Norway

Norway PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Norway to companies willing to enter the Norwegian market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Norway.  However our solution allows you to start the operations in Norway within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. .

Norway fast facts

Population, million: 5.4
Land area: 385,207 km²
Capital: Oslo
Local currency: Norwegian krone (NOK)

Hiring, Negotiating and Doing Business in Norway

Necessity of written employment contract

An employee should be appointed permanently as a main rule (section 14-9, WEA).

All employee relationships must be subject to a written employment contract, which should be entered into “as early as possible”, and within one month following the commencement of employment at the latest (section 14-5, WEA).

Different forms of engagement: employment, contracting, work with private entrepreneur

Temporary workers

When the duration of the temporary employment contract ends, the employment also ends. Similarly, when a temporary employee receives notice from their employer, his employment ends. The temporary employees still have the right to contest the legality of the notice, but the temporary employee is usually not allowed to remain in the position pending the court’s decision. However where a permanent employee receives notice from their employer, he has the right to remain in his position until the case has been heard by the court and a legally binding verdict has been given.

If an employee is hired on a temporary basis for more than four consecutive years, the provisions concerning termination of employment relationships will apply to him.

When an employee has been employed on a temporary basis for four years or less, whether the provisions concerning termination of employment relationships apply will be considered on a case-by-case basis.

If an undertaking classified an ordinary employment relationship as a temporary one, without the necessary legal basis, this may result in legal proceedings from the employee in question, and also a claim for compensation.

Agency workers

Agency workers are expected to be protected by Directive 2008/104/EC on temporary agency work (Temporary Agency Work Directive), which is in the process of being implemented.

Norway Employment Contract

The minimum requirements regarding the content of the employment contract are (section 14-6, WEA):

  • The identity of the parties.
  • The place of work.
  • A description of the work or the employee’s title.
  • The date of commencement.
  • Provisions regarding the trial period, if applicable.
  • If the employment is temporary, the expected duration.
  • The right to holiday and holiday pay, and the provisions concerning the fixing of dates for holiday.
  • The notice period.
  • The pay and other remuneration at commencement.
  • The daily and weekly working hours and lengths of breaks.
  • Any agreement regarding special working-hour arrangements, if applicable.
  • Information regarding collective agreements relevant to the employment, if applicable.

Norway Working hours

Normal working hours must not exceed nine hours per 24 hours and 40 hours per seven days (section 10-4 (1), WEA). Working time means the time when the employee is at the disposal of the employer. The WEA calculates these provisions using average normal working hours.

Vacation leave in Norway

Under the Holidays Act, employees are entitled to a minimum annual holiday of 25 “workdays”. Saturdays are considered workdays, and so the minimum annual holiday is four weeks and one day. Holiday pay must be 10.2% of the annual remuneration if the employee is entitled to 25 workdays’ annual holiday.

Although 25 workdays are the requirement under the Holidays Act, a majority of Norwegian enterprises provide five weeks of vacation either based on collective agreements, individual employment contracts or as an employer policy. The holiday pay should in these situations be 12% of the annual remuneration.

Norway Maternity Leave

The mother is entitled to a leave of absence for three weeks prior to giving birth. After giving birth, the mother must take a leave of absence for the first six weeks unless she produces a medical certificate stating that it is better for her to resume work.

Paternity rights

In connection with childbirth, the father is entitled to two weeks’ leave of absence in order to assist the mother. If the parents do not live together, this right to leave can be exercised by another person who assists the mother. This leave is unpaid and not entitled to financial support under the National Insurance Act of 28 February 1997, No. 19.

Norwegian Severance Laws

An employment relationship may be terminated in various ways

The employment relationship is usually terminated by a dismissal/resignation by one of the parties. If the employment contract is materially breached by the employee, this may lead to summary dismissal.

An employment relationship may also be terminated by mutual agreement between the parties.

For an employee, losing his/her job in the form of a dismissal with notice, summary dismissal or suchlike is a serious issue, and may have dramatic consequences. It is therefore important for employees to be aware of their rights if they should end up in such a situation.

For both private and municipal employees, it is the Norwegian Working Environment Act which regulates questions relating to the termination of employment relationships.

