EMPLOYER OF RECORD IN NORWAY
Norway is known as one of the best countries to expand a business in. People of Norway are highly educated and hard working, living standards in Norway are one of the highest in Europe.
Employer of Record service can help your company to expand without a legal entity in this country. This solution can also help to save money and time.
Table of contents:
- What is an Employer of Record?
- Pros and cons of hiring in Norway
- Details of employing in Norway
- Signing a contract
- Taxes
- Minimum wage
- Working hours and working overtime
- Holidays and paid time off
- Health insurance
- Employment costs
- mployee’s rights
Key insights about Norway
Officially titled the Kingdom of Norway, the nation functions as a constitutional monarchy with a parliamentary representative system. The monarchy assumes a ceremonial role, contributing to Norway's status as one of the most advanced democracies worldwide. According to the World Bank, Norway ranks fourth in global per-capita income.
Covering an area of 385,000 square kilometers, Norway spans the western and northern parts of Scandinavia, boasting the northernmost point on the European mainland. It shares borders with Sweden, Finland, and Russia, featuring predominantly mountainous landscapes. The coastline, famed for its fjords and numerous islands, borders the northern, western, and southern seas. The country's population stands at approximately 5.3 million.
Norway's southern and western regions encounter Atlantic storms, resulting in a wetter climate and milder winters compared to the north and east. Eastern lowland areas, including Oslo, witness lower rainfall, warm summers, and cold, snowy winters.
Guided by egalitarian ideals, Norway upholds a renowned welfare model, evident in high rankings on global indices such as World Happiness and Public Integrity. The country also maintains low crime rates. The government holds substantial ownership in vital industries, with the petroleum sector contributing around 25% to the GDP.
In 2017, the Church of Norway gained autonomy from the state. While about 70% of Norwegians affiliate with the Christian Church of Norway, regular attendance stands at only 2%. Nearly 30% identify with no religious beliefs, while the remaining populace mainly associates with various Christian denominations. Islam, constituting 4%, stands as the largest non-Christian religion.
Norwegian and Sámi are the official languages, with Norwegian sharing linguistic similarities with Swedish and Danish. The Sámi people in the north speak various Sámi languages, adding to the country's linguistic diversity.
Employment considerations in Norway
In the landscape of employment in Norway, the country's labor laws extend to both its citizens and foreign nationals, with certain nuances distinguishing their entitlements. Grasping these differences and other essential facets of Norway's employment regulations is vital.
Although Norwegian employment laws may appear complex initially, they align with the standards observed in many other countries. To navigate potential intricacies and streamline the establishment of a local office, it is advisable to partner with an informed local payroll provider. Such a collaborator can offer valuable insights into Norway's labor laws, addressing unique considerations for both local and foreign workers.
Norway's public holidays for 2021 encompass New Year's Day (1 January), Maundy Thursday (1 April), Good Friday (2 April), Easter Sunday (4 April), Easter Monday (5 April), Labor Day (1 May), Ascension Day (13 May), Constitution Day (17 May), Whit Monday (24 May), Christmas Day (25 December), and Boxing Day/Second Day of Christmas (26 December). Typically, holiday pay is distributed before the holiday.
The Working Environment Act in Norway prohibits employee discrimination based on age, gender, race, belief, political opinions, religion, social, national/ethnic origin, and sexual orientation. Employers are strictly prohibited from discriminating against both part-time and full-time employees.
Compensation structure in Norway
Distinguishing itself from certain nations, Norway does not adhere to a universal minimum wage; rather, wage levels are predominantly shaped by collective bargaining accords. In instances where such agreements are absent, the Norwegian Labor Inspection Authority (NLIA) steps in, particularly in sectors like construction, agriculture, and transport, to establish baseline wages.
As a standard practice, employees typically receive a minimum of 140 Norwegian Kroner per hour, roughly equivalent to EUR 12 and USD 13. It's crucial to emphasize that all wages set by the NLIA exceed this baseline.
The median income in Norway stands at USD 55,000, approximately NOK 573,329, surpassing the global average of USD 51,480 in the United States. Consistently ranking among the top countries globally in terms of average earnings, Norway achieves this distinction with fewer working hours compared to numerous other nations, highlighting the nation's dedication to achieving a harmonious work-life balance and overall well-being.
