End Wage Theft

The impunity enjoyed by employers implicated in wage theft is a stain on the Icelandic labor market. Thousands of workers in Iceland are deprived of their wages every year. These workers either never see their wages returned or require the help of the Icelandic trade unions to collect their own earned wages. In the past five years, Efling has made claims on behalf of its members against employers for wage theft in excess of 1 billion kronur.  The average amount of wage claims sent by Efling to employers in the year 2019 was around 500.000kr. Hundreds of these claims are received every year.

The government finally took action to clean this tarnish from the Iclendic labor market with the finalization of the Quality of Life Agreement. This agreement included a promise to allow fines for violations to the minimum wage for workers.

Ásmundur Einar Daðason, Minister of Social and Childrens‘ Affairs, began work where representitives from both the Icelandic Confederation of Icelandic Employers (SA) and the Icelandic Confederation of Labor (ASÍ) made proposals for changes to the law. The Icelandic Confederation of Labor (ASÍ) presented well developed and fair solutions. The Confederation of Icelandic Employers (SA), however, has so far opposed all proposals and halted progress on this work. This is an attact on one of the most important components of the current wage agreement.

Did you know that:

  • Icelandic law does not give any legal power to give fines or penalties for violations to the minimum wage for employees, nor for unpaid wages or other violations of worker‘s rights.
  • When a member of Efling is a victim of wage theft, they recieve assistance from Efling‘s Wage Agreement Division in making a claim for the wages they are owed. These wages are collected in some cases, however no fine or amount of compensation is added to the stolen wages, except a possible penalty interest which is very low and governed by Icelandic laws on interest and indexation.
  • In many cases, it can take months and even years to collect a claim for stolen wages. During this time, the employee bears the costs, other damages and inconvenience of the wage theft.
  • The employer may not adjust the wages of other employees in the same position even if the employer agrees to a claim by Efling on behalf of another employee within the same company..
  • There are many cases where employers benefit from large groups of employees in regards to payments, for example the December and Holiday Bonuses. These employers seem to assume unpunished wage theft in both their business plans and business ethics.
  • The total amount of stolen wages in addition to the number of individual wage claims is increasing every year. The total amount is over 1 billion ISK during the last five years. During the same time period, the number of claims have been in the range of 200-700 per year, however in 2019 there was a record year with over 700 claims and a total of 345 million ISK. The average amount of a wage claim is between 380 and 490 thousand ISK, roughly equivilent to the average monthly salary of an Efling member.
  • Efling‘s figures are only the tip of the iceberg. Elfing‘s data only represents the wage theft of members who report their stolen wages to the union, it does not represent unreported wage theft. Many members do not report wage theft for fear of consequences, and there are strong indications that employers violate wage agreements at a much higher rate than what is reported.
  • Young people and people of foreign origin are in a more vunerable position in the labor market than people who are older and Icelandic. Young people and people of foreign origin may have limited experience, a language barrier, short stays at workplaces, are unaware of their rights and may not even know it is possible to seek help from their union. This group is hit hardest by wage theft, although it is sadly common in all sectors and among a diverse group of workers.

Common Violations to the Wage Agreement:

  • Not receiving an agreed upon break (coffee break, meal break)
  • Not recieving sick pay
  • Not recieving Holiday or December Bonuses
  • Unpaid „trial shifts“
  • Not recieving summer vacation
  • Fá ekki lögbundinn vikulegan frídag
  • Receiving an balance pay scheme that does not pay differentials and is lower than the rate in the collective agreement

Important Information:

  • If you do not have an employment contract for shift work and you have not agreed to shift work then you should be paid overtime, not differentials, outside of daytime working hours.
  • You have the right to work your entirer shift, if you are told to go home early then you should still be paid for your entire shift.
  • Your employment rate should be a number not a range, for example 80-100%.
  • You are entitled to coffee and food breaks. If you do not receive your break, then you are entitled to recieve payment. There must be 11 hours between shifts. If you do not recieve this rest period then it should be compensated with paid leave. At least 10,17% should be paid on top of your salary as vacation.
  • You should receive a Holiday Bonus in June and a December bonus in December if you are working at that time and have worked some part of the year.
  • All employees are entitled to paid sick days. It is the supervisor‘s responsibility to find a replacement for a sick employee.
  • Termination must be in writing. If the employer wants you to resign immediately, you are entitled to be paid your notice period.

Efling demands the Icelandic government combat crime inflicted on workers by holding employers that are perpatrators of this crime accountable and living up to their promises.

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