Your Rights: Contract and Paycheck

1. Contracts

Signing a contract in Iceland can be confusing, especially for foreign workers. Here is an example of standard shift contract and what to pay attention to:


Click on the area you want to learn about

The Employers' information Your information RED FLAG - Your job description Full time / Part time The type of contract RED FLAG - Wages / Salary RED FLAG - Notice period, holiday pay and sick days Earned Rights RED FLAG - Unions Signature of both parties

The Employers' information

This is the official information regarding the company you will work for. Make sure there is a kennitala for the company.  You can check the kennitala in the kennitala registry here, and know the name of your highest boss:

Your information

They may sometimes ask for your Menntun - Education, if relevant for the job.

RED FLAG - Your job description

This is where the boss describe the tasks you are being hired for. This is a Red Flag area because many workers report differences between this description and reality. Make sure this fits what you are expecting. Also, some bosses may write "and anything that the manager may ask you to do". This is also a Red Flag because it gives the boss the chance to change your tasks.

Full time / Part time

This is where the contract stipulates how much you work. If you work part-time shifts, you will be "Hlutastarf". If the boss doesn't write a percentage next to it, it means your hours can change easily, and you won't be paid overtime if you do more hours than agreed on during the interview.
If the option is there, make sure the "samkvæmt kjarasamningi" - "according to collective agreement" is chosen. This forces your boss to follow the rules your union requested for your line of job.

The type of contract

This is where you know if you are hired on a permanent basis, or on a temporary basis. If you are hired on a temporary basis, then your contract ends on the said date without notice. If you are hired on a permanent basis, rules of firing/quitting notice period apply to both you and your employer.

RED FLAG - Wages / Salary

This is where your wage is decided. Make sure that "Skv. kjarasamningi" is chosen, this will force your boss to pay you AT LEAST the mininum wage agreed upon by unions.
The "dagvinna" refers to your base rate per hour, paid from 08:00 to 17:00 on weekdays. If you work evenings, week-ends, nights or holidays, your hourly rate will raise by 33%, 45% or 90% based on this "day work rate". See the "taxti"/ "hourly rate" from VR as an example.
This is also where the contract stipulates if you are paid "Monthly"/mánaðarlega or in another way. Your bank account may appear here too.
If you have commissions from sales for example, this should appear in "aðrar greiðslur" / other payments.
If you have "Hlunnindi" "advantages" coming with your job (meals or work outfit) it should appear here, and is paid by your employer.

RED FLAG - Notice period, holiday pay and sick days

Make sure "Samkvæmt kjarasamningi" / "According to collective agreement" is chosen here. This protects your rights. This means your boss will have to follow rules about notice period, holiday pay and sick days, and your union will be able to help you.

Earned Rights

This relates to your experience in a similar job. For example, if you have experience working in another hotel, you can ask to be paid as a "1 year" experience worker in a new hotel. This will make your salary higher.

RED FLAG - Unions

This is where you notify to which union you belong and which life assurance. This depends on your field of work. It is mandatory to have them. The biggest unions are VR and Efling for shift work. Many other exists, especially in the countryside. Your payslip will show that you pay them a monthly fee. In return, they have to help you in case of problem at work (mostly related to salary) or can give you grants for studies (icelandic classes for example) or sick days.

Signature of both parties

See contracts in more details:

Vinnumálastofnun – The Labor Directorate

VR – union

VM – union

2. Paychecks