Employ Candidates Compliantly in Norway

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  1. Overview: Norway
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global HR Compliance in Norway

If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Norway Guide below will help you understand the nuances of labor legislation in the country.

There are two main reasons for companies hiring foreign workforce:

  • Expanding into foreign markets to sell company product or products there. In this case, companies hire sales representatives who would exclusively represent their product in the target market and sell it to their local client base.
  • Hiring the right foreign talent with a unique expertise, often related to IT sphere that cannot be found in the home country or that costs less compared to local specialist with similar skills.

After you have found the right candidate, the question is how to hire and provide compensation to this person so you as a business remain 100% compliant when working with global workforce. Another thing to consider is whether you want to keep the talent long-term and how you can do that.

If you need to hire foreign workforce in Norway so you can expand there, then our Global Employer of Record solution may be of help. We help you legally hire and reward your foreign workforce by making them employees via a global employment outsourcing service. This is simple as employ your in-house workforce with the only difference that workers can live anywhere in the world and Acumen International would be their legal employer on your behalf. This means we would bear all employment risks, not you. Also, we manage bonuses, vacations, sick leave and can rent the office and a car for your foreign sales representatives if that is what you need.

With our solution, you can test new foreign markets before deciding whether you are going to get established there. You gain flexibility and expand with reduced costs, and easily withdraw from the unattractive countries.

We are experts in global workforce employment in Norway, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Norway.

See the guide below for a general overview of labor rules and regulations in Norway. Or contact us if you need to employ workers in Norway or would like to get more details.

Hiring and Firing Workforce in Norway Guide

Norway has a long history of economic stability, high standard of living, full involvement in EU and all these constitute some of the key factors that make it very attractive to entrepreneurs who wish to expand internationally. In spite of Norway’s good record of being one of the easiest places to do business, there are still some tough nuts to crack if one must succeed in his enterprise there. Among other things, there is need for one to grasp the country’s employment regulatory framework, as well as ensure that all its components are complied to, and therein lies one of the biggest challenges.

The good news is that there is an alternative way to go about this situation. All you need to do is employ the services of a locally sourced provider who knows the ins and outs of the employment law in Norway. Global employer of Record is all you need to do that.

Below are some of the key facts about doing business in Norway

# Employment Agreements

Permanent employment contracts

The general rule in the Working Environment Act is that employees must be employed on a permanent basis. Permanent employment means that the employment does not have a predetermined end date, and that the rules regarding termination of employment applies. The employment contract must also include information about how much the employee is expected to work. However, subject to certain conditions and in certain situations, you can still make temporary appointments or use hired labour.

Casual employment contracts

The use of casual workers must be based on an agreement. Casual workers are temporarily employed for individual assignments. Casual workers may only be used insofar as the need is covered by the rules concerning temporary employment. As a general rule, it is possible to use this type of agreement in order to cope with short-term peaks in workload. Depending on the basis on which the employee was temporarily employed, he or she will be entitled to a permanent position upon appointment for more than three or four years. 

Fixed-term contracts

The main rule is fixed employment. If a person is employed temporarily, certain requirements in the Working Environment Act must be met, for instance that the employee shall work for someone who is temporarily absent or that the nature of the work justifies the use of a fixed term contract. If the requirements are not met, the consequence is that the employee is considered permanently employed. The same rule applies for employees who have a fixed term contract for more than four consecutive years in the same company.

Collective agreement

The role of the state is limited to facilitating negotiations (providing statistics and relevant information ahead of negotiations) and to providing a legal framework for resolving disputes of interest. 

#Employment Termination and Severance Pay (Dismissal)

Dismissal from the employee must be in writing. If the dismissal from the employee is not in writing, it is nevertheless not deemed as invalid, see wording in the Working Environment Act Section 15-5. The employee has certain right to withdraw a dismissal within the so-called rules of re-integra. The main rule is that a dismissal from the employee is legally binding, though it may be withdrawn:

  • If the notice of withdrawal is given within reasonable time (usually no more than a week. 
  • If special circumstances constitute the basis for the withdrawal.
  • The employer has not arranged matters in accordance with the dismissal. 

