Act No. 45/2007 on the rights and obligations of EEA-undertakings which post their workers temporarily to Iceland and their remuneration applies to undertakings that undertake one of the following international measures:
- post workers to Iceland on their account and under their direction, under a contract concluded between the undertaking making the posting and the party for whom the services are intended, operating in Iceland, or
- post workers to an establishment or to an undertaking owned by the group in Iceland, or
- being a temporary employment agency, hire out a worker to a user undertaking established or operating in Iceland.
Posted workers on the Icelandic labour market enjoy rights under Icelandic law and collective agreements regarding minimum pay and other terms of employment, and the rights to vacation and vacation pay. Additionally, the rules on maximum work time and minimum rest should be abided by. The law stipulates their right to pay in sick or accident situations and to accident insurance. Their employer must furthermore ensure their health and safety in the workplace according to law.
Allowances specific to the posting are considered to be part of the minimum wage, unless they are paid in reimbursement of expenditure actually incurred on account of the posting, such as expenditure on travel, board and lodging.
The provisions of the legislation apply without prejudice to better terms of wages and terms for workers according to their employment contracts with the relevant undertaking or to collective agreements or legislation in the state where they normally work.
An EEA-undertaking intending to provide services in Iceland for a total of more than ten working days in any twelve-month period is required to submit information to the Directorate of Labour not later than the same day as operations in Iceland commence. This includes the name of the undertaking, a survey list of the workers, information as to whether the workers are covered by social security in their home country, confirmation that workers are covered by accident insurance while in Iceland and more.
Undertaking providing services in Iceland for a total of more than four weeks in any twelve months shall have a representative in Iceland. The representative may be one of the undertaking´s workers who are temporarily employed in Iceland. It is not necessary to nominate a representative if fewer than six workers normally work in Iceland on the undertaking’s account.