In global evaluations, Norway secured the seventh position in the 2023 World Happiness Report and claimed the ninth spot in productivity among nations. This dual recognition underscores the correlation between decreased expenditures, heightened efficiency, and favorable outcomes for employers. Norway's unique strategy of aligning economic prosperity with employee welfare sets it apart on the international platform.
Taxation in Norway
Responsibilities for employers:
Employers in Norway are required to submit their tax returns, concluding the fiscal year on December 31st. The corporate tax is calculated at 22% of the taxable profit. Non-residents encounter varying withholding tax rates:
- Dividends: 0% to 25%
- Interest: 0%
- Royalties: 0%
Employers also contend with payroll taxes linked to employees' salaries, wages, and benefits, with a fixed contribution of 14.1%. This contribution may see a reduction in sparsely populated regions. Medical treatment for children under 16 is provided without charge, while adults must make an annual payment to qualify for a lifetime exemption card, granting free medical insurance.
Supplementary pension fees, ranging from 2% to 25.1%, constitute additional contributions.
Considerations for Employee Taxation:
Both residents and non-residents are subject to income tax rates based on annual taxable income:
- NOK 180,800 - NOK 254,500: 1.9%
- NOK 254,501 - NOK 639,750: 4.2%
- NOK 639,751 - NOK 999,550: 13.2%
- Above NOK 999,550: 16.2%
Under the Norwegian National Insurance Act, citizens are eligible for a state pension at 67. Certain employees, including salaried workers, managers, and executives, may receive performance-based bonuses.
A comprehensive understanding of both employer and employee taxation is essential for businesses and individuals in Norway to ensure compliance with tax regulations and make well-informed financial decisions.
Employment agreements in Norway
In Norway, verbal contracts are legally binding and enforceable but are restricted to employment periods lasting less than one month. The Working Environment Act (WEA) mandates that contracts for longer employment durations must be documented in writing. Furthermore, all employment agreements must incorporate a probationary period, capped at a maximum duration of six months.
While fixed-term contracts are permitted under stringent conditions, indefinite contracts are more commonly preferred in Norway. If the nature of the work does not meet specific criteria justifying fixed-term employment, the relationship automatically transitions to a permanent status.
Seniority plays a crucial role, with both permanent and fixed-term employees eligible for increased benefits, such as annual leave and severance pay. For foreign employers, it is vital to align contract durations with the specific work requirements and ensure that contracts are designed to protect the benefits and entitlements of employees. A comprehensive understanding of these intricacies not only facilitates accurate headcount estimates and budget forecasting but also aids in preparing documentation for global expansion.
Employee entitlements and safeguards in Norway
Norwegian employees benefit from a comprehensive array of rights and protections designed to cultivate a just and secure work environment.
Written Employment Agreement:
Employees have the entitlement to a written employment contract, elucidating essential terms and conditions to ensure transparency and a clear understanding.
Salary Statement:
Employers are obligated to furnish detailed payslips, delineating earnings, deductions, and other relevant financial details.
Workload Adjustment Meeting:
In specific instances, employees possess the right to request a workload adjustment meeting, allowing for discussions and potential modifications to their work assignments and responsibilities.
Compensation During Non-Compete Period:
Employees subject to non-compete clauses are entitled to compensation during the stipulated period when engagement in competitive activities is restricted.
Whistleblower Safeguard:
Whistleblowers are legally shielded in Norway, safeguarding employees who report misconduct or illicit activities within their organizations from any form of retaliation.
Protection Against Discrimination, Harassment, and Unjust Termination of Specific Employee Categories:
Norwegian legislation prohibits discrimination and harassment, with specific employee categories, such as pregnant women and those on parental leave, shielded from dismissal under certain circumstances.
Working Environment Committee:
The establishment of a working environment committee is mandatory in workplaces with a specific number of employees. This committee concentrates on matters related to the work environment, health, and safety.
Overtime Remuneration:
Employees exceeding regular working hours are entitled to overtime pay, ensuring equitable compensation for additional work.
Unemployment Benefits:
Eligible individuals have the right to receive unemployment benefits in the event of job loss, providing financial support during periods of unemployment.
