Employment Law

Employment Contracts in Norway

Norway is known for having some of the most comprehensive labor laws in the world. It's a great place for workers and helps improve living standards, but it can also make it difficult for businesses to ensure compliance with the law.

It is always important to provide your employees in Norway with a written employment contract that includes all relevant employment details such as wages and benefits. It needs to be written in Norwegian and use the local currency, Norwegian krone.

Working with our Norwegian PEO, Remoly's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

Fixed Term

Indefinite

Working Hours in Norway

Normal working hours in Norway are 40 hours per week and 9 hours per day (including 1 hour lunch break). Anything above this will usually require overtime pay, which is 140% (or more) of regular wages.

There are restrictions on overtime work. Employees generally cannot work more than 10 hours of overtime in a week, 25 hours in four weeks, and 200 hours in a year.

Holiday Policy

Norway Vacation

Norwegian employees are entitled to four weeks and one day of paid holiday, but many employers offer five weeks. This is usually borne by the employer and accrues during the first 12 weeks of each year.

The salary is usually equivalent to 10.2% of the qualifying period, 12% if the allowance is five weeks, and 12.5% ​​if the employee is over 60 years old.

Norwegian Sick Leave

Employers in Norway are generally required to pay employees for their first 16 days of sick leave. In addition to this, the government pays the fees (unless a different agreement has been reached beforehand).

Sick leave payments are limited to 600% of standard National Insurance payments.

Parental Leave in Norway

Women in Norway get three weeks of paid leave before giving birth and are typically required to take at least six weeks of paid leave after giving birth. Men are entitled to two weeks of unpaid leave. Parental leave pay is usually paid by the government rather than the employer. There is a salary cap above which no parental benefits will be paid, but the employer may choose to pay the employee additional amounts. Employees can spend up to 47 weeks (if 100% of wages) or 57 weeks (if 80% of wages) until the child turns three years old.

Termination and Severance in Norway

Norwegian employees are usually given between three and six months' notice before their contract is terminated, with three months being the most common. The exact length depends on several factors, such as age, length of the character, and more.

Employees on probation are entitled to a shorter notice period, usually around two weeks. The trial period usually lasts about three to six months.

Norway has particularly robust employee protection measures, so it is crucial to follow appropriate procedures, such as holding a formal meeting about the dismissal, where the employee can bring a representative and the employer has valid grounds for dismissal.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Remoly's Norwegian PEOs can reduce risk for foreign companies and provide guidance along the way.

Taxes in Norway

Norway's extensive social benefits are funded by relatively high tax rates. Income tax has a flat rate of 22%, but there are additional "bracket rates" that are progressive, so those with higher incomes pay more tax. This level of tax ranges from 0% to 16.2%, depending on income level.

Employees must also pay National Insurance contributions, which account for 8.2% of total wage/salary income, with lower contribution rates for other forms of income such as pensions. Employers are also required to contribute to the fund. Rates vary based on salary, but are typically between 16% and 29% of salary.

Employers are also required to pay into employee pension funds, but the specific terms may vary depending on your circumstances and employee preferences.

For companies, tax rates are different for resident and non-resident companies. Resident companies are taxed on their worldwide income, while non-resident companies are taxed only on their income within Norway . The corporate tax rate is 22% of profits.

Health Insurance in Norway

Norway has a universal public healthcare system, so all healthcare is free at the time of use. As a result, it is not common for employers to offer private health insurance, but some employers do choose to include it as part of their benefits package.

Salary and Benefits

Norwegian Compensation Law

There is no legally mandated minimum wage in Norway. However, unions may have negotiated minimum wages in some industries, so it's important to understand the relevant rules that apply to your situation before hiring.

Welfare Management in Norway

The process of setting up the Norwegian welfare system can be confusing if you are not familiar with the complex labor laws, language and cultural differences. Be prepared for a time-consuming process and potential delays.

Remoly can help you bypass this complex part of your Norwegian expansion by providing benefits system outsourcing, saving you time and money. Our experts will advise you on the best course of action and take care of your benefits set-up and management, helping you focus on the rest of your expansion.