Collective agreement signed with considerably increased benefits – Read all about the gains here

The representatives of The Union Alliance, Vilhjálmur Birgisson, chairman of SGS, Sólveig Anna Jónsdóttir, chairman of Efling, and Hilmar Harðarson, chairman of Samiðn, sign the agreements.

Efling has together with Samiðn and Starfsgreinasambandið (SGS) signed a long term collective agreement with the Confederation of Employers (SA). Efling celebrates the signing of the agreement that will involve better wages and rights for Efling members for the next four years. The contract expires at the end of January 2028.

The collective agreement takes effect from February 1st if it is has been approved by members in a general ballot. The voting will be advertised separately shortly here on the website. The signed agreement between Efling and SA can be found in a PDF file below, in Icelandic. The agreement will be translated into English and be published here on the website soon. At the bottom of this article you will also find the signed Stability and welfare collective agreement between The Union Alliance and SA, in Icelandic. Same applies about that agreement, translation is underway.

Wage increases

During the period covered by the collective agreement the wage rates of Efling members will increase about a total of 95 to 107 thousand krónur which equals just under a 24% increase over 4 years. The relative spacing between wage categories and steps due to length of service in the wage tables will stay the same during the contract period.

The wages of those who are above the table will increase in the contract period about 14,5% but never less than 95.000 kr.

The increases will be distributed over the contract period in the following manner:

  • February 2024: Minimum 23.750 kr. or 3,25%
  • January 2025: Minimum 23.750 kr. or 3,50%
  • January 2026: Minimum 23.750 kr. or 3,50%
  • January 2027: Minimum 23.750 kr. eða 3,50%
  • Total: Minimum 95.000 kr. or 14,5%

Efling’s staff is working on a summary that shows changes in Efling’s salary tables and rates over the contract period. Those will be published shortly on the website.

Considerable increases of tax free benefits

In addition to the wage increases the collective agreement involves considerable improvements in benefits from the State and local governments for people with children, tenants and debtors. This is one of the biggest gains of the contract and it was the main goal of The Union Alliance from the beginning of the collective bargaining.

These improvements will come in the form of tax free benefits from public transaction systems, the cancellation of the fee for school lunches and restrictions to fees charged by the state and municipalities.

Efling especially celebrates the success in turning around the decades long decline of public transaction systems, which have long been the lifeline of Icelandic households with children.

Here is an overview of the main items of the contribution from the state and municipalities:

  • School lunches in elementary schools will be free of charge from the beginning of the next school year.
  • Housing benefits to tenants will increase by 25% and in addition there will be a special extra increase for families with 3 or more children. This change will come into effect June 1st 2024. 
  • Child benefits will increase by 6% and reductions will decreased from 5% to 4%
  • Interest rate support in the form of a one time payment will be paid out sometime during 2024. The amount of the interest rate support can be up to 150 thousand krónur for an individual with no children, 200 thousand for a single parent and 250 thousand for married couples. The amount can be used to lower the loan principal or the monthly payments over a certain period, depending on what people choose.
  • Fees charged by municipalities and the state will, with certain exceptions, decrease in the cases where they increased more than 3,5% at the beginning of this year, and the state and municipalities will keep all increases of fees within 2,5% during 2025.

Efling’s staff is working on examples of the gains from these improvements in compensation which will be published shortly.

Sólveig Anna, chairman, Ragnar Ólafsson, Efling’s expert in collective bargaining, and Barbara Maria Sawka, secretary of the board of Efling, sign the collective agreement on behalf of the union.

Premisses about price levels and economic developments

The collective agreement is based on the premise that inflation and thus interest rates will decrease sharply. This is one of the most important gains of the collective agreement in addition to the wage increases and the improvements of the tax free benefits of the state and municipalities.

If inflation has not decreased below a certain point on previously agreed upon dates, and an agreement has not been reached with SA on how to compensate for that, it will be possible to terminate the contract on two separate points in time during the contract period. It will also be possible to terminate the contract if the state and local governments have not fulfilled their part regarding the restoration of benefits systems and other things.

There is also a prerequisite clause which guarantees that salaries based on the wage tables will never get dragged behind the general wage index due to salary hikes of groups with higher wages. In addition there are prerequisite clauses that guarantee the share of wage earners in the increased productivity of the economy should it rise above a certain point.

The timeline of the conditional clauses is as follow:

2025: Wage rates shall increase automatically on April 1 in accordance with the general wage index, if it has risen above the wage rates of Efling.

If the 12 months inflation in August has not lowered below 4,95% or if the state has not fulfilled its part according to their statements, it will be possible to terminate the contract so that it ends on October 31.