These rights and protections underscore Norway's dedication to guaranteeing the well-being and equitable treatment of its workforce, fostering a work environment that prioritizes transparency, fairness, and employee welfare.
Setting up payroll procedures in Norway
Effectively organizing payroll processes and navigating the intricacies of taxation in Norway demands a comprehensive grasp of the regulations, which may vary across different classifications. The initial pivotal decision revolves around whether the intention is to engage foreign professionals or local individuals.
For foreign enterprises, strict adherence to local tax statutes is imperative, covering areas such as income tax, business tax, withholding tax, employee compensation insurance, social security costs, and more. Two primary avenues are available for consideration:
In-house payroll administration:
Establishing an internal team dedicated to managing payroll operations within Norway.
This necessitates a profound understanding of local statutes and ongoing commitment to compliance.
Payroll outsourcing:
Opting for the services of payroll outsourcing in Norway.
This approach not only simplifies the payroll process but also guarantees comprehensive alignment with Norwegian regulations.
The selection between in-house payroll administration and outsourcing hinges on factors like the extent of operations, familiarity with local statutes, and the preference for streamlined compliance. Outsourcing payroll functions can provide efficiency and expertise, enabling businesses to concentrate on their core endeavors while ensuring precise and compliant payroll operations in Norway.
Recruitment procedures in Norway
The hiring landscape in Norway demands that employers engage in comprehensive assessments of potential recruits, encompassing elements such as prior work experience, educational background, and business affiliations. According to the legal framework governing employment contracts in Norway, it is incumbent upon employers to formulate a documented agreement for newly onboarded staff within a month of their commencement. These agreements must transparently delineate crucial particulars, including the nature of the role, remuneration, perks, working hours, provisions for additional work hours, and terms of termination.
For those in pursuit of employment opportunities in Norway, there are diverse avenues to explore:
- Website - Arbeidsplassen: Presents an extensive compilation of available job positions. The site exclusively operates in the Norwegian language.
- Eures: A prominent job search platform accessible in multiple languages.
- Gulesider: Highlights job postings that may not be readily discovered on alternative platforms.
- Finn Website: Hosts a majority of job listings, albeit presented in the Norwegian language.
Establishing a subsidiary in Norway
Before initiating operations in Norway, careful consideration of the following aspects is essential:
Business Considerations:
Several factors demand evaluation before establishing a business in Norway, including:
- Business type and industry
- Existing trade relationships and agreements
- Nationality of individuals and headquarters
Location:
Different cities in Norway are associated with distinct laws, expenses, and resources. Consulting with a legal advisor is crucial to navigate these variations effectively.
Language:
Norwegian is the primary language, spoken by 95% of the population, closely followed by English at 90%.
Norway legally recognizes various business forms based on the organization's size and minimum share capital:
1. Private Limited Liability Company - Aksjeselskap (AS):
- Commonly used for small and medium-sized businesses.
- Larger companies employ this entity to establish a subsidiary in Norway.
- Requires a minimum of two directors, including a European/Norwegian.
- Mandatory minimum paid capital of NOK 30,000.
2. Norwegian Public Limited Company (ASA):
- Must be listed on the stock market.
- Significant decisions are made by shareholders during the general meeting.
3. Sole Proprietorship:
- An incorporation where an individual assumes liability for the business.
- No separate laws govern sole proprietorships.
4. Partnership:
- Governed by the Partnership Act 1985.
- Involves a commercial business established jointly by two or more partners.
- One partner has unlimited personal liability for the business's total obligations.
5. Branch:
- A business establishment by a foreign company.
- Managed locally and employs personnel from Norway.
Visa types in Norway
1. Work permit (skilled labor):
Requirements:
- Passport and a copy of all filled pages.
- Cover letter from the Application portal or the signed application form.
- Recent passport size photos (two) with a white background.
- Proof of residence in Norway.
- Duly filled Norwegian Immigration Authorities (UDI) Offer of Employment form.
- Documents related to educational background and work experience.
- Applicant's CV.
- Duly filled and signed UDI’s checklist.
2. Intra-company transfer:
Applicable for employees of international companies assigned to a Norwegian branch.
