Hotels and Restaurants

The employment contract must state whether the employee is recruited for shift work.

The contract must state when the shift begins and when it ends.

Shifts must be planned for 4 weeks at a time and the shift schedule presented with at least one week’s notice before implementation.

Shift plans are to be displayed where employees have easy access to it.

Employees who work shift work earn a total of 12 winter vacation days, based on full-year employment, in exchange for working on major public holidays and other public holidays occurring Monday to Friday.

If the workplace is closed on the days referred to above, or if days off are granted, then the corresponding number of days shall be deducted from the additional leave days, except in the case of employees who are owed accumulated leave related to shift work.

Winter holidays are to be granted during the period from 1 October to 1 May. The recording period for winter leave days shall be based on the period October–October.

Subject to agreement between employer and employee, it shall be permitted to have payment replace the leave days referred to, with 8 hours daytime work rates being paid for each leave day, based on full-time employment. Employees receive payment for earned winter vacation days on termination of employment.

Employees on 8-hour shifts receive two coffee breaks, a total of 35 minutes, that are considered part of the working hours.  Employees on longer shifts shall also have a coffee break equivalent to 5 minutes for each hour, to be used as a single continuous coffee break.

The employer provides employees with meals during working hours, free of charge.

The employer is to pay employees an amount corresponding to 2½ times the start fee of taxis during the part of the day/night when public transport is not available. According to the price list in April 2017, this corresponds to ISK 1,725 at Hreyfill and ISK 1,625 at BSR.

Employers may, however, transport the workers at their own expense if they so wish, provided that rules on the transport arrangements have been established.

During the first two weeks of employment, there is no employment-termination notice.

After two weeks of consecutive employment with the same employer:   12 calendar days
After 3 months of consecutive employment with the same employer: 1 months, starting the 1st of the next month.
After 2 years of consecutive employment with the same employer: 2 months, starting the 1st of the next month.
After 3 years of consecutive employment with the same employer: 3 months, starting the 1st of the next month.

Explanation: If an employee who has worked for the employer for two consecutive years is dismissed, for example on 12 March, he has both the right and the obligation to work for two months from the beginning of March / April. His last working day would therefore be 31 May.

After 10 years’ work for the same employer, the employee is entitled to, at the age of

– 55 – 4 months as of the beginning of the month.
– 60 – 5 months as of the beginning of the month.
– 63 – 6 months as of the beginning of the month.

The employee, however, may resign from work with three months’ notice.

All employment terminations must be in writing.

The employer is under obligation to pay accrued holiday entitlements. Such payments are usually paid at the end of the termination notice period. In addition, the employer is under obligation to pay holiday and December bonuses in accordance with the number of hours worked and the employment proportion during the year.

During the first year of employment with the same employer: two days at replacement pay* for every month of work.

After one year of continuous employment with the same employer: one month at replacement pay.

After two years of employment with the same employer: one month at replacement pay and one month at day-work pay.

After three years of employment with the same employer: one month at replacement pay and two months at day-work pay.

After five years of employment with the same employer: one month at replacement pay, one month at full day-work pay (i.e. regular day-work pay, bonus and shift differentials) and two months at regular day-work pay.

Note: After 5 years of employment at the same company, employees retain part of their sickness rights even if transferring to another company.

The right to sickness leave is based on a twelve-month period. Note: the number of sick days that an employee has used in the past 12 months is deducted from the number of days earned.

Wage concepts:

• Replacement pay – the rate that the worker would have been paid, had he not fallen sick.
• Full day-work pay – i.e. regular day-work pay, bonus and shift differentials but no overtime
• Regular day work pay – the number of hours that would have been paid by daytime work, i.e. not shift differentials and overtime.

Sickness rights due to children

The first 6 months at work: 2 days for each month worked.
After 6 months at work: 12 days at every 12 month period.

Sickness rights due to children is for children under 13 years of age. This also applies to children under the age of 16 who need to be hospitalized for one day or more.

