the following occurs:

- Birth of a child

- Primary adoption of a child younger than 8 years old

- Taking a child younger than 8 years old into permanent foster care

- Miscarriage after 18 weeks of pregnancy

- Stillbirth after 22 weeks of pregnancy

Parents who are employed in the Icelandic labour market are entitled to 4 months unpaid parental leave. The right expires when the child reaches 8 years of age.

See more on maternity leave and parental leave on the BHM website.

All employees and those engaged in business or activities of independent nature are obliged to secure pension rights. Depending on the collective agreement, there is a provision on which pension fund should be paid into, but in the general labour market, pension fund membership is usually optional.

Pension fund membership comes with a variety of benefits in addition to old-age pension until a person dies. These include pension payments in case of loss of working capacity or death, as well as the possibility of loans from a pension fund.

In addition to mandatory contributions, fund members have the option of additional pension savings and receive a counter-contribution from employers.

See more on pension rights on the BHM website.

A representative is a member of a trade union who has been nominated by the employees or the union itself as its representative at the workplace. They are the liaison between members in the workplace and the employer on the one hand and between members and the union on the other.

A representative does not stand alone and the board and staff of a trade union help them to solve the issues that may arise and fall under the scope of the trade union. The duties and roles representatives are supposed to play can vary greatly from union to union.

See more on representatives on the BHM website.

According to Article 43 Act no. 70/1996 on the rights and obligations of state employees, the head of an institution has the right to terminate an employee as stipulated in the employment contract. The reasons behind the termination of the employment contract matter, so a distinction is made between reasons that concern the employee themself on the one hand and other reasons on the other. Reasons that concern the employee themself can for example be that they violated their duties or did not achieve satisfactory results in their work. The employee must also be given the right to object and be given a warning.

Special procedural rules apply to the right of objection and warning, and members are advised to contact the Fræðagarður office.

Before the final decision is made and the employee is given a warning, it is obligatory to give them the opportunity to speak their case, unless this is not possible. In order for the employee to be able to exercise their right to object, they must be notified of the planned warning and explain its purpose and reason.

See more on warnings on the BHM website.

In all cases, members should contact the Fræðagarður office and seek advice if plans to make changes to their job is underway, as it is necessary to examine each case individually

See more on work related changes on the BHM website.

Public entities in the labour market must in principle advertise, but then again, there is no advertising obligation for employers in the general labour market.

See more on advertising obligation on the BHM website.

It has generally been understood that an employer should not pay employees wages due to external circumstances such as, for example, impassability due to weather, volcanic eruptions, etc. These are situations that are not the employer's responsibility.

See more on legal status due to impassability on the BHM website.

Termination is a written notification of the termination of an employment relationship. In general, the termination of employment will take place later, or when the notice period according to the employment contract/collective agreement has passed.

The length of the notice period and the execution of the notice depends, among other things, on whether the person works in the open labour market or in the public sector. There may also be special provisions in the respective employee's contracts.

The termination as such does not affect the employee's legal status professionally, they retain accrued sick leave and vacation rights and continue to accrue rights during the notice period.

See more on terminations on the BHM website.

According to the law and the collective agreement, the employer is allowed to change the job and scope of the employee either temporarily or permanently, i.a. due to changes in organization or operation. Where there’s a will, there’s a way if both parties agree and it is worth looking at whether the parties believe that it is possible to reach an agreement on a change in terms of employment, work rate or other changes in the work of employees during difficult times.

It is important to conclude a written agreement between the parties if there is a change in wages or employment ratio, whether such a change is temporary or not. Members are encouraged to contact the Fræðagarður office before agreeing to such changes.

See more on redundancies on the BHM website.

As a general rule, it is assumed that workers retire at retirement age.

A government employee is normally terminated as of the end of the next month after they reach the age of 70. Comparable provisions can be found in Fræðagarður’s collective agreements with the City of Reykjavík and other municipalities. However, it is expected that the employee will retire at the end of the next month after reaching the age of 70 without special notice.

See more on retirement due to age on the BHM website.

Applies only to employees who work for the state and who started working before July 1, 1996. If an employee who meets the aforementioned conditions receives a formal notice of layoff due to organizational changes, care must be taken to determine whether the employee has the right to severance payments.

The rights to severance payments is six months, unless the employee has worked for more than 15 years, in which case it is twelve months. When the right to severance payments is assessed, first the continuous period of employment from 1 July 1996 and then the entire period of employment with the state prior to 1996, regardless of whether it was continuous employment or not, shall be counted.

Severance payments do not apply to employees who started working after July 1, 1996.

See more on severance payments on the BHM website.

Marketing your own skills, knowledge and experience seems to be difficult for many university graduates. The following questions can be useful:

- What do I want?

- What do I have to offer?

- Where am I heading?

- What are my strengths and weaknesses?

Various ways are possible when people are establishing themselves in the labour market. Answering job ads is one of the many ways in this regard. It should be had in mind that only a small proportion of vacancies are advertised in the media. The initiative and boldness of those who are looking for a job can therefore make a big difference. It is common that people look directly to companies or organizations that are interesting in the eyes of a job seeker. Many succeed in making use of their own network, i.e. let as many people know that they are looking for an interesting job and use all available means in the job search.

See more on job search on the BHM website.

From the time the liquidator declares claims to the bankruptcy estate, the employee has two months to submit their claim to the bankruptcy estate. A member authorizes his trade union to declare claims in the estate. In order to declare claims, the union needs to obtain a copy of the employment contract and payslips and subsequently prepares a claim declaration for the estate. At the same time, the union sends confirmation to Ábyrgðarsjóður launa (Wage Guarantee Fund) that a claim will be made for a valid notice period on behalf of the employee.

See more on corporate bankruptcy on the BHM website.

Transfer of undertakings means, for example, when a functional unit moves from one employer to another.

The Act on transfer of undertakings guarantees the legal status of employees when transferring of undertakings in a company or part of a company within the European Economic Area. In general, wages and working conditions continue to apply after a transfer until changes are made to the collective agreement or it is terminated.

See more on transfer of undertakings on the BHM website.