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Hiring in Norway
Norway’s labor laws are very employee-centric, which consistently positions it as one of the best countries in the world for employment. Norway’s work culture is generally geared toward employee wellness and puts a strong emphasis on work-life balance.
When negotiating the terms of an employment contract with an employee in Norway, it may be useful to keep the following in mind.
Employment contracts in Norway
A written employment contract is legally required in Norway. It’s also very common for an employment relationship to be governed by a Collective Bargaining Agreement (CBA). The 2 major collective organizations in Norway are the Confederation of Norwegian Enterprise and the Norwegian Confederation of Trade Unions.
Employment contracts should specify the identities of both parties, place of work, work hours, description of the work or job title, probationary period (if applicable), compensation, holiday and holiday pay information, and termination requirements. Employment contracts should always state the salary and any compensation amounts in Norwegian krone (NOK) rather than another currency.
Working hours in Norway
Work hours must not exceed 9 hours per day, with 1 hour for lunch, or 40 hours every 7 days. Any hours exceeding the standard 9 hours per day and 40 hours per week are considered overtime, and employees must be paid at a premium rate of at least 40% over the normal rate or time off in lieu. Overtime generally must not surpass: 10 hours in a 7-day span, 25 hours over 4 consecutive weeks, or 200 hours throughout a 52-week duration. However, leading and independent workers are subject to more flexible working time regulations.
Holidays in Norway
Norway celebrates 8 national public holidays for which employees are given the day off. These holidays are:
- New Year’s Day
- Maundy Thursday
- Good Friday
- Easter Monday
- Ascension Day
- Whit Monday
- Christmas Day
- Boxing Day
Though not considered public holidays, some employers may choose to offer time off for Labor Day, Constitution Day, Christmas Eve, or New Year’s Eve.
Vacation days in Norway
The Norwegian Holidays Act provides for a 25-day annual holiday entitlement. Employees over the age of 60 are entitled to 31 days of annual leave. However, most companies in Norway provide 5 weeks of vacation.
Holiday pay is 10.2% of the annual remuneration if the employee is entitled to the statutory minimum annual holiday entitlement and 12.5% for employees over 60 years old. Holiday pay is typically disbursed annually every June.
Norway sick leave
In general, employers pay for the first 16 working days of sick leave. The Norwegian Labor and Welfare Service (NAV) pays from the 17th day forward unless different terms are stated in the employee’s contract or CBA.
Employees must inform their employer of illness-related absences. If the absence is longer than 3 days, then the employee should also provide a certificate from a doctor. Unless otherwise negotiated with the employer, sickness benefits are limited to 6 times the National Insurance basic amount per year.
Parental leave in Norway
In Norway, parents are eligible for a total of 12 months of leave for childbirth or adoption of a child — adoptive and foster parents share equal leave rights, with certain restrictions regarding stepchildren or older children.
This 12-month period includes the mother’s right to take up to 12 weeks of leave during pregnancy and an additional 6 weeks after giving birth. Those directly caring for the child, including other caregivers, may also have leave entitlements. Lone parents can extend their additional parental leave up to 24 months.
Parents that opt for the total parental benefit period receive 49 weeks per child at 100% coverage, or they may also take 59 weeks at 80% coverage.
Compensation during parental leave is covered by the National Insurance scheme, with a maximum limit of 6 times the basic amount, or the Grunnpensjon or “G” amount, which is about NOK 640,000. Many employers offer additional support to bridge the gap between the statutory entitlement and the employee’s salary.
Health insurance in Norway
All residents of Norway are entitled to public healthcare at no cost. For treatment at a private clinic without an affiliation to the public health system, the patient is accountable for the full expense.
EU members are entitled to the same level of care as citizens of Norway. Private health insurance is growing but only covers about 5% of healthcare services, and the vast majority of those are elective services. The care level is excellent, but there can be long wait periods that sometimes lead residents to seek out-of-pocket care in other countries.
Norway supplementary benefits
Generally, we recommend budgeting 20%for benefits on top of the gross salary for the total employer’s cost.
Termination and severance in Norway
Probationary periods in Norway are typically between 3 and 6 months, with 6 months being the statutory maximum. In case of termination, 14 days’ notice is common during the probationary period.
After this, the statutory termination notice period for employers ranges between 1 and 6 months, depending on the term of employment, age, and length of service with the company. However, it’s common to agree to 3 months’ notice. Notice of termination should be delivered in writing to the employee in person or sent by registered post to the employee’s home address.
When it comes to employees, they must abide by the notice periods established in the employment contract, which cannot exceed 3 months.
Employees have strong protections against dismissal in Norway, so all terminations must be objectively justified, and the burden of proof is on the employer. Before an employee is dismissed, the employer should call for a meeting with the employee to discuss the possible termination. The employee can bring an adviser to the meeting.
Paying taxes in Norway
The National Insurance Scheme system is financed by taxes as well as social security contributions from employers and employees. The scheme consists of:
- Retirement pension
- Disability pension
- Unemployment benefits
- Sick leave benefits
- Other social benefits
Employees in Norway must pay a national insurance contribution of 7.9% of gross wage income. The contribution rate is 11.1% for self-employed individuals. Employer contributions are assessed as a percentage of wages paid, but as a general rule, the employer’s contribution rate is up to 14.1%. This rate increases to 19.1% for incomes exceeding NOK 750,000.
All employers subject to taxation in Norway and employing a minimum of 1 worker must provide a supplementary pension scheme.
Additionally, Norway has adopted a dual-income tax. Under the dual income tax, income from labor and pensions is taxed at progressive rates, while capital income is taxed at a flat rate. In 2023, the ordinary income tax rate in Norway was 22%.
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