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Employee rights

Employee rights

Employtee rights

Workers in Iceland have a number of rights that employers must respect regardless of the worker’s country of origin. Some of them are presented below.

Contract of employment

The employer and the employee should conclude a legal, written employment contract within two months from the actual date of commencement of work. Until such an agreement is concluded, the parties are bound by the terms of the collective agreement of the labor unions.

Time to rest

Every employee is entitled to a minimum rest period of 11 consecutive hours. Work should be organized in such a way that the working time does not exceed 13 hours, and the employee is entitled to at least 1 day off each week (7 days).

Pay slip

Each employee has the right to access his / her pay slip, which should contain the specified elements of remuneration (number of daily hours worked, number of overtime hours, tax amounts, etc.) and the details of the employer and employee.

Salaries and benefits

Wages and benefits are agreed between the labor unions and employers through collective agreements.

Employee rights

These arrangements include, inter alia, hourly wages for daytime and overtime work, terms of employment and the notice period for the employment contract. Rates may vary depending on the profession and degree of competence or education. Any agreements between employees and employers that lower the amounts set out in the collective agreement as minimum are, by nature, illegal.


Every legally employed worker in Iceland is entitled to paid vacation of a minimum duration of 24 working days. These days can be converted into holiday pay which, for a period of 24 days’ paid leave, equals 10.17% of the total pay. Holiday pay is paid to a special bank account, and then transferred to the employee’s account at the beginning of May each year. Leave pay and the number of paid vacation days increase in the case of long-term work in the same profession. Employees who are away from their place of employment due to illness, accident or maternity / paternity leave are charged vacation days in the same way as if they were at work.

Diseases and accidents

Every legally employed worker in Iceland has the right to receive wages for a certain period of time if they are unable to actively participate in work due to illness or accident (including an off-site accident). Except for situations in which an employee has had an accident – everyone is entitled to two paid sick days per month. In a situation where an employee has an accident (including an accident outside work), the employer is obliged to pay the remuneration for a period of three months.







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