Temporary-work agencies 


Duty to provide information. 

Act no. 139/2005 applies to temporary work agencies operating in Iceland and their employees. The term ‘temporary work agency’ is defined as a service company that, according to service agreements, rents out their employees for a fee to work under the supervision of the user undertaking.  Temporary work agencies who are not registered in the European Economic Area or in an EFTA state are prohibited to provide services here in Iceland.  

Companies wanting to provide temporary work agency services her in Iceland, both domestic and foreign, are required to register their operations to The Directorate of Labournot later than the same day that operations commence.  

If a temporary work agency intends to provide services her in Iceland for more than ten working days in each twelve-month period, information regarding the employees’ place of residence, period of residencename and ID number of the user undertaking, etc.  

Terms and Conditions of Employment:

During the time when workers are carrying out work for user undertakings, they shall receive at least the same wages and other terms of service as they would have had if they had been engaged directly by the user undertaking for the same jobs. In all cases, the Directorate of Labour requires copies of employment contracts to be submitted to it in order to ensure that these workers receive correct wages and terms. The Directorate will also check in all cases whether the terms of service are in line with collective agreements made in Iceland. 


A temporary work agency that provides services in Iceland for a total of more than ten working days in each twelve-month period shall have a representative in Iceland. The representative may be one of the company’s workers who are temporarily employed in Iceland. The company’s representative shall represent it, and be responsible for providing authorities with information according to law. 

User undertakings:

A user undertaking that employees of the services of a temporary work agency is obligated to request written confirmation that it has fulfilled its duty to provide information to The Directorate of Labour. 

A worker who has previously worked for a user undertaking may not be hired out to the same undertaking until six months have elapsed. Furthermore, the temporary work agency may not restrict the right of a worker who has been hired out to a user undertaking to enter into a subsequent employment relationship with that undertaking. 

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