Employers may dismiss their employees either with notice (discharge) or without (dismissal). Discharge, with notice, is the customary method of termination. In both cases, the Working Environment Act draws up a procedure that must be followed before the employee is informed on the company’s decision (discharge or dismissal). Dismissal without notice is only lawful if the employee has committed a fundamental breach of contract, such as gross misconduct or disloyalty, i.e., by working for a competitor. Thus, dismissal should be executed only in extraordinary circumstances. An employer may only give notice to terminate an employment if such a decision is based on objective grounds

#It is prohibited to dismiss

Employee has a special protection from dismissal during sickness. Pursuant to the provision an employer, who is wholly or partly absent from work owing to accident or illness, may not be dismissed for that reason during the first 12 months after becoming unable to work. An employee, who is pregnant may not be dismissed on the grounds of pregnancy. Pregnancy shall be deemed the reason for dismissal of a pregnant employee, unless other grounds are shown to be highly probable. Furthermore, an employee who has leave of absence following birth or adoption of child, for up to one year, shall not be given notice of dismissal that becomes effective during the period of absence, if the employer is aware that the absence is due to such reasons or the employee notifies without undue delay that the absence is due to such reasons

#Notice period

The statutory minimum period of notice is the following: 

The Probation (trial) period  14 days, from date to date  
Less than five years  One month  
Employment of at least five consecutive years  Two month  
Employment of at least ten consecutive years  Three months
Employment of at least ten consecutive years and the employee is above 50 years of ageFour months  
Employment of at least ten consecutive years and the employee is above 55 years of age  Five months
Employment of at least ten consecutive years and the employee is above 60 years of age  Six months

#Severance payments

Even though an employer is not obliged to offer severance package in cases of dismissal, it is not uncommon for the parties to enter agreements with such packages. 

An agreement of severance usually has the following provisions:

  • Provisions of duty and exemptions of work until the discontinuance of the employment relationship.
  • Provisions of severance pay, disbursement of payment and how its structured.
  • Provisions of Holiday and holiday pay.
  • Provisions of return of property of the employer, which the employee has in his or her possession (computer, company car, keys etc.).
  • Provisions of refund of possible expenses pursuant to the employment relationship. >/li>
  • Provisions of handover of work assignments, email etc. 
  • Provisions of discontinuance of the employment relationship, including withdrawal of the employee from the employers’ pension and insurance schemes.
  • Provision of tax deductions and placement of tax risk.
  • Provision that an employee disclaims the right to initiate legal proceedings concerning the employment relationship, including its termination, and disclamation of possible preferential right to new employment in the undertaking. 

#Employee Benefits and Contributions

Mandatory benefits required by law to be provided by an employer

  • Social security 
  • Healthcare and insurances
  • Required leave (holidays and annual Leave, maternity / paternity Leave, sickness leave, pregnancy leave, leave of absence to care for a child, pensions)

Non-mandatory benefits that are offered by an employer

It is quite common to reward key employee’s/management employees through bonus payments in addition to a fixed salary, especially within certain business sectors, for example, consultancy and sales. Bonuses are usually based on individual agreements but can also be the result of regular practice at the company or collective agreements.

#Probationary period

A general rule, probationary periods are allowed. An employment contract may include a “trial period” for a maximum of six months. To be valid, the trial period must be regulated in the written employment contract. The trial period may be extended if the employee is absent during parts of the trial period, and such absence is not caused by the employer, provided that the employee has been informed of this extension possibility in writing at the time of his appointment. This is normally done by including a clause in the written employment contract. Also, the employee must receive written information about the prolongation prior to the expiration of the trial period. 

#Overtime

Mandatory overtime pay is an increase of salary by 40 percent, although the increase is often set to 50 percent in collective agreements or employment contracts. The increments must be paid; the overtime hours may be paid in time taken off work instead of through payment (time of in lieu or banked time). Night work is prohibited unless the nature of the work makes it necessary. The employer has a duty to discuss night work with worker representatives, and night work would reduce working time. Work during weekends is similarly forbidden unless the nature of the work makes it necessary.

#Work hours

The prescribed limits to normal working time in the Working Environment Act are: 

  • 9 hours per 24 hours 
  • 40 hours per 7 days

#Annual leave

Employees in Norway are entitled to an annual vacation of 21 working days (or 25 days if Saturdays are included). Employees who are 60 years old or older are entitled to an additional week of vacation. Many collective bargaining agreements also provide four additional vacation days for all employees. To receive full pay for vacation days, an employee must have been employed during the entire previous calendar year. If this is not the case, the employee may still take vacation, but the vacation pay will be reduced accordingly.

#Sick leave

If employees are absent from work due to illness or injury, he or she is entitled to payment from the employer for the first 16 days of the absence (the employer-paid period). After the employer-paid period of 16 calendar days, the responsibility of paying the employee is passed on to the Social Security. The amount of sick pay from the Social Security is limited. In order to receive sick pay, the employee must immediately notify his or her employer of the sickness and, if ill for four or more days, the employee must obtain a doctor’s certificate. In the case of an oral notification of absence due to illness, the employer may require a written confirmation from the employee upon his or hers return to work. The employee may have a contractual right to full payment from the employer through his or her individual contract of employment.

#Parental leave

Parents have the right to a total leave of 12months, including the righ to pregnancy leave and the right to maternity leave. In addition, each parent has the right to 12 months of leave for each birth. The leave must be taken immediately after the parent’s pregnancy leave and maternity leave. 

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