Hiring in Iceland

With high English proficiency among professionals and strong tech infrastructure, Iceland has grown as a destination for top talent. However, it’s important to understand Iceland’s complex labor laws before hiring there.

Employment relationships in Iceland are governed by national legislation, including the Labour Market Measures Act No. 55/2006, judicial precedents, and both collective and individual contracts. Numerous statutes and regulations established by the Icelandic government work together to protect employee rights and outline employer obligations. 

Additionally, Icelandic law regulates — and in certain cases, sets — specific requirements for the use of temporary or contract workers. Fixed-term contracts must be in writing and are subject to specific conditions, including limitations on duration and renewals. 

Because of the complexity of employment laws in Iceland, compliant employment contracts are an essential business need. With expert guidance, you can employ workers in Iceland with confidence, knowing that every contract meets all legal requirements. We also provide guidance on local cultural norms and hiring best practices, ensuring you stay up to date with evolving employment regulations.

Relying on an employer of record (EOR) in Iceland

An employer of record (EOR) provides an easier way for organizations to hire and pay local talent in Iceland. Because of its in-country presence, the EOR can employ the workers a company needs and lease them to that company, taking care to comply with Iceland’s labor laws. As a result, the organization doesn’t have to establish a legal presence or manage compliance in Iceland.  

The EOR can hire and onboard employees in as little as two weeks and manage ongoing responsibilities such as payroll, benefits, and taxes. A full-service EOR can also manage recruitment. Together, these EOR services significantly reduce the administrative burden for an organization. 

Visit our employer of record services page to learn how we can help you meet your international employment needs in Iceland.