Confused about the recent changes to employment law in Norway? Don’t worry. In this article, we’ll take you through everything you need to know about Norway’s newly introduced restrictions on hiring temporary employees — and what they could mean for your business.
Hiring temporary employees in Norway
Before we get into the recent changes to the law, we need to understand a key concept: Norway’s employment law is built around a core principle that everyone should be permanently employed.
That doesn’t mean everyone stays with the same employer forever — or that temporary employment doesn’t exist at all. But it does mean that the standard arrangement in Norway is a permanent employment contract, which only ends when either the employee resigns, or the employer terminates their employment.
The Norwegian view is that an emphasis on permanent employment creates benefits for employers, employees and society as a whole. With that in mind, let’s take a look at some of the recent changes to the law.
July 2022: Limitations on hiring temporary employees
Before 2022, employees in Norway were able to hire temporary employees for up to 12 months, as long as they didn’t make up more than 15% of their workforce. If they met these requirements, employers didn’t have to give a reason for hiring these employees temporarily.
Above this quota, companies would have to justify any temporary employment contracts — but the 15% limit was viewed as a ‘catch-all’ provision that didn’t require any justification.
In July 2022, the government removed this provision. Going forward, temporary employment would only be allowed if one of the following conditions applied:
- The work was of a temporary nature
- The work was to temporarily replace another employee
- The employee was a trainee
- The work was part of a government-run labour market scheme
- The employees were athletes, trainers, referees or other important figures in organised sport
Employers would also have to discuss the need for temporary or fixed-term employment with union representatives.
April 2023: Further restrictions on hiring temporary agency workers
At the end of 2022, the government proposed further restrictions to temporary work arrangements in Norway, which were adopted on 1st April 2023. Specifically, the new rules concerned the use of staffing agencies to source temporary workers.
Before this year, the conditions for using temporary work agencies were essentially the same as those required for temporary employment in general. In other words, companies would have to show that the work met one of the five conditions listed above if they wanted to hire a temporary worker through a staffing agency.
But as of April this year, the government has removed the temporary nature of a job as a justification for using agency-sourced temp workers. That means that hiring from staffing agencies is now only possible if one of the other four criteria applies.
In most cases, this means that companies can only hire agency workers to replace employees who are temporarily off work — for example because of maternity or sick leave.
Exceptions to the rules
There are certain exceptions to the new rules:
- Agency workers will still be allowed for healthcare staff if this is needed to keep health and care services running effectively.
- Companies will also still be able to use staffing agencies to employ advisors or consultants, as long as their work is tied to a clearly defined project.
- Staffing agency workers will still be allowed within the agricultural sector.
What else has changed?
The Norwegian government has introduced several other changes in addition to the rules outlined above. We’ll cover a few of them below.
More rights for temporary workers
In line with the general principle that workers should be permanently employed where possible, a further change to the law will make it easier for temporary employees to obtain permanent contracts. Going forward, employees who have been temporarily employed for more than three years will automatically be considered to be permanently employed. That means they’ll be entitled to the same rights and benefits as permanent employees.
Restrictions on the construction industry
Part of the new law includes a complete ban on temporary agency workers on construction sites in three regions: Oslo, Viken and the former Vestfold. This applies to all trades practised on construction sites, as long as they are included in the definition of ‘construction work’ according to Norwegian labour law.
Clarification on the definition of temporary agency workers vs. contractors
The government has added a section to the Working Environment Act to clarify the difference between a contractor and a temporary agency worker. This will prevent outsourcing arrangements — which are still allowed — from being confused with temporary employees hired through staffing agencies, which is now only allowed in limited circumstances.
This change could mean that some workers that were previously classified as contractors will now be considered temporary agency employees. The main considerations will be:
- Whether the client/employer manages the work and is responsible for the results
- Whether the main delivery is labour (as opposed to a service)
- Whether the work is closely associated with the client’s business
- Whether the work falls within the employer’s main activity
Of course, distinctions between different types of workers are always somewhat complicated. But these rules align broadly with similar ones set out in legislation like the off-payroll working rules (IR35) in the UK, for example.
What do these changes mean for Norwegian businesses?
Businesses that currently hire temporary workers through staffing agencies in Norway will have to rethink their operations. They’ll need to assess their specific situation to determine whether they can continue to use these agencies or whether they’ll need to expand their permanent workforce instead.
There are other options, though. It’s worth noting that companies will still be able to use agency workers to temporarily replace other employees that are out of action for one reason or another. Contracting and other forms of outsourcing are also still an option — as long as the nature of the work falls within the legal definitions set out in the Norwegian Working Environment Act of 1 April 2023.
Hiring temporary employees through staffing agencies will also still be allowed if there is an agreement with the relevant trade union.
How to compliantly hire in Norway (and everywhere else)
There’s no getting around it: employment law is complex. And if you’re part of an organisation that hires workers in more than one country, keeping up with regulatory changes becomes a full-time job.
If you’re struggling to keep up, teaming up with an expert partner can help you protect your business from costly compliance mistakes.
At CXC, we make it our business to understand exactly what’s going on in the global staffing arena — and how it might affect our clients. We keep a close eye on the swiftly changing local and international legislation around the contingent workforce, and work with a global team of experts in tax, immigration and labour law to keep our clients safe from risk.
Want to find out more about how we could help your business? Get in touch with our team today.