Requirements:
- Completion of a vocational training program of at least three years at the upper secondary school level.
- Education or degree from a university/university college.
- Proof of special qualifications acquired through long work experience, equivalent to vocational training.
- Processing times vary based on the application type and channel.
3. Business visa (Schengen visa type C):
- Norway encourages free trade and foreign investments, providing a business-friendly environment.
- Schengen Visa is for business and family visits with a return to the country of residence.
- Valid for a maximum of 90 days within a 180-day period, with no extension provision after entry.
These visa categories serve different purposes, and meeting the specified requirements is essential for a successful application. It's important to note that processing times can vary, and applicants should choose the appropriate channel for submission based on their specific circumstances.
Paid time off benefits in Norway
Norwegian employees are entitled to diverse leave privileges, each governed by specific regulations.
Stipulated in the Annual Holidays Act, annual leave benefits hinge on age and the standard workweek. Individuals below 60 years receive 21 days for a 5-day workweek and 25 days for a 6-day workweek, with compensation set at 10.2% of basic pay. Those aged 60 and above enjoy an extended entitlement of 26 days (5-day workweek) and 31 days (6-day workweek), with compensation elevated to 12.5% of basic pay. Collective agreements have the authority to tweak these entitlements, offering individuals under 60, 25 days (5-day workweek) and 30 days (6-day workweek) at 12% of basic pay, while those above 60 receive 30 days (5-day workweek) and 36 days (6-day workweek) at 14.3% of basic pay.
Sick leave provisions allow for up to 16 days with full pay, and a sickness benefit covering up to a year is granted, calculated based on the average salary of the last three calendar months. Should illness strike during planned vacation, employees can assert sick days, substantiated by medical evidence, safeguarding their allotted vacation days.
Promoting work-life balance, parental leave is a collaborative effort between parents, offering 100% pay for 49 weeks or 80% pay for 59 weeks, underscoring Norway's commitment to nurturing a pliable and employee-centric work environment.
Regulations governing additional work in Norway
In Norway, the Working Environment Act (WEA) provides a framework for the standard workweek, spanning from Monday to Saturday, excluding Sundays and public holidays. The prescribed maximum weekly limit stands at 40 hours over seven days, with a daily cap of nine hours within a 24-hour period. However, the actual weekly working hours commonly settle around 37.5, typically influenced by collective bargaining agreements.
Engaging in work during nighttime or on Sundays is generally restricted unless the nature of the job necessitates it. In such instances, weekly hours are often confined to 36 to 38. Explicit legal provisions do not explicitly address additional compensation for night work, occurring between 21:00 and 6:00. Employees engaged in Sunday work are entitled to days off the subsequent Sunday and weekend.
Overtime, permissible only under exceptional circumstances, encompasses any hours worked beyond the established weekly limits, reaching up to 13 hours per day and 48 hours per week according to the WEA. Collective agreements define overtime as hours exceeding the agreed-upon amounts in individual contracts, typically capped at 20 hours per seven days. With the consent of the employee, total hours, including overtime, may extend up to 16 hours per day. The Norwegian Labor Inspection Authority (NLIA) may grant approval for overtime work up to 25 hours per seven days and 400 hours per 52 weeks upon the employer's application.
Compensation for overtime, as mandated by law, must be at least an additional 40% of the hourly pay rate. In collective agreements, compensation cannot fall below this threshold and often exceeds it. An alternative compensation for overtime is time in lieu, where each hour of overtime is offset by an equivalent hour of compensatory time off.
Within the realm of collective agreements, work on Sundays and any of Norway's 12 public holidays is remunerated at 100% of the hourly wage. Labor performed on May 1 (Labor Day) and May 17 (Constitution Day) attracts an additional 50% pay, provided these dates do not coincide with Sundays or other public holidays.
Mandatory benefits in Norway
In Norway, employees are entitled to various statutory benefits that form a crucial aspect of the country's employment framework. These include:
1. Healthcare coverage: Norwegian employees benefit from comprehensive medical coverage, ensuring access to essential healthcare services without shouldering the full financial burden.
2. Supplementary pension provisions: Additional pension benefits are a compulsory element of Norway's employment structure. These provisions offer employees financial support beyond the basic pension, contributing to their long-term financial stability.
