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 either industry-wide, sector-wide, or in some cases firm-specific, the type of position defined the negotiated wage levels.
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 the AOSH, which conducted both proactive and reactive inspections. The ministry can close workplaces that fail to meet safety and health standards.
In June an amendment to the law increased the authorities and responsibilities of the Directorate of Labor to provide greater protections for laborers. The law also increased the obligations of contracting companies to provide information about activities to the government to provide for actual conditions of employment and to prevent possible cases of labor exploitation.
The AOSH did not employ a sufficient number of inspectors to enforce standards effectively in all sectors. The AOSH levied daily fines on companies that did not follow instructions, urging them to improve work conditions. Daily fines were generally sufficient to deter violations. With the exception of certain asylum seekers, the government provided universal health-care coverage to all workers, including those in the informal economy.
Violations of wage, working hours, and overtime standards were most common in the construction and tourism sectors. The Icelandic Federation of Labor stated that young persons in the tourism sector as well as foreign workers--primarily men in the construction industry, some of them undocumented--were paid less than the negotiated minimum wage. 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.