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