Section 7. Worker Rights
a. Freedom of Association and the Right to Collective Bargaining
The law provides for the right of workers to form and join independent unions, bargain collectively, and conduct legal strikes. The law prohibits antiunion discrimination. It is silent on whether workers fired for union activity should be reinstated, but it allows for fining employers who engage in this practice. The law permits the government to pass a provisional law to impose mandatory mediation when strikes threaten key sectors in the economy.
The government effectively enforced the law. Inspection was sufficient to enforce compliance and penalties for violations (damages and fines) were commensurate with those for similar crimes.
The government and employers respected freedom of association and the right to bargain collectively. Collective bargaining agreements covered nearly 100 percent of the formal economy’s workforce. Independent contractors in various industries, but mainly in construction and tourism, sometimes hired subcontractors to avoid hiring workers with bargaining rights.
b. Prohibition of Forced or Compulsory Labor
The law prohibits all forms of forced or compulsory labor.
Law enforcement authorities and the Administration of Occupational Health and Safety effectively enforced the law. Resources were adequate during the year, although there were no prosecutions. The law is sufficiently stringent compared with those on other serious crimes, and penalties for violations were commensurate.
Some instances of forced labor occurred. Traffickers subjected men and women to forced labor in construction, tourism, and restaurants. Foreign “posted workers” were at particular risk of forced labor because traffickers paid them in their home countries and contracted them to work for up to 183 days in the country under the guise of avoiding taxes and union fees, limiting tax authorities’ and union officials’ ability to monitor their work conditions and pay. Foreign workers have the same rights that are afforded to local workers in collective bargaining agreements. Union officials noted that they do take legal action on the behalf of workers, regardless of whether union dues had been paid.
Also see the Department of State’s Trafficking in Persons Report at https://www.state.gov/trafficking-in-persons-report/.
c. Prohibition of Child Labor and Minimum Age for Employment
The law prohibits the worst forms of child labor and provides for a minimum age of employment, including limitations on working hours, occupational safety, and health restrictions for children. According to the law, children who are 13 and 14 may be employed in light work up to 12 hours per week and a maximum of two hours per day outside organized school teaching hours during the school year and up to 35 hours a week or a maximum of seven hours per day during school vacations. They may not work between the hours of 8 p.m. and 6 a.m. Children between the ages of 15 and 18 who do not attend school may work up to 40 hours per week and a maximum of eight hours per day, but not between the hours of 10 p.m. and 6 a.m. For children who remain in school, the law limits work to 12 hours per week and a maximum two hours per day during the school year, but up to 40 hours per week and a maximum eight hours per day during school vacations. They may not work between the hours of 8 p.m. and 6 a.m. Children younger than 18 may not be employed in hazardous work as specified by law.
The government effectively enforced applicable laws. Penalties were commensurate with those for similar crimes. Inspection capacity was sufficient to enforce compliance.
d. Discrimination with Respect to Employment and Occupation
The constitution and other laws prohibit employment discrimination in general and provide for fines determined by the courts for violations. The law provides for equal treatment in the labor market, without regard to race, ethnicity, age, religion, beliefs, disability, sexual orientation, gender identity, intersex status, or gender expression. The law does not specifically address HIV/AIDS or refugee status. Under the law, individuals, companies, institutions, and nongovernmental organizations can refer cases to the Gender Equality Complaints Committee, which rules on appointments and salary-related matters.
The government effectively enforced the law in most areas, but instances of employment discrimination occurred. Penalties were commensurate with those for similar violations. Despite laws requiring equal pay for equal work, a pay gap existed between men and women. Disability rights advocates asserted that persons with disabilities had a more difficult time finding jobs due to prejudice and because fewer job opportunities, especially part time, were available for persons with disabilities.
e. Acceptable Conditions of Work
The law does not establish a minimum wage. The minimum wages negotiated in various collective bargaining agreements applied automatically to all employees in those occupations, including foreign workers, regardless of union membership. While the agreements can be industry-wide, sector-wide, or in some cases firm-specific, the type of position defined the negotiated wage levels, which were higher than the poverty level.
The law requires that employers compensate work exceeding eight hours per day as overtime and limits the time a worker may work, including overtime, to 48 hours a week on average during each four-month period. Overtime pay does not vary significantly across unions, but collective bargaining agreements determine the terms of overtime pay. The law entitles workers to 11 hours of rest in each 24-hour period and one day off each week. Under specially defined circumstances, employers may reduce the 11-hour rest period to no fewer than eight hours, but they must then compensate workers with corresponding rest time later. They may also postpone a worker’s day off, but the worker must receive the corresponding rest time within 14 days. The Administration of Occupational Safety and Health (AOSH) monitored and enforced these regulations.
The law sets occupational health and safety standards that are appropriate for the main industries, and the Ministry of Welfare administered and enforced them through AOSH, which conducted both proactive and reactive inspections. Workers can remove themselves from situations that endanger health and safety without jeopardy to their employment. AOSH can close workplaces that fail to meet safety and health standards.
The government effectively enforced the law. AOSH employed a sufficient number of inspectors to enforce standards effectively in all sectors. AOSH levied daily fines on companies that did not follow instructions, urging them to improve work conditions. Daily fines were commensurate with those for similar violations. With the exception of certain asylum seekers, the government provided universal health-care coverage to all workers, including those in the informal economy.
The Icelandic Confederation of Labor stated in its annual report for 2020 that economic growth in recent years has resulted in an influx of foreign workers who are subject to exploitation. The exploitation primarily centered on foreign workers receiving salaries below negotiated minimum wages. Although violations of occupational safety and health standards occurred in all sectors, violations occurred most frequently in the construction and food industries. Young workers and employees who did not understand or speak Icelandic and did not know local rules and regulations were more likely to be subjected to hazardous or exploitative working conditions.