Employment lawyers in Iceland

Employment law covers the relationship between employers and employees: employment contracts, wages and working hours, holidays and sick leave, parental leave, dismissal and the rules that protect workers against discrimination and unsafe conditions.

Collective agreements come first

The Icelandic labour market is built on collective agreements (kjarasamningar) negotiated between trade unions and employers' organisations. Under Act No. 55/1980, the wages and terms in these agreements are minimum terms for everyone working in the sector, whether or not they are union members, and an individual contract cannot reduce them.

Union membership is very high in Iceland, and the unions are usually the first place to turn for help with unpaid wages or a dispute with an employer.

Other key laws

• Act No. 80/1938 on trade unions and industrial disputes, which also establishes the Labour Court (Félagsdómur) for disputes about collective agreements.
• Equal Status Act No. 150/2020: equal pay for work of equal value and protection against gender discrimination.
• Act on Equal Treatment in the Labour Market No. 86/2018: protection against discrimination based on origin, religion, disability, age and other grounds.
• Rules on working environment and safety, supervised by the Administration of Occupational Safety and Health (Vinnueftirlitið).

Dismissal and unpaid wages

An employee is entitled to the notice period set by the contract and the collective agreement, which grows with length of service. Pregnant employees, parents on leave and union representatives enjoy special protection. See dismissed from work in Iceland?

Wage claims generally expire after four years. If the employer goes bankrupt, unpaid wages can be claimed from the Wage Guarantee Fund (Ábyrgðasjóður launa).

Foreign workers

Foreign workers have exactly the same rights under collective agreements as Icelanders. Common problems include wages below the agreed minimum, unpaid overtime and housing deductions. Workers from outside the EEA should also check how a change of job affects their residence permit.

When to contact an employment lawyer

Contact your union or a lawyer if you are dismissed in a way you think is unfair, if your employer does not pay what the collective agreement requires, if you face discrimination or harassment at work, or, as an employer, before you dismiss staff or draft employment contracts.