Remarks: The labour market is for the most part regulated by means of collective bargaining. The social partners play therefore an important role in setting wages in different sectors of the economy and various employment rights of workers. Collective agreements cover approximately 88% of the workforce.
Wages and other terms of employment concluded between the social partners in collective agreements are by law minimum terms, applying to all workers in the applicable occupation within the geographical area covered by each agreement. Minimum terms set by collective agreements do not stand in the way of higher wages and/or better terms negotiated between workers and their employers, if the economic situation in the relevant sector warrants it. (Introduction of the Labour Law/ Art.1 Act on Working Terms and Pension Rights Insurance).
SOURCES
Name of Act
Act on Working Terms and Pension Rights Insurance, Act No. 55/1980 as amended up to Act No. 76/2010.
Remarks: This Act covers all activities, where one or more persons are employed, whether they are owners of the enterprise or employees. Exempted from this Act are shipping operations and other projects that are specifically entrusted to the Icelandic Maritime Administration as well as the work of the crews on aircrafts. Chapter 1
The provisions of the Chapter IX (Rest time, Holidays and Maximum Working Hours) shall not apply to: 1. those who work at road transport and are covered by Acts and regulations concerning 1) drivers’ driving hours and rest time, etc., in domestic transportation and transportation within the European Economic Area, 2. senior managers or other persons who decide their own working hours, 3. special circumstances relating to the functions of the state, such as necessary security activities and urgent investigative interests in the field of law enforcement, work connected with civil defence and monitoring activities in connection with avalanche prevention measures. Art.52a)
Name of Act
Icelandic Labour Law (A summary of basic rights and obligations on the private labour market) issued by the Icelandic Confederation of Labour (ASI). Fifth edition. December 2010.
Remarks: This booklet contains information on trade unions and collective bargaining, employment contracts, wages and working time, holiday allowance, payments in case of accidents and sickness, health and safety in the workplace, maternity and paternal leave, information and consultation of workers, access of foreign workers into the labour market and other related issues. In addition to that, workers rights are also protected in various pieces of legislation which deal with particular aspects of the employment relationship and the social rights of workers.
LEGAL DEFINITIONS
Employee/worker
Employee signifies, in this Act, each individual who holds a job for services paid by someone else. Students and apprentices shall also be considered as employees, even though they work without payment, providing that their work constitutes part of formal studies.
Act on Working Environment, Health and Safety in Workplaces Art.24
Employer
The employer shall be anybody who operates any kind of business. If operated jointly by two or more people, only one of them shall be considered the employer in terms of his obligations with the employees. According to this Act, the executive director of a company is considered the employer.
Act on Working Environment, Health and Safety in Workplaces Art.12
MINIMUM WAGE FIXING
Procedure
Procedure in general
There is no statutory minimum wage in Iceland. Minimum wage rates are established through sectoral collective agreements.
Act on Working Terms and Pension Rights Insurance Art.1 Icelandic Labour Law Art.5.1
Minimum wage set through decentralized collective bargaining
Collective agreements are bipartite, agreed between the social partners. The minimum wage rates determined through collective agreements apply to all wage earners in the sector covered by a collective agreement, regardless of whether they are members of the trade unions that negotiated the agreement. Employment contracts providing employment conditions less advantageous than those set forth in the applicable collective agreement shall be void.
Act on Working Terms and Pension Rights Insurance Art.1,2 Icelandic Labour Law Art.5.1
Criteria
Other provisions
The New Collective Agreement on the private labour market, signed on Thursday May 5th 2011, is based on the upholding of the pre conditions during 2012 and 2013 as regards to the inflation of Iceland, the value of the national currency (krona) and the real wages. If conditions are maintained, the Agreement will be valid until February 1st, 2014.
New Collective Agreement on the private labour market
Coverage
Scope
The minimum wage for each sector of the labour market is negotiated in collective agreements by the social partners and is therefore not the same for every occupational sector. The minimum wages are determined on grounds of the nature of the work, seniority and education.
On Thursday May 5th 2011 a new Collective Agreement applying to the private labour market was signed. This Agreement provides a general minimum wage rate for all full time workers in the private sector, as from 1 June 2011, 1 February 2012 and 1 February 2013.
Icelandic Labour Law Art.5.1 New Collective Agreement on the private labour market
Specific minimum wage rates
» Specific minimum wage by occupation
As determined by collective agreement.
» Specific minimum wage by sector
Minimum wage rates are determined through sectoral collective agreements.
Level
Minimum wage level(s) in national currency
The New Collective Agreement on the private labour market provides the minimum wage rates effective as from: 1 June 2011; 182.000 kr. per month. 1 February 2012; 193.000 kr. per month. 1 February 2013; 204.000 kr. per month.
New Collective Agreement on the private labour market
Last minimum wage update
1 February 2012
New Collective Agreement on the private labour market
Rate of payment
» Weekly
Yes. Wages may be determined at weekly or monthly basis.
Icelandic Labour Law Art.5.2
» Monthly
Yes. The New Collective Agreement on the private labour market of 2011, provides a general minimum wage rate for full time work calculated on monthly basis.
New Collective Agreement on the private labour market
Scheduled frequency of adjustment
The wage scales of collective agreements are generally subject to annual changes on 1 January every year, or upon the entry-into-force of a new collective agreement. On Thursday May 5th 2011 a new Collective Agreement on the private labour market was signed, which provides the increases in wages as from 1 June 2011, 1 February 2012 and 1 February 2013.
New Collective Agreement on the private labour market
Enforcement mechanisms
Labour inspection
Inspectors from the social partners may do inspection visit to an employer’s workplaces to verify that the employer and his/her employees work in accordance with the current acts, regulations and collective agreements. The inspectors shall be admitted to workplaces for this purpose.
Act on Workplace ID Cards and Workplace Inspection Art.4
Fines in national currency for non-respect of legislation
In cases of non respect the legislation, such as in cases where the employer refuses the access to inspectors in the workplace or in cases where an employer or the employees do not carry workplace ID cards while working, fines may be imposed up to ISK 100,000 per day.
Act on Workplace ID Cards and Workplace Inspection Art.6
Results generated on: 19th April 2024 at 01:21:06.
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