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World Wide Work Permit provides employer-of-record services for customers that want to hire employees in Norway. Your candidate is hired via World Wide Work Permit Norway PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Our comprehensive solution and Global PEO service enable customers to run payroll in Norway while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Norway.
Your new employee is productive sooner, has a better hiring experience, and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. World Wide Work Permit allows you to harness the talent of the brightest people in 187 countries around the world, quickly and painlessly.
Norway is located on the western edge of the Scandinavian peninsula and includes the archipelago of Svalbard in the Arctic Ocean, which has a population of about 2,450 and is the northernmost settlement in the world. Norway as a whole has a population of over 5 million and is a constitutional monarchy, headed by King Harald V.
Norway’s labor laws are considered among the most generous in the world, and it is consistently recognized as one of the best countries in the world in which to work. Norway’s work culture is generally very supportive of employees and puts a strong emphasis on balancing the demands of employee work and home life.
Norwegians are known for being humble and highly egalitarian. It is considered rude to draw attention to one’s self. The communication style tends to be direct and honest, and exaggeration is not received well. Bring lots of facts and data to meetings to support your proposal, and be sure to arrive on time. The management style in Norway is similar to the U.S., and while consensus is sought, the decision rests with the boss. Pro tip: don’t talk about Norwegians as being like Swedes and Danes; they won’t appreciate it.
When negotiating terms of an employment contract and offer letter with an employee in Norway, it may be useful to keep the following standard benefits in Norway in mind:
A written employment contract is legally required and should be entered into within one month following the commencement of employment. It’s also very common for an employment relationship to be governed by a Collective Bargaining Agreement (CBA). The major collective organizations in Norway are the Confederation of Norwegian Enterprise and the Norwegian Confederation of Trade Unions.
Employment contracts should spell out the terms of the employee’s compensation, benefits, and termination requirements. An employment contract should always state the salary and any compensation amounts in Norwegian Krone rather than a foreign currency. The employment contract template is part of the service with a World Wide Work Permit; no need to draft a separate template if you use our employer of record and PEO service in Norway.
The standard workday is 9 hours per day, with one hour included for lunch. Exceptions are often made for parents with small children, personal appointments, and sickness.
Any hours worked in excess of 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 provided time off in lieu.
Work hours should not exceed more than 10 hours of overtime per week, 25 hours of overtime every 4 weeks, and 200 hours of overtime per every 1 year.
Norway celebrates 10 national public holidays for which employees are given the day off, including:
The Norwegian Holidays Act provides for a 4 week and one-day annual holiday entitlement. However, most Norwegian companies provide 5 weeks of vacation either based on the CBA, employment contract, or as part of the employer’s policy.
Holiday pay must be 10.2% of the annual remuneration if the employee is entitled to the statutory minimum annual holiday; 12% if entitled to 5 weeks; and 12.5% for employees over 60 years old. These are typically paid out every June.
In general, employers pay for the first 16 calendar 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 notify their employer if they are absent due to illness.
Unless otherwise negotiated with the employer, sickness benefits are limited to six times the National Insurance basic amount per year.
Female employees are entitled, if they choose, to take up to 12 weeks of leave during pregnancy. From the first day after giving birth, the mother is obliged to take maternity leave for six weeks unless they produce a medical certificate stating that it is better for them to resume work. The father is entitled to two weeks’ unpaid paternity leave in connection with childbirth to assist the mother.
Male employees have the right to 15 weeks of full pay.
Parents are entitled to a total of 12 months’ leave in connection with the birth and after the birth. These 12 months include the mother’s right to leave for up to 12 weeks during the pregnancy and six weeks of leave reserved for the mother after the birth. Immediately after the end of this period of leave with benefits, each parent is entitled to up to 12 months, per child, of additional parental leave without pay or benefits. Lone parents are entitled to up to 24 months of additional parental leave.
Unless stated in the employment contract, employers are not obliged to pay parental leave to employees while on leave; parental benefits are paid by NAV.
All residents of Norway are entitled to healthcare at public hospitals at no cost. For treatment in a private clinic that does not have an arrangement with the public health system, the full cost falls on the patient. EU members are entitled to the same level of care as Norwegian citizens. Private health insurance is growing, but only covers about 5% of the healthcare services, and the vast majority of those are elective services. The care level is excellent, but there can be long wait lines that sometimes lead to residents seeking out-of-pocket care in other countries.
It is common for salaried employees in higher positions, consultants, and those in management to receive stock options. Generally, we recommend budgeting 20% for benefits on top of the gross salary to allocate the total employer’s cost including benefits in Norway.
Probationary periods in Norway are typically between 3 and 6 months. It is common to agree to 14 days’ notice of termination for employees during the probationary period.
The statutory notice period for an employer when dismissing an employee varies between 1 and 6 months, depending on the term of employment, age, and length of service with the company. It is most common to agree to 3 months’ notice.
Employees giving notice normally have to observe notice periods as agreed to in the employment contract, but these cannot be longer than 3 months.
Before an employee is dismissed, an employer must call for a meeting with the employee to discuss the possible termination of employment. The employee can bring an adviser to the meeting.
The National Insurance Scheme system is partly financed by social security contributions from employers and employees, and partly by taxes. The scheme consists of:
Every employee in Norway must pay a national insurance contribution of 8.2% of gross wage income. The contribution rate for pensions is 5.1% while the self-employment income contribution is 11.4%. Employer contributions are assessed as a percentage of wages paid, but as a general rule, the employer’s contribution rate is approximately between 6.8 and 20.7%.
It is compulsory for all employers that are taxed in Norway and who have a minimum of one employee to provide for a supplementary pension scheme. The pension scheme can be one of the following:
Both types of pension schemes can be funded or insured by a life insurance company.
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. The ordinary income tax rate in Norway is 22% in Norway as of 2020.
Establishing a branch office or subsidiary in Norway to engage a small team is time-consuming, expensive, and complex. Norwegian labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. World Wide Work Permit makes it painless and easy to expand into Norway. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up a foreign branch office or subsidiary. Our Norway PEO and Global Employer of Record model provides you peace of mind so that you can focus on running your business.
If you would like to discuss how World Wide Work Permit can provide a seamless employee leasing or PEO solution for hiring employees in Norway, please contact us.