3. Occupational injury insurance: Norwegian labor laws mandate work injury insurance, providing protection to employees in case of injuries sustained during the course of employment. This coverage encompasses medical expenses and potential income loss resulting from work-related injuries.
4. Mandatory medical assessments: As part of the employment process, employees may undergo mandatory medical examinations. These assessments are designed to ensure the well-being of employees and may be conducted periodically to assess fitness for specific job roles.
These legally mandated benefits underscore Norway's commitment to preserving the well-being and rights of its workforce, fostering a comprehensive and supportive work environment.
Voluntary perks in Norway
I. Embracing remote work - Many Norwegian employers empower their workforce with the flexibility of remote work, allowing individuals to fulfill professional obligations while attending to personal matters.
II. Financial security boost - While not compulsory, life insurance emerges as a prevalent elective advantage that employers extend to fortify the financial stability of employees and their families.
III. Privatized healthcare coverage - Some companies offer supplementary health insurance schemes, granting employees access to specialized medical services outside the public healthcare system.
IV. Equity opportunities - Stock options, a discretionary incentive, are occasionally provided by companies, affording employees the opportunity to acquire company shares at a predetermined rate and potentially gain from the company's performance.
V. Complimentary sustenance - Certain workplaces present free meals or subsidized dining alternatives as an added benefit, contributing to a positive workplace atmosphere.
VI. Assistance with relocation costs - Corporations may furnish financial aid or cover the expenses related to relocation for employees moving due to work-related circumstances, ensuring a seamless transition.
VII. Extra financial support during parental leave - Some employers go beyond statutory mandates by offering supplementary financial assistance to employees on parental leave, acknowledging the significance of maintaining a work-life balance.
VIII. Fitness club memberships - Provision of gym memberships is a prevalent non-mandatory benefit, endorsing employee well-being and a health-conscious lifestyle.
IX. Adaptable work hours - The flexibility of working hours allows employees the autonomy to tailor their schedules, fostering improved integration of work and personal life.
These optional advantages highlight the dedication of Norwegian employers to cultivating a positive and attractive work environment, with a primary focus on enhancing employee contentment and well-being.
Probationary duration and employment conclusion protocols in Norway
In Norway, an employer possesses legal justification to conclude an employee's tenure under various circumstances, encompassing economic rationales (e.g., redundancy), personal grounds (e.g., inadequate performance or severe misconduct), or through a consensual termination contract.
During instances necessitating a temporary reduction in the workforce, employers may initiate provisional layoffs. If a disagreement arises regarding termination, the employee may persist in their role until the courts issue a legal verdict on the matter. While Norwegian law does not explicitly mandate severance pay, it is customary to incorporate it into termination agreements.
The standard trial period for employees in Norway spans six (6) months. Upon successful completion of this period, employees become eligible for an array of benefits and entitlements. Clearly articulating the particulars of the probationary term, including its duration and subsequent benefits, in the Norwegian employment contract is crucial. In the event of termination by either party, written notice must be furnished to the other party.
The notice timeframe fluctuates based on the employee's tenure:
- During the probationary phase: 14 days.
- Less than five years of employment: 1 month.
- Between five and ten years of employment: 2 months.
- Ten years and above (for employees below 50 years of age): 3 months.
- Ten years and above (for employees over 60 years): 6 months.
These notice intervals constitute integral facets of the termination process and should be clearly delineated in the employment contract, ensuring transparency and adherence to Norwegian employment statutes.
Delineating between contractors and full-time employees in Norway
The classification of individuals as contractors or full-time employees in Norway is contingent on the following criteria:
Full-Time Employment:
Characterized by a formal employment arrangement with fixed working hours.
Involves a predetermined monthly remuneration.
Signifies that the employer guides the individual's work and establishes a notice period.
Companies aiming to engage full-time employees must fulfill the criteria of a Norwegian employer.
Taxes for full-time employees are subtracted by employers from their salary, with the employee's tax typically constituting 14.1% of their earnings.
Contractors:
Identified when work is conducted under the contractor's name, at their discretion, and at their own risk.
Compensation may be adjusted for subpar performance, and contractors generally utilize their equipment at their premises.