2026: The same conditions regarding wage rates as in 2025.

Wages increase by a certain percentage on April 1 if the productivity of the    economy has risen above 2% and there has not been an economic recession in the previous year.

If the 12 months inflation in August has not lowered below 4,7% it will be possible to terminate the contract so that it ends on October 31.

2027: The same conditions regarding wage rates and productivity as in 2026.

Read the details about the conditional clauses in the Stability and welfare collective agreement between The Union Alliance and SA, in Icelandic. 

Rights at work

Efling also celebrates success in improving important rights issues of members in the workplace, which have been added in new and improved clauses of the collective agreement.

One of them is the new subchapter 7.6 which strengthens the rights of employees who put forth comments regarding the facilities or security in the workplace. According to this new subchapter the employer is prohibited from letting the employee suffer any consequences because of such comments. Additionally the employer is obligated to respond and inform the employee of the progress of the issue.

Provisions regarding the duties and rights of confidants are also significantly strengthened. Workplaces with more than 120 members will be allowed to elect three confidants, but since the beginning of legislation on confidants, it has only been possible to elect two confidants at maximum per workplace, regardless of size. A new provision also stipulates that the confidant and the employer must make an agreement on the time the confidant has to carry out his duties. In addition, the confidants course attendance right is increased from 5 days to 10 in the second year of the appointment period, and confidants who work shifts will be insured against loss of wages due to course attendance.

Improved vacation rights

In the contract the vacation rights of members are improved. All Efling members who have worked for 6 months or longer in the same profession and are older than 22 years old will now get a minimum of 25 vacation days, but previously it was 24 days.

The vacation right of those who have worked for 5 years at a company will also be increased. It was 25 days but it will increase in two stages to 28 days.

Efling celebrates this important improvement of employment terms for workers who can now enjoy more vacation time.

Efling’s negotiation committee and staff celebrating the milestone.

Landmark correction of the employment terms of cleaning workers

In the contract great improvements have been made to the employment terms of cleaning workers. This was a joint goal of all the unions in The Unioan Alliance.

In addition to other negotiated increases of the contract, cleaning workers who work under chapter 22 of the main collective agreement will rise from wage category 6 to category 8. This means that at the end of the contract period the baseline salary of cleaning workers will have increased up to 6 thousand krónur more than other wage increases, and this additional increase also applies to shift- and overtime bonuses.

Furthermore, a special cleaning-bonus which amounts to 19.500 kr. per month for full time work. The cleaning-bonus will be added to salaries starting with the August salaries 2024, and there will be a separate line in the payslip that does not increase the shift- or overtime bonuses. This is a similar implementation as in the wage correction for historically underrated womens jobs that Efling negotiated with Reykjavík City in 2020.

The wages of a full time cleaning worker will in September of 2024 have increased by a minimum of 49.866 krónur.

Additionally, a new clause will be added that clarifies the contract definition of time measured work. Previously workers who do this kind of work have often not been getting the 20% bonus that they are supposed to get. The new clause strengthens their position to get this bonus from their employer.

The permits for workplace inspection have also been widened to include cleaning companies.

 Immediate rate increase2 salary class from 1. FebruaryCleaning bonus from 1. AugustTotal
Starting salary24.027 kr.5.013 kr.19.500 kr.48.540 kr.
After one year of work24.266 kr.5.064 kr.19.500 kr.48.830 kr.
After three years of work24.631 kr.5.140 kr.19.500 kr.49.271 kr.
After five years of work25.124 kr.49.866 kr.

Changes to the hotel and restaurant contract

Changes have been made to the collective agreement between Efling and SA regarding work in hotels and restaurants which will in whole be beneficial.

All members who work in hotels or restaurants will rise up at least 1 wage category. The definition of a specially trained employee has been widened so that a worker who was previously in wage category 5 can go up to category 7.

Wage category 4 will be canceled so that everybody who was in that category will go at least up to category 6.

Shift-bonuses for work in nightclubs from midnight to 5am in the morning on Saturday and Sunday will increase from 45% to 55%.

On the other hand the changes to the chapter include that overtime will not be paid until after an employee has worked more than 173,33 hours a month, but the great majority of workers working under this chapter works on shifts and will therefore not be affected much by this change.

In addition the permits have been increased to make workplace agreements about the implementation of “jafnaðarálag” subject to the consent of the union and employees in a vote based on section 5 of the collective agreement. 

December and holiday bonuses

Holiday and December bonuses will be updated and as follows:

Holyday bonusDecember bonus

In the coming days, the union will publish further material about the new collective bargaining agreement and announce a vote on the contract among members.