Duty to provide information.
Act No. 45/2007 applies to companies (service companies) established in another EEA Member State, another EFTA State or the Faroe Islands, and posts workers in Iceland on a temporary basis in connection with the provision of services in any of the following manners:
- Workers are posted in Iceland on behalf of their employer and work under its direction in connection with a contract with a user undertaking regarding the provision of services in Iceland.
- Workers are posted in Iceland by their employer to its branch, or to a company in Iceland owned by the same corporate group.
- Workers are posted in Iceland by a company and are hired out in return for a fee to carry out work at the workplace of a user undertaking and under its direction. This refers to temporary-work agencies, and therefore Act No. 139/2005 on Temporary Work Agencies also applies.
A further condition is that a contractual relationship shall exist between the company and the worker during the time when he or she works in Iceland.
The Act prescribes the duty of a company or self-employed individual intending to provide services in Iceland for a total of more than ten working days in each twelve-month period, to provide The Directorate of Labour with information on, amongst other things, the provision of the services and a survey of the workers who will be working in Iceland under the company’s auspices.
Exemption from service companies’ obligation to provide information applies in cases involving services that consist of specialist assembly, installation, monitoring or repairs of equipment, which is not intended to take more than four weeks in each twelve-month period, in such cases the company is not required to register their operations to the directorate.
- If in doubt as to whether a service company should report to The Directorate of Labour, the directorate shall in all cases be contacted for guidance.
Posted workers’ terms and conditions of service:
During the workers‘ posting periods in Iceland, Icelandic legislation applies to their terms of service. This includes the Working Terms and Pension Rights Insurance Act, No. 55/1980, with regards to minimum wages and other wage-related issues, overtime payments, the right to vacation pay, maximum working hours and minimum rest periods. The Act stipulates that wages and other terms of service negotiated by the social partners are to be minimum terms. Thus, Icelandic collective agreements lay down minimum terms for foreign workers who are posted to Iceland on a temporary basis during the period that they work in Iceland. Furthermore, these workers are entitled to wages during absence from work due to illness and in consequence of accidents while they are working in Iceland in connection with the provision of services.
- In order to ensure that foreign workers’ terms of service are in accordance with Icelandic collective agreements during the periods in which they work in Iceland, the Directorate of Labour requests that copies of the employment contracts of workers posted in Iceland be submitted.
Terms of service and entitlement to sick leave are not, on the other hand, required to be in accordance with Icelandic legislation in the case of the first assembly and/or first installation of a product, which forms part of a contract on the provision of the product and is necessary in order to begin using the product, and is carried out by professional or specialist employees of the company, if the period during which the worker is in Iceland does not exceed eight days.
If a company provides a service in Iceland for a total of more than four weeks in any twelve months, it shall have a representative in Iceland. The representative may be one of the company’s workers who are posted temporarily in Iceland. It shall not be necessary to nominate a representative if fewer than six workers are normally working in Iceland under the company’s auspices. The company’s representative shall represent it and be responsible for providing the authorities with information according to Act No. 45/2007.
A user undertaking that employs the services of a foreign service company shall be obliged to request a written confirmation that it has fulfilled its duty to provide information to The Directorate of Labour. If the service company does not comply with the user undertaking’s request, The Directorate of Labour shall be notified of this, and shall also provide information on the company’s name, the name of its official representative, its address in its home state and the type of service being provided.