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Hiring in Norway
Background checks in Norway
Hire Employees in Norway
Norway language requirements
Corporate presence requirements and payroll setup in Norway
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Employer of record in Norway
Hiring an employee in a foreign country comes with a large administrative burden. Usually, it means setting up a local entity and registering as an employer. Plus, every country has different requirements for things like payroll, taxes, and employment law — which you’ll need to understand before you can start hiring.
In Norway, for example, employers need to abide by the rules set out in the Norwegian Working Environment Act (Arbeidsmiljøloven). They also need to withhold various taxes and social security contributions from their employees’ salaries and remit them to the relevant authorities.
If you want to hire employees in Norway quickly, easily, compliantly, and without worrying about taxes or employment laws, there is another option: use an employer of record (EoR) to hire employees in Norway.
What is an employer of record (EoR)?
An employer of record is a company that takes on HR responsibilities for its clients. If you hire employees through an employer of record, the EoR will become those employees’ official employer from a legal and tax perspective. EoR providers also typically handle HR tasks like payroll, benefits administration, and onboarding, while you retain control of your day-to-day operations.
Using an employer of record in Norway
Working with an employer of record in Norway is a much faster way of hiring Norwegian talent than opening a local entity and handling payroll yourself. When you work with an EoR in Norway, they’ll handle the administrative side of engaging and paying your employees, so you don’t have to. That means all you have to do is focus on finding the right person for the job and growing your business.
Hiring in Norway without an employer of record
Of course, it’s possible to engage employees in Norway without the help of an EoR. However, you’ll need a thorough understanding of the employment laws and tax legislation that will impact your business — or you could find yourself in legal trouble. It’s also a good idea to research the norms and cultural attitudes towards work in Norway, to facilitate smoother relationships with your Norwegian colleagues. In this guide, we’ll take you through everything you need to know to hire employees in Norway.
Hiring in Norway
With its strong economy, reputation for innovation, and educated, English-speaking workforce, Norway is a popular destination for businesses wanting to expand their operations in Europe. Like its Scandinavian neighbors, Norway is also often cited as one of the happiest countries in the world.
However, like all countries, Norway has its own rules and regulations when it comes to employment — and companies hiring in Norway should be aware of them. Read on to discover some of the most important factors you should keep in mind when considering hiring in Norway.
Business registration in Norway
There are various registration requirements for companies that want to hire in Norway. First, all businesses (including foreign businesses operating in Norway) need to register with the Norwegian Register of Business Enterprises. On registration, you’ll be given a Norwegian company registration number, which allows you to pay taxes and social security contributions.
Companies also need to register with the State Register of Employers and Employees before they can hire in Norway. Depending on your situation, you may also have to register for VAT.
Understanding Norwegian labour laws
Norway’s most important piece of employment law is the Norwegian Working Environment Act (Arbeidsmiljøloven). This act sets out the provisions for employee protections and rights that businesses hiring in Norway need to be aware of. For example, it lays out employees’ statutory rights in areas such as working hours, work breaks, parental leave, dismissal, and protection against discrimination.
Collective bargaining agreements in Norway
Around 50% of employees in Norway belong to trade unions, which negotiate collective agreements with employers or employers’ associations. In Norway, these are often called collective pay agreements (although they set standards for more than just pay). Collective pay agreements may provide for terms different from those set out in the Working Environment Act. Employers can’t deviate from collective agreements, even if the deviation would be in favor of the employee.
When an employer is bound to a collective bargaining agreement in Norway, the agreement applies to all of their employees, even if they are not union members. Employees in Norway have the right to join a union of their choice, though they are not obliged to. Employers can’t discriminate against an employee for being a member of a union.
Background checks in Norway
Conducting background checks on potential employees can help employers to verify information given to them by candidates and lead to successful employment relationships. However, it’s important to understand the rules surrounding background checks in Norway to make sure that your operations are compliant.
Required background checks in Norway
Norwegian employers are responsible for ensuring that the people they employ have the right to work in Norway. Foreigners from EU or EEA countries who want to stay in Norway for more than three months need to apply for a registration certificate from a police station or service center for foreign workers. Those coming from outside the EU usually have to obtain a work permit before arriving in Norway.
Other possible background checks in Norway
There are a few different types of background checks that employers in Norway can choose to carry out on potential employees. Specific rules apply to each type of background check in Norway. For example, you may need to conduct the following checks:
Reference and education checks: Standard background checks in Norway usually involve verifying the information the candidate has provided, for example, by contacting their former employers and education providers. Employers should get consent from candidates before carrying out this type of check.
Criminal background checks: Norwegian law classifies a person’s criminal history as sensitive personal data. This means that an employer can only perform a criminal background check in Norway when it is required by the laws governing the profession in question. For some roles, like those involving working with children, a criminal background check is mandatory.
Credit checks: In certain circumstances, employers can perform credit checks as part of their process for employee background checks in Norway. However, this is usually reserved for high-ranking positions that involve responsibility for a company’s finances.
Medical checks: Employers may also conduct medical checks or ask candidates for information about their medical history, as long as it’s relevant to the job in question. For example, an employer would be justified in asking an employee to undergo a medical check for a job that involved a lot of physical labor.
Social media checks: It’s also possible to conduct social media checks on candidates in Norway. However, employers must ensure that they abide by data protection rules. They must also inform the candidate before carrying out this type of background check, for example by mentioning it in the job description.