The tax obligation for contractors is 18% of their income.
Contract employees are frequently enlisted for brief, project-based assignments.
Grasping these distinctions is vital for both employers and individuals to ensure adherence to Norwegian employment regulations and tax responsibilities aligned with the specific nature of the working arrangement.
Pros and cons of hiring in Norway
Norway is known as one of the best places to run your own business. This country has high GDP per capita and the highest education expenses. As a result Norwegians are one of the most skilled and professional employees in the world. High costs of employing and taxes in Norway may seem like a disadvantage of expanding a business to this country, but all things considered it is highly beneficial for every company.
Norway is not a member of the European Union, but it belongs to the EEA - European Economic Area. That is also beneficial for a company, because it simplifies formal procedures. Also citizens of EU and EEA member states can move to Norway and work there without any formalities. Work and residence permit is required when the employee is not an EEA member state citizen.
You should get familiar with Norwegians' lifestyle before hiring them. They prefer talking directly and rarely start small talk. They are punctual and they value their personal space and home life.
What is an Employer of Record?
Employer of Record (EOR) is one of the simplest ways to hire new employees in a new country without a legal entity. It allows your company to expand into the whole world and reduce some costs. All the formalities become the external entity’s responsibility, but the main company makes all decisions. EOR is also known as a time saving solution, when it comes to expanding a business to a new country.
Professional Employer Organization (PEO) and Employer of Record (EOR) serve distinct roles in the realm of workforce management
PEO (Professional Employer Organization):
- Works collaboratively with your company to manage employee-related tasks and payroll.
- Shared responsibility between the PEO and your business for compliance management.
- Collaborative approach, with both entities playing a role in HR functions and responsibilities.
EOR (Employer of Record):
- Assumes full responsibility for compliance management, alleviating the client company of this burden.
- Comprehensive service that takes care of payroll, benefits, and other employment-related obligations.
- Provides a more hands-off approach for the client company, as the EOR takes on the role of the legal employer.
In essence, while both PEO and EOR involve external entities aiding in employment-related functions, the key distinction lies in the level of responsibility each assumes. PEO involves shared responsibility, with the client company actively participating in various aspects, while EOR takes on a more comprehensive role, handling compliance and administrative tasks, allowing the client company to focus on its core operations.
Advantages of employing remote workers in Norway:
1. Highly Educated Workforce: Norway boasts a well-educated workforce, particularly in the 25 to 34 age group, surpassing the OECD average in tertiary education.
2. Global Talent Competitiveness: Ranking seventh on the 2022 Global Talent Competitiveness Index reflects Norway's strong standing in talent readiness, education, and innovation.
3. STEM Emphasis: The nation's focus on STEM education has resulted in a highly skilled workforce, with women constituting a significant percentage of scientists and engineers.
4. Transition to Technological Hub: Norway's shift from a major oil exporter to a technological hub showcases its growth and adaptability in the global marketplace.
5. Cost-Effectiveness: The cost of hiring an employee in Norway, approximately 1.27 times their base salary, positions it as a valuable investment for foreign employers.
6. No Permanent Establishment Requirement: Hiring in Norway doesn't require permanent establishment status, reducing costs for global hiring initiatives.
7. Employer of Record (EOR) Benefits: Leveraging an EOR platform enhances cost-effectiveness, as foreign employers typically incur taxes only on specific payments, making it an economical option for global hiring initiatives.
Guidelines for choosing the right Employer of Record (EOR) for your Business
Selecting the ideal Employer of Record (EOR) for your business necessitates thoughtful consideration of various key factors. Primarily, it's imperative to verify that the chosen EOR possesses the necessary legal authorization to operate in Norway, ensuring their geographic coverage aligns with your global hiring requirements.
In addition to legal compliance, the array of employment services offered by a competitive EOR assumes paramount significance in the decision-making process. A comprehensive suite of services should encompass critical facets such as hiring, onboarding, global payroll management, benefits administration, and HR management.
The reputation of the EOR stands as another critical aspect to evaluate. Prioritize EORs with a proven track record and relevant experience. Understanding their past work and local expertise is essential, contributing to the overall value they bring to your business.
