Role of The Directorate of Labour.   

The Directorate of Labour appertains to The Ministry of Social affairs and manages, amongst other things, the employment service for the entire country, the daily handling of the Unemployment Insurance Fund, the Maternity / Paternity Leave and Parental Leave Fund, the Wage Guarantee Fund, as well as numerous other labour market related projects.  

The Directorate of Labour operates in accordance with Act no. 55/2006 on Labour Market Measures and Act  no. 54/2006  on Unemployment Insurance, as well as implementing numerous other legislations. The purpose of the Act regarding Labour Market Measures is to provide individuals with appropriate assistance to become active in the labour market, the Act is also intended to promote a balance between supply and demand for labour in the country.  


The Directorate of Labour operates eight services centres around the country, where all general services are provided to jobseekers, registration, skill assessment, counselling and resources and job placement as well as cooperation with other service providers on resources and labour market measures.  

The Minister of Social Affairs and Children appoints a ten-member board of The Directorate of Labour, who are nominated for four years at a time, and shall supervise the operation and activities of the directorate. The Minister of Social Affairs also appoints a seven-member regional labour market council, which shall be the relevant service centre of The Directorate of Labour for advice on the organisation and selection of labour market measures.  

Projects of the Directorate of Labour 

  • Maintain a registry for job vacancies available throughout the country, disseminate information regarding job vacancies to jobseekers and assist them in finding suitable employment, and assist employers in recruiting staff and provide them with information regarding labour supply.  
  • Handle the registration of unemployed individuals, calculations, and payments of unemployment benefits.  
  • Handle the organisation of labour market measures, e.g., courses, vocational resources, counselling, educational resources and vocational rehabilitation. The services of The Directorate of Labour’s counsellors shall be based on the individual needs of each jobseeker. The Directorate of Labour must assess the jobseeker’s work ability when applying for participation in labour market measures. On the basis of the assessment, a plan is made regarding the job search and participation in appropriate labour market measures or the jobseeker is instructed to other services if deemed necessary.  
  • Obtain and maintain information regarding the employment situation, unemployment and employment prospects of individual parts of the country. The Directorate of Labour also monitors the composition of the labour force in the country, regularly examines the need for manpower and future prospects in industries and disseminates information regarding the employment situation in the country.  
  • Handles the issuance of work permits and the registration of foreigners in the Icelandic labour market and temporary work agencies.  


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