Fish processing companies - Payments regarding work stoppage due to a shortage of raw material

Fish processing companies that have received an operating license from the Icelandic Food and Veterinary Authority can apply for payments from The Directorate of Labouregarding work stoppage due to a shortage of raw materials. 

Right to guaranteed pay:

Guaranteed pay of fish processing workers is stipulated in general collective wage agreements and covers employees in primary and secondary processing of seafood, i.e., gutting, freshwater fish processing, freezing, salting, drying and shrimp and shellfish processing. 

The employer undertakes to pay an employee who is entitled to guaranteed pay, a fixed salary for daytime work according to collective agreements, regardless of a shortage of raw materials causing work stoppage, as well as in basic courses for fish processing workers. 

The Unemployment Insurance Fund makes payments to fish processing companies due to a temporary work stoppage for those employees who are entitled to guaranteed pay. 

Those employees who are entitled to guaranteed pay, are hired for all general work in fish processing and have entered into a guaranteed pay agreement based on general collective wage agreements. 

A guaranteed pay agreement shall be made in writing after one month of continuous employment and shall take effect upon signing. The terms of the guaranteed pay agreement are the same as the terms of the employment contract and does not become void until the termination of employment. 

The guaranteed pay agreement must be completed, dated, and signed. 

Parties to collective wage agreements on guaranteed pay. 

  • AFL Starfsgreinafélag 
  • Aldan stéttarfélag 
  • Báran stéttarfélag 
  • Drífandi stéttarfélag 
  • Efling stéttarfélag 
  • Eining-Iðja 
  • Framsýn stéttarfélag 
  • Stéttarfélagið Samstaða 
  • Stéttarfélag Vesturlands 
  • Verkalýðsfélag Akraness 
  • Verkalýðsfélag Grindavíkur 
  • Verkalýðsfélagið Hlíf 
  • Verkalýðs- og sjómannafélag Bolungarvíkur 
  • Verkalýðs- og sjómannafélag Keflavíkur og nágrennis 
  • Verkalýðs- og sjómannafélag Sandgerðis 
  • Verkalýðsfélag Snæfellinga 
  • Verkalýðsfélag Suðurlands 
  • Verkalýðsfélag Vestfirðinga 
  • Verkalýðsfélag Þórshafnar 

Temporary work stoppage:

A temporary work stoppage means that a shortage of raw materials halts processing during the company's normal processing time. 

Normal processing will not be continued in a fish processing company, in its specific department or processing line due to a shortage of raw materials or other similar reasons, such as burns, engine failures or because it is not considered justified to process catches due to insufficient catches, provided the processing ban applies to the majority of employees in the relevant department or production line. 

This does not apply to a stoppage of production during an otherwise normal time of a company that can only be traced to the installation of new equipment in the company, changes to the company's processing premises, or employees' summer vacation. 

If a company has received higher amounts from the Unemployment Insurance Fund than it is entitled to by law, on the grounds of incorrect or insufficient information, it must be reimbursed. The Directorate of Labor may also deduct overpaid amounts from payments to which the company may be entitled at a later date according

Reimbursement to fish processing due to work stoppage:

Fish processing companies that have received an operating license from the Icelandic Food and Veterinary Authority can apply for payments from The Directorate of Laboufor each full working day that it pays employees during a temporary work stoppage. 

  • A company that intends to apply for payment due to a temporary work stoppage shall notify the Directorate of Labour of the planned work stoppage with one day's notice. 
  • Payments from the Unemployment Insurance Fund must be applied for when the work stoppage ends. 
  • If the application or requested documents have not been received within three months from the date that the work stoppage commenced, the company's right to payment regarding the work stoppage in question will lapse. 

    Companies are entitled to payment
    s regarding the following: 

    • Employees in general fish processing that have a valid guaranteed pay agreement according to relevant collective wage agreements. 
    • Employees who are demonstrably have no projects due to a work stoppage. 
    • Employees who were paid daily wages for a full day/s during a work stoppage. 
    • Employees who would have been at work if there had not been a work stoppage. 

    Payments are the amount of unreduced basic unemployment benefits for each full-time employee who has no projects during a temporary work stoppage, but not more than 15 payment days in each instance, and never more than 35 payment days in each calendar year. 

    For part-time employees, the payment shall be in accordance with the employees’ contractual employment ratio. 

    Companies are not entitled to payment for the following: 

    • The first five days of the work stoppage in the period of January 1st to June 30th and the first five days of the work stoppage in the period from July 1st to December 31st in each calendar year. However, a work stoppage must be notified, and payment must be requested for those days. 
    • A temporary work stoppage occurring on a Thursday and Friday before a statutory holiday. 
    • A temporary work stoppage on days that are not full working days. 
    • Employees who are not entitled to guaranteed pay according to their collective agreement. 
    • An employee who has a job elsewhere during a work stoppage and the company's salary payments are cancelled. The fund's payment is cancelled for the same period. 
    • Employees who were absent due to illness, vacation or other reasons if there was no work stoppage. 

