Minimum wages for foreign employees within construction sites

The Regulations on general application of wage agreements for construction sites in Norway entered into force for the entire country on 1 January 2007 and stipulate several minimum requirements for employees performing construction work. The Regulations apply to both skilled and unskilled labour as well as foreign employees.

The Act relating to general application of wage agreements provides the legal basis for applying collective wage agreements for persons other than those bound by wage agreements. A collective wage agreement is an agreement between an employee organisation and an employer/employers' organisation regarding wages and working conditions. Contrary to individual employment contracts, collective wage agreements cover several employees jointly. As a point of departure, the parties have no limitations as regards the scope of the contract as long as it does not entail any infringement on mandatory legislation. The collective wage agreements apply for a time period agreed between the parties (normally 1-2 years), and there is a duty to maintain industrial peace during the wage agreement period.

Even though the Norwegian collective wage agreements are binding in principle only for the parties to the agreement and the members of the associated organisations, it is an essential assumption for collective wage agreements that employers do not enter into employment contracts with unorganised employees that are not in agreement with the terms and conditions of the collective wage agreements.

Through the EEA Agreement, Norway is part of the EU's inner market, which entails free movement of workers. To ensure foreign employees do not suffer unreasonable wage and working conditions and at the same time to avoid detrimental competition for businesses with Norwegian employees, the Act relating to general application of wage agreements provides a legal basis that allows the Tariff Board to make decisions as to whether a nationwide collective wage agreement shall apply for all workers in a sector performing work of a nature that is covered by the agreement. The generally applicable collective wage agreements will therefore apply for both skilled and unskilled employees that perform work on behalf of others in Norway, including foreign construction workers serving in the country.

However, this means that the term employee must be delimited in relation to performing work as an independent and self-employed worker. The fact that an individual is registered as self-employed does not in itself entail that he or she is not covered by the term employee. It is the factual and not formal circumstances that will be used as a basis to determine what kind of working relationship has been established. During such an evaluation, it is of particular importance whether

- the person in question is obliged to personally be available to perform work

- the employer assumes the risk for the product of the work

- the employee can use assistants at his/her own expense

- the employer is responsible for premises and equipment

The Regulations relating to expatriates stipulate that the generally applicable wage agreements also shall apply when foreign businesses send employees to Norway.

The most important requirements relating to working conditions in the Regulations on general application of wage agreements for construction sites are as follows:

Wages

Minimum wage per hour:

Skilled workers NOK 132.25 (16.32 euro)
Unskilled workers with no experience in the trade NOK 118 (14.56 euro)
Unskilled workers with at least one year of experience in the trade NOK 123 (15.18 euro)
Employees less than 18 years old NOK 78.50 (9.69 euro)

The Regulations do not apply for apprentices and persons engaged as part of a labour market scheme.

Skilled worker shall be understood to mean employees with a Norwegian publicly approved vocational training certificate or craft certificate. Foreign trade skills can be approved through bilateral agreements or upon application to the education authorities in Norway. Without such approval, the employee shall be considered an unskilled worker.

Compensation for overtime

A supplement shall be paid for work outside regular working hours amounting to 50 % of the hourly rate.

For work outside regular working hours performed between 21:00 hours and 06:00 hours and on Sundays and public holidays, the supplement shall be 100 % of the hourly rate.

Waiver

The Regulations shall not apply if the employee is covered by more favourable wage and working conditions overall under an agreement or under the laws of the nation that otherwise governs the working relationship.

Oslo, 23 April 2007

Håkon Skorstad