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Internal Market: Iceland must change its rules on wages and vacation



The EFTA Surveillance Authority finds that Icelandic rules are in breach of two directives concerning labour law.

Iceland has acknowledged the breaches. Nevertheless, it has not yet brought its national law in line with EEA law. As a consequence, the Authority today issued two reasoned opinions to Iceland.

Firstly, the Authority finds that Iceland infringes the Employer Insolvency Directive by requiring employees to register as job‑seekers, in order to receive the payment of outstanding wage claims.

The Employer Insolvency Directive ensures payment of employees' outstanding claims in the event of employer insolvency, and thus improves employees' rights in this field. The Directive requires EEA States to set up an institution to guarantee the payments. However, it does not allow for EEA States to impose additional limitations on the payment of employees' entitlements, such as provided for by the Icelandic rules.

Secondly, Icelandic rules on working time do not fully ensure the four weeks annual leave provided for by the Working Time Directive. In the event employees fall sick during their scheduled annual leave, Iceland lays down a minimum threshold of days which must pass before employees may demand to have their annual leave prolonged by a corresponding number of days.

A reasoned opinion is the second stage in infringement proceedings. The Authority may bring the matter before the EFTA Court if Iceland fails to take the measures necessary to comply with the reasoned opinions within two months.


For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187

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