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Employment in Norway

Norway’s employment law is codified by the Norwegian Employment Act of 2005. The Employment Act requires the employment contracts to be in writing. It is interpreted by the general courts. It is recommended that professional advice be sought when employing in Norway.

Key points on employment in Norway

There are several key areas to be aware of within Norway’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department.  These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.

  1. Contracts

    The Working Environment Act requires a written contract of employment to be provided in all employment relationships. This applies both to permanent and temporary work – irrespective of the duration of employment.

    The contract must state factors of major significance for the employment, such as a description of the place of work, the work to be performed, the trial period, the wage and wage-payment procedures, whether the position is permanent, fixed-term or temporary, the duration and disposition of the agreed daily and weekly hours, length of breaks, supplements and other remunerations not included in the pay, the number of vacation days and holiday pay, the period of notice required upon termination of employment and any relevant information concerning collective agreements regulating the employment relationship.

  2. Probation Period

    The probation period may be agreed for up to six months. If an employee has been absent from work during the probation period, the employer may extend the agreed trial by a period corresponding to the period of absence.

    Such an extension may only take place when the employee has been informed of this possibility in writing at the time of his appointment, and when the employer has informed the employee of the extension in writing prior to the expiration of the probation period.

    The right to extend the probation period shall not apply to absences caused by the employer. The Ministry may issue regulations permitting agreement on a probation period longer than six months in the case of certain groups of employees.

  3. Termination Procedures

    The employer may dismiss an employee if he or she is guilty of a gross breach of duty or other serious breach of the contract of employment. Unless otherwise agreed in writing or laid down in a collective pay agreement, a period of one month’s notice shall be applicable to either party.

    If an employee engaged by written contract for a given trial period is dismissed, the dismissal must be on the grounds of the employee’s lack of suitability for the work, or lack of proficiency or reliability. Before notice has been given, an agreement on a shorter period of notice may only be concluded between the employer and the employee’s elected representatives at undertakings bound by a collective pay agreement.

    Different periods of notice will be required depending on the employee’s years of employment.

    Employees may not be dismissed unless this is objectively justified on the basis of circumstances relating to the undertaking, the employer or the employee.

    Dismissal due to curtailed operations or rationalisation measures is not objectively justified if the employer has other suitable work in the undertaking to offer the employee.

    When deciding whether a dismissal is objectively justified by curtailed operations or rationalisation measures, the needs of the undertaking shall be weighed against the disadvantage caused by the dismissal for the individual employee.

  4. Statutory Leave

    Maternity Leave: After giving birth, the mother shall have leave of absence for the first six weeks unless she produces a medical certificate stating that it is better for her to resume work.

    Parental Leave: Parents shall be entitled to leave of absence pursuant to the provisions of this section and of sections 12-2 and 12-4 for a total of 12 months.

    When parental benefits are paid by the National Insurance, parents shall be entitled to leave of absence regardless. Unless the child is in the care of both parents, the right to leave of absence pursuant to the first paragraph may be exercised by another person taking care of the child.

    An employee who has sole responsibility for the care of a child shall be entitled to leave of absence pursuant to the second paragraph for a period of up to two years.

    Adoptive parents and foster parents shall be entitled to leave of absence pursuant to this section when taking over responsibility for care of the child. The same shall apply to an employee who has or is assigned parental responsibility on the death of the other parent and has had less than usual access to the child. The right to leave of absence shall not apply when adopting step children or when the child is over 15 years of age.

    Sick Leave: To be entitled for this leave it is necessary to be a member of the National Insurance Scheme. Also, it is mandatory to be occupationally disabled due to a disability that is clearly caused by own illness or injury. The individual must also have been working for at least four weeks.

    Furthermore, if the employee must lose pensionable income due to occupational disability, it is a condition that income for sick pay amounts to at least 50 percent of the National Insurance basic amount. This income limit does not apply to sickness benefits paid during the employer liability period.

    The occupational disability may be documented by a personal declaration or by a sick leave certificate from your doctor.

    It is possible to receive sickness benefits for a maximum of 52 weeks. This time limit applies even if you have been on full or partial sick leave.

    Annual Leave: The employer is required to grant the employee 25 working days of leave per leave year. An employee who reaches the age of 60 during the leave year is entitled to an additional 6 working days of leave. If the additional leave is divided up, the employee is entitled to take out only as many leave days as he normally works in a week.

    Pension: Unless otherwise agreed, salary shall be paid at least twice a month. No amounts may be deducted from pay except in respect of employees’ contributions to service pension schemes subject to the Company Pensions Act, the Contributory Pension Schemes Act or public service pension schemes.

    All persons residing or working as employees in Norway or on permanent or moveable installations on the Norwegian Continental Shelf, including noncitizen seamen serving on Norwegian ships outside territorial waters; citizens from European Economic Area (EEA) countries who pursue an activity as a self-employed person in Norway. The employer contributes 14.1% of gross payroll.

    Contributions are waived in certain geographic areas, except for enterprises in certain sectors and for employees aged 62 or older. The minimum earnings used to calculate contributions are 72,881 kroner.

    There is no maximum limit on the earnings used to calculate contributions. The employer’s contributions also finance sickness and maternity, work injury, and unemployment benefits.

Outsourcing Employment Through a GEO Employer of Record Service

Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Norway. For companies, which intend to employ their staff directly through their incorporated Norwegian entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Norway.

As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition, Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Norway.

The Shield GEO solution is an attractive alternative where:

– the company is looking to employ staff quickly

– the company doesn’t have an appropriately incorporated entity in Norway

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Norway

– the company needs help with tax, employment, immigration and payroll compliance in Norway

Shield GEO can contract directly with the company to employ and payroll their staff in Norway. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits.  Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.

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