Act on the expatriate staff of foreign companies No. 45/2007
Purpose of the Act
A new act of law, No. 45/2007 on the rights and obligations of foreign companies that send temporary workers on assignment to Iceland was passed by the Alþingi. The purpose of the act is to clarify and strengthen supervision regarding the effectiveness of Icelandic collective labour agreements and regarding other terms of employment in Iceland, irrespective of whether the company is Icelandic or foreign. The Act is intended to further ensure that foreigners who arrive here in Iceland on a temporary basis on behalf of foreign companies are working here in a legal and lawful manner. The Act references the provisions of the EEA agreement and of the EU directives concerning service transactions, it is intended to promote the equal competitive position of Icelandic and foreign companies and is intended to counteract social dumping.
Corporations within the EEA
The Act applies to companies that are established in another state within the EEA, in another EFTA-state or in the Faeroe Islands that send temporary employees to Iceland in connection with the supplying of services or sub-contracting. It is required that expatriate staff have citizenship in any of the above mentioned countries or that they have work permit (green card) in the homeland of the company.
Duty to provide information
According to the Act the foreign company has a duty to inform the Directorate of Labour no later than eight weekdays prior to the commencement of the service/project here in Iceland. It is necessary to notify of any project that is ten weekdays or more and list the employees that are involved. User company (company in Iceland that uses the services of the foreign company) is responsible for the foreign company registering with the Directorate of Labour, and if the foreign company neglegts its duty the user company is obligated to gather the relevant information. Companies in the field of construction and civil engineering (main contractor) must deliver written verification that sub-contractors who work on their behalf have registered with the Directorate of Labour.
Verification of registration
The foreign companies receive an e-mail in verification of the registration of the company. When the Directorate of Labour has received the names and other information concerning the employees that the company will send to Iceland a list with the names of active employees will be sent to the company by e-mail. Both of these are lawful documentation which the company must show to the user comapny/main contractor.
Foreign companies that operate in Iceland for periods of more than four weeks every twelve months and with six men or more in active work are obligated to have a special representative in Iceland who manages registration matters and other mandatory communication with the Icelandic authorities.
Supervision and sanctions
The Directorate of Labour supervises the implementation of the Act. The agency can demand further information. In the event that a company does not comply with the instructions by the Directorate of Labour regarding mandatory information, or if it seems clear that the company does not comply with collective labour agreements the agency can demand that the police put a temporary stop to any work, or close down the operation of the company in Iceland until remedial action has been taken.
Registration is made electronically, click here and file:
- The company
- Registration of the user company/contract with user company
- Registration of employees