Cost considerations hold a central position in the decision-making process. Opt for an EOR with transparent and reasonable pricing, ensuring that the services provided align with the value they bring to your business.
Flexibility emerges as a key factor in an EOR partnership. The ability to provide customized employment solutions tailored to meet the specific needs and requirements of your business adds significant value to the collaboration.
In summary, foreign employers should choose an EOR that delivers cost-effective, reliable, and compliance-centric employment solutions. This strategic choice empowers businesses to confidently and seamlessly navigate global expansion with trust and ease.
Details of employing in Norway
Signing a contrach
Every employee in Norway has a right to get a written employment contract within a month after getting a job, even if it is a temporary employment. Contract must contain employee’s and employer’s personal data, state the employee’s responsibilities and duties, working hours, the amount of paid time off, notice period, benefits and the employee's salary. Payment method and timing also must be included in the contract. Usually employees get paid once a month. Other important information, that every contract should contain, is the location of work and date of commencement.
Probation period can be max. 6 months long. When the probationary period is ending, employers must give 2 weeks’ notice to employees before the end of a contract. It is not necessary when the contract is going to be extended for another length of time.
Norway law allows temporary employment, but under some circumstances. Most contracts are signed permanently. Employment becomes permanent when it doesn’t meet the requirements of temporary employment. Temporary employment may last no longer than a year.
Employer can dismiss the employee when the employee’s work is below the standards of the company. The information of termination must be written and given to the employee in person. Employee can appeal against the employer's decision if he considers the reason for dismissal as unreasonable. Basic notice period is 1 month long. It can be longer for employees, who had worked for the company for a long time. Normally it extends to 3 - 6 months. Employees can be dismissed without notice when their behaviour is unacceptable. Employee also can submit a written resignation to the employer.
Taxes
Every employee in Norway is obliged to pay taxes. These are three basic taxes: ordinary income tax (22% of gross wage income), national insurance contribution (8.2%) and pension contribution (5.1%). Another important tax is VAT, which rate is 25%.
A person who is self-employed must pay the self-employment income contribution which is 11.4% of gross wage income.
Taxes paid for labour and pension income have progressive rates (0%-16.2%). The tax rake depends on the amount of income. Capital income has a flat tax rate. That's because of a dual income tax.
Minimum wage
Minimum wage in Norway is set by collective agreements, not by the government. These agreements are made by the country's unions. They decide about that taking into consideration how difficult the job is, employee’s age and skills that are necessary for this job.
Working hours and working overtime
In Norway employees usually work for 40 hours per week (8 hours a day). Some collective agreements shorten this time to max. 37,5 hours per week. Employees can work overtime up to 10 hours a week, 200 hours per 52 weeks. Working overtime must be paid at a rate of 140% of the regular employee’s income.
Employees must have a break for at least 11 hours before the next working day and at least 35 hours break before next week.
Holidays and paid time off
Employees in Norway can get at least 3 weeks of paid time off. Many collective agreements extend this to a minimum 5 weeks. Employees can take three weeks leave between the 1st June and the 30th September.
When the employee gets sick he can take 3 days off work. When it takes longer to go back to work, employee must present a medical certificate. Employee get paid for the first 16 days of their sick leave by the employer. After that time The National Insurance Scheme pays for that.
At the time of public holidays in Norway employees get paid time off.
Female employees have the right to get paid time off during pregnancy. It can take up to 12 weeks before childbirth and minimum 6 week after childbirth. Also female employees can take up to 59 weeks of paid maternity leave at a rate of 80% of the regular employee’s income. A father has the right to get two weeks of unpaid time off to help the mother.
Health insurance
Everyone in Norway has the right to healthcare. When they decide to go to public hospitals they get healthcare for free. Private healthcare is fully paid for by the patient.
Norway law requires every employee to have occupational injury insurance. When a work related injury happens, the employee has to report it to the Norwegian Labour and Welfare Administration and has a right to receive compensation.
Employment costs
The main employment cost is a social security contribution. It is 14.1% of an employee's gross wage income. Also they have to provide necessary training for their employees.
Employee’s rights
Discrimination based on gender, age, race, religion, sexual orientation or political opinions is prohibited.
Benefits that an employee can get, depend on the employee’s achievements, general work performance.
