Yes, there are legal minimum wage requirements in Norway. Violations of these rules can be fatal for the reputation of the company. The media does not regard the fact that the rules regarding minimum wage are complex, or whether or not the violation of the rules was intentional. Below you will find some simple clarifications within the area of minimum wage requirements in Norway:
Minimum wage is determined by Norwegian law
In the US, there are minimum wage requirements which most Americans are familiar with. In the EU, most of the member states also have statutory minimum wage requirements. How does this work in Norway – are there statutory requirements relating to minimum wage?
The answer to this question is absolutely “YES”. However, my observation is that the minimum wage requirements in Norway, are more complex than compared to both the EU-countries and the US. The complexity is probably also the main reason why many Norwegians believe that the minimum wage is relevant solely in collective agreements so that Norwegian based employers who are not party to a collective agreement can “choose” to take it into consideration.
Well, for some instances it is not possible to choose. Within the construction industry, for the electrical trades, in the maritime construction industry, agricultural- and horticultural industries, cleaning industry, fish processing industry, freight transport by road, and passenger transportation by tour bus, some of the minimum wage requirements in the relevant collective agreements have been made “generally applicable”. Making the minimum wage requirements in the collective agreements “generally applicable” imply that the minimum wage requirements are valid as law (via regulations). The main purpose of making the requirements “generally applicable” is to prevent social dumping. During the past few years we have experienced an increasing trend towards making the minimum wage requirements “generally applicable” in several sectors.
Statutory minimum wage requirements may also occur outside of the areas of “generally applicable” collective agreements. For example, if a company hires personnel from a temporary work agency, the employees who are hired in are entitled to receive the same salary as if the employee had been recruited directly to perform the same work.
Furthermore, minimum wage requirements may also apply when performing work on a public contract and for employees residing outside the EU/EEA.
Minimum wage requirements based on other sources than law
Minimum wage requirements are also relevant outside the statutory instances. Naturally, minimum wage requirements apply for instances where the employer is obligated to comply with a collective agreement. Minimum wage requirements may however also apply if contracting parties through commercial contractual obligations have undertaken to follow specific salary levels even if the parties are not directly bound by a collective agreement.
Calculation and payment of minimum wage
When it is determined that the minimum wage provisions apply, it may be a challenging exercise to actually determine the levels of the minimum wage, including the different increments. For instances whereas undertakings in Norway utilize foreign labour paid according to a net salary arrangement, this question is particularly complex. In the end, this is a question of how the minimum wages should be calculated. As a main rule, the minimum wage should be paid in cash, in the sense that for instance covering board and lodging cannot be included when calculating the payment of the minimum wage.
Violations of the minimum wage requirement – a potential disaster for the reputation?
Violations of the minimum wage requirements may have serious consequences in terms of imprisonment and fines. However, from my perspective the most severe risk for enterprises doing business in Norway in terms of violations of the minimum wage requirements is the potential for comprehensive loss of reputation that a violation of the minimum wage provisions may cause. Loss of reputation may occur even if the violation was not intentional
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