Government employees are subject to separate rules concerning dismissal with notice/summary dismissal stated in the Norwegian Civil Service Act and Public Administration Act. Government employees have slightly stronger protection against unfair dismissal compared to the rules stipulated in the Working Environment Act. 

The employer must have reasonable grounds for dismissing the employee

A dismissal with notice by an employer will be based on either the employee’s circumstances or the enterprise’s circumstances. In both cases, reasonable grounds must be stated for the dismissal and the employer must deal with the matter in a proper manner.

Dismissal with notice based on the enterprise’s circumstances

A dismissal with notice based on the enterprise’s circumstances will usually be due to a situation in which a reorganisation/restructuring of the operations leads to a need to downsize.

When assessing the reasonableness of this, several factors are important.

A government employee who has a continuous period of service of more than two years (temporary employees with a continuous period of service of more than four years) may only be dismissed with notice when the post is abolished or the work is discontinued, see section 10 of the Civil Service Act. An employee may also be dismissed with notice if he/she is permanently unfit for the post.

Before being dismissed with notice, a government employee is, if possible, to be offered other suitable work in the agency if he/she has a continuous period of service of at least one year (so-called internal preferential right).

It may also be relevant for the employee to receive severance pay from the Norwegian state.

Norway Tax

There are no payroll taxes other than national insurance contributions and financial activities tax.

Every employee in Norway must pay a national insurance contribution of 8% of gross wage income.  The contribution rate for other kinds of personal income (pensions, etc.) is 4.7%.  Employer contributions are assessed as a percentage of wages paid, but as a general rule, the employer’s contribution rate is approximately between 16 and 29%.

Health Insurance Benefits in Norway

Entitlement to time off

The employee is entitled to time off during the entire period he is sick. Where the sick leave is no more than three days, it is, as a rule, sufficient that the employee hands in a self-certification note to his employer. If sick leave goes beyond three days, the employee must hand in a medical certificate from a physician.

Entitlement to paid time off

The employee is entitled to sick pay when he is unable to work due to his own illness or injury. The employer is obliged to pay the employee sick pay from the first day, and 16 days afterwards (also called employer’s period). The sick pay is by law limited to six times the basic amount of the National Insurance. The basic amount is currently NOK79.216 (as at 1 August 2012, NOK1 was about EUR0.13).

Recovery of sick pay from the state

After the employer’s period expires, the National Insurance Scheme is responsible for paying sick pay. Sick pay is given by the state for up to one year. The employer cannot recover sick pay made during the employer’s period.

Additional Benefits in Norway

It is common for salaried employees in higher positions, consultants, and those in management to receive stock options. Generally, we recommend budgeting 20% for benefits on top of the gross salary to allocate the total employer’s cost including benefits in Norway.

Norway Holidays

There are the following public holidays:

  • New Year’s Day.
  • Maundy Thursday.
  • Good Friday.
  • Easter Monday.
  • Labour Day (1 May).
  • Constitution Day (17 May).
  • Ascension.
  • Whit Monday.
  • Christmas Day (25 December).
  • Boxing Day (26 December).

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

 

FAQ Norway

  • Norway Working hours

    Normal working hours must not exceed nine hours per 24 hours and 40 hours per seven days (section 10-4 (1), WEA). Working time means the time when the employee is at the disposal of the employer. The WEA calculates these provisions using average normal working hours.

  • Norway Holidays

    • New Year’s Day.
    • Maundy Thursday.
    • Good Friday.
    • Easter Monday.
    • Labour Day (1 May).
    • Constitution Day (17 May).
    • Ascension.
    • Whit Monday.
    • Christmas Day (25 December).
    • Boxing Day (26 December).
  • Norway Tax

    There are no payroll taxes other than national insurance contributions and financial activities tax.

    Every employee in Norway must pay a national insurance contribution of 8% of gross wage income.  The contribution rate for other kinds of personal income (pensions, etc.) is 4.7%.  Employer contributions are assessed as a percentage of wages paid, but as a general rule, the employer’s contribution rate is approximately between 16 and 29%.

  • Hannah Kohl
    Author:
    Hannah Kohl. Head of Customer Success. Has extensive experience in the HR and IT industries. Helped 100+ international clients to achieve their global goals.

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