    If a company has received higher amounts from the Unemployment Insurance Fund than it is entitled to according to legislation on the grounds of incorrect or insufficient information, it must be reimbursed. 

    The Directorate of Labour is also permitted to deduct overpaid amounts from payments to which the company may be entitled at a later date according to legislation. 

Reimbursement to fish processing companies for employee vocational training

Companies that exercise their right to guaranteed pay payments in the event of a temporary work stoppage are obliged to arrange for vocational training courses for fish processors to be held primarily during the duration of the work stoppage.  

If it not at all possible, the company must notify the planned course with 24-hour notice, as is done a planned work stoppage. 

Payments are made for employees according to 100% or 50% employment ratio, and a maximum of 40 hours are paid for each employee. 

Confirmation must be submitted by the party responsible for the course, stipulating the names of the employees attending the course, the duration of the course (hours), the days it lasted, and its content.

Application process:

Notifications of a planned work stoppage and applications for payments due to a work stoppage are made electronically via ‘Mpages’ for employers on The Directorate of Labour's website. 

An ice key or electronic ID is used to log in, either on the company's ID number or on the ID number of an individual on behalf of the company. 

  • Further information about the IceKey and its use can be found at Digital Iceland on the website: 
  • Further information about Electronic Certificates and their use can be found on the website  

The application process is twofold. 

  1. Announce the planned work stoppage. 
  1. Application for a refund. 

The intended work stoppage must be notified with 24-hour notice. When it is clear how long the work stoppage will last, an application for a refund for the days that the work stoppage lasted can be submitted. 

Notification of planned work stoppage. 

The intended work stoppage must be notified with 24-hour notice. A notification is sent via ‘My pages, and if the company has registered more than one department or fish processing plant, then the intended work stoppage must be registered on the relevant unit. 

If there is a change in the intended work stoppage, it must be notified again 24 hours in advance. This also applies if, e.g., work stoppage is postponed by one day. 

It is not necessary to submit a notification of the work stoppage daily if the stoppage lasts for a continuous period. Only the beginning of the work stoppage shall be announced each time. 

When a notification of a work stoppage has been submitted via ‘My pages’, a formal confirmation regarding this will be sent to the company by email. 

Application for payments 

When the temporary work stoppage has ended and the company's work has resumed, payment can be made for the relevant period. Only one application shall be made for each work stoppage. 

Payments for a temporary work stoppage must be applied for within three months of the start of the work stoppage in question. After that time, the company's right to a refund lapse. 

The application is processed under the date of the relevant work stoppage on ‘My pages and sent electronically for processing to The Directorate of Labour. A guaranteed pay agreement be registered for each employee, along with the employee's employment ratio. 

Payments shall only be made for employees who demonstrably stopped working and did not take up another paid job during the work stoppage, whether at the same company or another. 

Companies must ensure that all information regarding their employees is correct, e.g., their entitlement to guaranteed pay and their employment ratio. 

Here you can view a short video regarding the application process.   


Per diem unemployment benefit payments are paid to fish processing companies regarding a work stoppage, due to employees with guaranteed pay agreements. The unemployment benefit amount is 13,360 kr. per day based on 100% employment ratio and is paid proportionally based on the employee's contractual employment ratio. 

The number of payment days that may be paid in a row is a maximum of 15 days, but never more than 35 in each calendar year. The first five registered days in each half of the year are not paid. 

When the application for payment from the Unemployment Insurance Fund has been approved, the payment is deposited into the company's account. Payment summary can be accessed on ‘My pages’. Unprocessed applications can also be viewed and are marked in yellow. 

Provision of information to the Directorate of Labour:

The Directorate of Labour shall have access to the payroll and service accounting of a company, e.g., copies of the company's production records, pay slips and employee time sheets, as well as guaranteed pay agreements in force between the company and its employees. 

The Directorate of Labouis permitted to request further information should it be deemed necessary. 

Instructions – Summary:

Planned work stoppages are announced via ‘My pages one day in advance. 

  • Companies that have more than one establishment or department must notify the work stoppage under the correct unit. 
  • It is only necessary to report each work stoppage once, not for each day that it lasts. 
  • The intended work stoppage must always be reported, even when a new work stoppage overlaps with the possible application period of a previous work stoppage. 

After the work stoppage, a refund can be applied for. 

  • Reimbursement should only be applied for once for each work stoppage, i.e., one application is made for each work stoppage, but not a new application for each day of the work stoppage. 
  • Applications are only made for those employees who are entitled to guaranteed pay. 

Do you require assistance, or have questions? 

Send an email to: 

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