Temporary work agencies (TWA), domestic or foreign, that provide services in Iceland have a duty to notify their businesses to the Directorate of Labour and must disclose certain information according to the Act on Temporary work agencies No. 139/2005. Act no. 45/2007 also applies to foreign TWA´s.
TWA’s must provide their workers with a written contract of employment and provide their workers with written information about the work they are about to undertake in each user undertaking.
According to act no. 139/2005, as amended in 2013, a TWA worker is entitled to a salary which equals the same amount that he would receive in case he was in a direct employment relationship with the user company.
TWA’s are prohibited from claiming, to negotiate or receive a fee from their workers for offering or providing them employment, whether at the start or during the course of the employment relationship. TWA’s are in principle not allowed to hire out a worker to a user undertaking if the worker was in direct employment with the latter undertaking in the previous six months. They are also prohibited from banning or restricting their workers from resigning from their employment contracts in order to form a direct employment relationship with any of the user undertakings where they have been working.