Limitations on background checks in Norway
Under Norwegian law, employers are prohibited from asking candidates about certain personal circumstances during the recruitment process or from obtaining this information through background checks. For example, employers can’t ask potential employees about:
- Their political opinions
- Their family life
- Their religious beliefs
- Their ethnicity
- Their sexual orientation
- Disabilities
Employers must also ensure that any background checks they perform are compliant with Norway’s data protection legislation. For some types of background checks, employers need to seek consent from the candidate before proceeding.
Hire Employees in Norway
Before you hire employees in Norway, you’ll need to decide on the right engagement structure for your business. Here are the main options you have to choose from:
Employee: An employee is a person with an employment contract who is engaged to perform work for an employer. In Norway, the general rule is that employees should be given a permanent contract, although it is possible to hire for a fixed period of time in certain circumstances.
Independent contractor: Engaging an independent contractor is an attractive alternative to hiring employees in Norway because it typically represents a lower cost to the employer. However, there is a risk that an independent contractor could be deemed an employee if they are not sufficiently independent from the company.
Agency workers: In some circumstances, it is possible to hire temporary workers through a temporary work agency in Norway. However, access to this arrangement is very limited compared to other countries.
The risks of employee misclassification
Independent contractors in Norway are not entitled to the same rights and protections as employees because they are not covered by the Working Environment Act. For this reason, the Norwegian government takes issues of employee misclassification very seriously.
Companies found to have misclassified employees as independent contractors in Norway may have to retroactively pay the employee for any benefits they have missed out on, such as holiday pay, overtime hours, and bonus schemes. They may also be subject to fines and penalties for misclassifying the employee.
Norway language requirements
There are no statutory language requirements in Norway when it comes to employment contracts. That means that it is possible to draft an employment contract in English (or any language) as long as the employee understands its provisions.
Language requirements for Norwegian visas
Applicants for Norwegian visas have to prove they have a sufficient understanding of Norwegian, the main language used in Norway, in order to have their application accepted. Usually, this is proven by passing all four parts of the Norwegian language exam at level A2 or higher on the Common European Framework of Reference for Languages (CEFR). In some circumstances, the local municipality may grant a visa applicant an exemption, which means they don’t have to complete this test. Certain immigration statuses also give applicants the right to 600 hours of Norwegian language training free of charge.
Norway citizenship language requirements
People applying for citizenship in Norway are also subject to language requirements. The standard requirement is CEFR B1 level, which is assessed via an oral test. In some circumstances, immigrants to Norway can be granted citizenship with A1 level Norwegian. People who have been schooled in Norway may not have to prove their level of proficiency in Norwegian.
Corporate presence requirements and payroll setup in Norway
Businesses based outside of Norway can hire local employees without setting up a local entity. However, they must register with the Norwegian Register of Business Enterprises and fulfil certain other administrative requirements. All employers in Norway must also withhold taxes and pay employer social security contributions for their employees.
Setting up employee payroll in Norway
Here are the most important steps you’ll need to follow to set up payroll in Norway:
Register your business with the Norwegian Register of Business Enterprises: All businesses, including foreign businesses operating in Norway, must register with the Norwegian Register of Businesses. You’ll then be given a Norwegian business registration number, which is needed to deduct and pay taxes.
Register for VAT: If your business’s annual turnover is expected to exceed a certain threshold, you’ll also need to register for VAT in order to do business in Norway.
Register with the Tax Administration and Norwegian Labour and Welfare Administration: All employers in Norway have to pay taxes and social security contributions on behalf of their employees. To do this, you’ll need to register with the Norwegian Tax Authority and the Labour and Welfare Administration, which handles social security.
Register employees with the State Register of Employers and Employees: The State Register of Employers and Employers is also known as the Aa register. It lists all employment relationships in Norway, with a few exceptions. Businesses must report their employees and contractors to the register via the Norwegian Tax Administration.
Register for an occupational pension plan and take out occupational insurance: Employers in Norway must take out mandatory workers’ injury insurance via the National Insurance Scheme. They also have to set up an occupational pension scheme for their employees.
Do you need a Norwegian bank account for payroll setup in Norway?
There is no legal obligation to open a Norwegian bank account to pay employees in Norway, as it’s permissible to pay both employees and taxes and charges from a foreign bank account. However, taxes need to be paid in the local currency, which is the Norwegian Krone (NOK).
Easily hire employees in Norway with our EoR solution
Hiring employees in Norway usually means setting up a legal entity, which can be costly and time-consuming. Employers can avoid this hassle by working with an Employer of Record (EoR), like CXC.
Through our EoR solution, you can confidently hire employees in Norway, without worrying about compliance issues. We’ll handle everything from payroll to benefits to employment contracts on your behalf — so all you have to think about is finding the right person for the job.
Compliantly hire workers anywhere with CXC
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
DISCLAIMER: The information contained on this website is provided for general informational purposes only and should not be construed as legal, tax, or other professional advice on any subject matter. While we endeavor to ensure that the content is accurate and up to date, we make no warranties or representations of any kind regarding the completeness, accuracy, reliability, suitability, or availability of the information contained herein. The content on this site is not intended to be a substitute for professional advice. Users should not act or refrain from acting based on any information on this website without seeking the appropriate legal, tax, or other professional advice tailored to their specific circumstances from qualified professionals. We expressly disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this website. Use of the information on this site does not create an attorney-client, tax advisor-client, or any other professional-client relationship between the user and the website or its authors.
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