To report sickness:

The employer’s obligation to pay wages in case of sickness due to diseases and accidents is dependent on the employee having reported the sickness in the correct manner as stipulated by law and collective agreements. When an employee is absent due to sickness, it is necessary for the employee to notify the employer as soon as possible. When hiring an employee, it is often stated how they should report sickness. It is normal for them to be reported to the supervisor, foreman or office manager or the person in charge of personnel management.

It is not custom to require sick employees to report sickness to more than one place. The employer must be able to perform a further notification role and an information role within the workplace. An employer should not set such strict rules for reporting sickness that people find it unnecessarily difficult. Fairness must be shown here. For example, a person cannot be deprived of sick leave because he/she was not required to report sickness before noon on the first day of sickness.

It is also ASÍ’s opinion that employers are not permitted to condition the payment of wages in case of sickness absence upon notification of illness to special companies in the field of health protection. Such rules do not go beyond the provisions of collective agreements, which normally prescribe notification to the next superior.

The minimum vacation pay is 10.17% of the employee’s total wage.

As of May 1, 2024, vacation accrual will change as follows (vacation that will be taken in the vacation year starting May 1, 2025).

• An employee who has reached the age of 22 and has worked for 6 months in the same company shall have the right to vacation for 25 days and vacation pay amounting to 10.64%

• An employee who has worked for 5 years in the same company has the right to vacation for 26 working days and vacation pay amounting to 11.11%.

As of May 1, 2025, vacation accrual will change as follows (vacation that will be taken in the vacation year starting May 1, 2026).

• An employee who has worked for 5 years in the same company is entitled to vacation for 28 working days and vacation pay amounting to 12.07%.

Vacation entitlement is calculated from May 1 – April 30 each year. Summer vacation period is from May 2 to September 30. Vacation rights earned due to work in the same company is renewed after three years of work in a new company, provided it has been verified.

Major public holidays

• New Year’s Day
• Good Friday
• Easter Sunday
• Whit Sunday
• 17 June- the national day of Iceland
• Christmas Eve, after 12 noon
• Christmas Day
• New Year’s Eve, after 12 noon

All extra work on major public holidays is paid at an hourly rate which is 1.375% of
monthly pay for day work. Other rules may apply to shift workers.

Other days off

• Maundy Thursday
• Easter Monday
• Ascension Day
• First day of summer
• 1 May
• Whit Monday
• Boxing Day
• First Monday in August

All extra work on other days off is paid with overtime, 80% more than daytime or 1,3085% of the monthly pay for day work. Other rules may apply to shift workers.

22 years and older: 1 year in profession

18 -21 years old: 95% af starting wages at the training time

Full starting wages are based on the employee reaching the age of 18 and acquiring the ability to carry out the relevant work. Training time is a maximum of 300 hours at the same employer or 500 hours in the same profession after reaching the age of 16.

17 years 89% of starting wages

16 years 84% of starting wages

15 years 71% of starting wages

14 years 62% of starting wages

The age level of employees under the age of 18 is based on the year of birth.

Overtime supplement

Overtime is paid at an hourly rate corresponding to 80% surplus on the daytime hourly rate, i.e. 1.0385 of the monthly pay for day work.

Major public holidays

All extra work on major public holidays shall be paid with an hourly pay corresponding to 1.375% of the monthly wages for regular day work.

This shall not apply to shift work for which winter leave entitlement is granted according to special agreements on work on the days indicated.

Working hours shall be arranged in such a way that during each 24-hour period, starting from the beginning of the working day, the employee receives at least 11 hours’ continuous rest. If possible, this daily rest period shall include the period between 23:00–6:00.

Work may not be arranged in such a way that the working period exceeds 13 hours.

If the employee is especially requested to come to work before the 11 hours of rest have been reached, the employee is entitled to additional rest of 1.5 hours for every hour by which his/her rest is reduced.

The employee shall receive at least one weekly day off; the week should begin on Monday.