Your rights at work

It is important to know and guard your rights at work. On this site you can read about the most important rights and employment terms. The Icelandic trade union movement has fought for these rights in a century long battle, and it is vital that we protect them together.

On this page

If you have any doubts or questions about your rights, you should contact your trade union

Wages and other terms

According to Icelandic law, wages and other terms of employment are negotiated by trade unions and employers. They set the minimum rights for all workers. It is important that you know which collective agreement applies to your job because it gives you information about the wages, rights and obligations that apply to your job. Most collective agreements are available on the union website.

It is important to remember that wages and other terms that you negotiate with your employer can never be less than what the collective agreement says. It is, however, perfectly OK to negotiate higher wages and better terms than stated in the collective agreement.

Wages and other terms should be clear before you start working. It is more difficult to negotiate these things after you have started working.

Trial periods should always be paid

Foreign workers should get wages in accordance with their diplomas and work experience. Qualifications need to be formally recognized by the relevant public authority.

Check your payslip

Always check your payslip to see if everything is OK

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Flat hourly rate (I. jafnaðarkaup)

A flat hourly rate for daytime and overtime work does not exist as a specific rate. If you are working for such a rate there is a risk you are getting less money than if you were being paid day work wages for daytime hours and overtime pay for overtime hours.

Working hours

Icelandic law provides a general rule for working hours, defining a full-time job as max. five 8-hour days per week, 40 hours in total.

However, the collective agreements of the individual unions define in detail how the working hours of workers should be organised. Any overtime hours should be paid with overtime pay.


Certain jobs require a professional degree, special authorisation or special job-related certifications, such as an advanced driving license. Education from abroad can often be officially recognised in Iceland, and in some cases, experience in the profession can also be validated.

Rest and holidays

Rest and days off

Workers are entitled to a minimum of 11 hours consecutive rest during each 24-hour period and at least one day of rest per week. Circumstances may allow for a shorter rest.

Mealtimes and coffee breaks

Mealtimes and coffee breaks are organised differently between workplaces. Mealtimes are usually 30-60 minutes. You should also get coffee breaks, generally 5 minutes for each worked hour. Remember that you have a right to mealtimes and coffee breaks.


Holiday rights are twofold; the right to take holidays, and the right to holiday pay. All workers have a right to a summer holiday.

Holiday pay is calculated off the monthly salary and is generally 10.17%. Holiday pay can be paid in one of the following ways:

  1. The worker keeps her/his normal wages while on holiday
  2. Holiday pay is collected in a separate bank account
  3. Holiday is paid out each month on top of the wages. This is especially common in temporary jobs

When leaving a job, remember that you have a right to any unused holiday pay you might have

December and holiday bonuses

The December bonus is paid out in December. If you are employed during the first week of December OR have worked for the same employer for 12 weeks consecutively, you have a right to a December bonus.

The holiday bonus (I. orlofsuppbót) is paid out in June. If you are employed at the end of April, beginning of May, OR if you have worked for the same employer for 12 weeks consecutively during the holiday year, you have a right to a holiday bonus.

December bonuses should be settled at the end of employment

Sickness rights

Illness and accidents

When you get ill or have an accident and cannot go to work due to your illness, you have a right to stay at home. Icelandic law provides a minimum right to two paid sick days per worked month. Illness must be reported to the employer, otherwise you might lose your right to wages during your sick leave.


Accidents at work

If you are injured at work, or on your way to or from work, you have a right to sickness benefits in addition to your sick days, in the form of daytime wages for up to three months. Remember to talk to your union if you are injured at work.

Remember to talk to your union if you are injured at work

Children's sick days

Collective agreements provide workers a right to stay at home when their children are sick for up to two days each worked month, without any loss in daytime and shift work wages. After 6 months of work, you have a right to 12 days for every 12-month period.

Remember to inform your employer when you have to stay at home due to your child’s illness.

Employment contract (I. ráðningarsamningur)

You should ask to have a written employment contract right from the start.

The employment contract should list the following:

  • name of worker and employer
  • workplace
  • a short job description
  • first day of work
  • period of employment if it is for a limited time
  • monthly or hourly wages
  • length of the working day
  • name of pension fund
  • a reference to a collective agreement.

Remember to negotiate your job terms in writing at the start of employment, and later if any changes are made to your employment terms

Temporary or indefinite employment contracts

Employment contracts can be either temporary, such as from June 1 until September 1, or indefinite, that is without an end date of employment.

If an employment contract does not say that it is temporary, it is considered indefinite. In that case the employer must give you a notice period as defined in your collective agreement.

Contractors must file their own taxes and insurance payments


Some employers encourage their staff to work as contractors. If your employer encourages you to sign a contractor agreement, think carefully about what consequences that might have for you.

If you work as a contractor, you are essentially running a small business. A contractor does not enjoy the same protection as a regular worker.

If you work as a contractor, you are essentially running a small business

A contractor does not have a right to

  • paid holiday
  • a notice period
  • wages during illness or after suffering accidents

Contractors must also file their own taxes and insurance payments.

Undeclared work (black work)

Sometimes, employers offer people undeclared work (sometimes called black work). The deal is usually higher pay in return for not announcing it to the tax office. Undeclared work is illegal and does not benefit workers. Undeclared work does not ensure workers various rights they would otherwise have, and which can make a big difference if the worker suffers any setbacks or shocks.

It is important to make a rental agreement with your landlord

Renting from your employer

It is important to make a rental agreement with your landlord. If you rent a room or an apartment from your employer, you should always have a separate rental agreement. You have certain rights as a tenant, whether you still work for the employer or not. You always have a right to a notice period, generally 3 months for a room and 6 months for an apartment.

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It is a violation of Icelandic law and workers' rights to let volunteers replace employees in a regular job


It is a violation of Icelandic law and workers' rights to let volunteers replace employees in a regular job. In Iceland, volunteer work is only allowed in case of non-economic charities and cultural or humanitarian activities. Employment contracts stipulating less favourable terms than those provided for in collective agreements are invalid.

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If you want to quit your job, or your employer wants to lay you off, it must happen via a formal resignation. Collective agreements determine the notice period.

If you want to quit your job, you must do it in writing. The notice period generally starts at the beginning of the next month. You must work through your notice period, and you maintain all your rights during that time as a regular worker.

An employer may decide, when laying somebody off, that they do not have to work through the notice period. Employers are allowed to do this, but they must pay full wages for the notice period. Other income during the notice period may be deducted from the pay.

Remember to get a written confirmation in case your employer does not want you to work during the notice period.

If you have been laid off and have not yet found another job, you should register as unemployed at Vinnumálastofnun (Directorate of Labour)  to acquire the right to unemployment benefits.

 For further information contact your local trade union.

If you or someone your know are being exploited at work
contact us using our form

Icelandic labour law

For more information about labour rights in Iceland, see our website on Icelandic labour law

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