Employer of Record (EOR) services in Norway offer a strategic advantage in one of the world's most financially progressive nations. With oil and gas contributing significantly to its robust economy, reaching 20%, Norway ranks 9th in the World Bank's Ease of Doing Business Index. Notably, it is the 14th freest economy in 2022, boasting a score of 76.9. Leveraging EOR services in this dynamic economic landscape ensures that businesses can navigate the complexities of Norwegian employment regulations seamlessly. This strategic partnership facilitates compliance, payroll management, and other administrative tasks, allowing companies to focus on thriving in Norway's business-friendly environment.

Leveraging a Norway Employer of Record (EOR) or Professional Employer Organization (PEO) is crucial for streamlined market entry. Norway's financial prowess, ranking 9th in the Ease of Doing Business Index, makes it a lucrative market to do business. 

EOR/PEO services provide a local partner well-versed in Norwegian regulations, facilitating seamless hiring, payroll management, and administrative processes. This strategic alliance allows businesses to establish a presence without the complexities of legal entity setup, making it an essential choice for efficient market entry in Norway's dynamic business environment.

The cost of EOR/PEO services in Norway can vary based on factors such as the number of employees, service scope, and project complexity. Generally, the pricing structure involves a monthly fee per employee or a percentage of their salary. 

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At Gloroots, we offer a fixed pricing. This helps businesses plan their salary budgets when hiring in foreign markets. This is a huge advantage over EORs who take a cut out of the employee’s salary. With the latter businesses face difficulties planning salary budgets as any rise in the employee’s salary will result in paying higher prices for EOR services in Norway.

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Key Metrics For Foreign Employers 

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Norway ranks a stellar 7th in INSEAD’s Global Talent Competitiveness Index, ranking among the top 10 countries for: 1) Population with digital skills (9th) 2) Ease of finding skilled employees (6th) 3) Labor employee co-operation (6th)

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The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Norway.

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Source: The Global Talent Competitiveness Index 2023

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Through the Gloroots’ Recrew platform, you can discover amazing talent in Norway.

The challenge of "Misclassification of Workers" is a significant concern that occurs when employees are incorrectly categorized as independent contractors. To effectively mitigate these risks, engaging a PEO/EOR is essential. Gloroots, as your trusted partner, is dedicated to ensuring strict adherence to labor laws, accurate worker classification, seamless payroll management, and comprehensive employee benefits.

Labor laws in Norway are primarily governed by the "Arbeidsmiljøloven," also known as the Working Environment Act. It covers a wide range of aspects including, but not limited to:

• Hiring processes and employment contracts
• Working hours, including overtime and rest periods
• Leave entitlements, such as annual leave and parental leave
• Health and safety regulations in the workplace
• Employee protection against discrimination and harassment
• Termination of employment, including notice periods and severance pay

Employment contract

In contrast to several European nations like Greece, Norwegian companies must furnish a written contract — a requisite that applies universally regardless of job type. The contract must include:

• Verified identification for both parties
• Job commencement date (with specified durations for temporary positions)
• Workplace description
• Details about holiday pay and entitlements
• Job responsibilities
• Working hours
• Salary particulars
• Probationary period (not exceeding six months), 
• References
• Terms of collective agreements. 
• Notice period

Working time

Full-time employment entails a maximum of a 9-hour workday or 40 hours within a 7-day period.

Overtime

Extra work beyond the usual working hours should be paid as overtime, which is guided by employment contracts or collective agreements. When asking employees to work extra hours or on holidays, there are limits on how many hours are allowed. These limits include 13 hours within a day, 10 hours in a week, 25 hours in four consecutive weeks, and 200 hours in a year. If employees work more than 40 hours a week, the overtime hours are paid at a rate of 140% of their regular pay. Employers should ensure these rules are reflected in employment contracts or agreements with their staff.

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Public Holidays

Norway has 10 public holidays throughout the year (approximately).

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Minimum Wage

Norway doesn't have an official national minimum wage; instead, minimum wage standards are typically determined by collective bargaining agreements within specific sectors and individual employment contracts.

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Annual Leave

In Norway, employees are entitled to a paid annual leave of 21 working days per year, although many collective bargaining agreements and companies provide 25 working days. For employees aged 60 and above, the entitlement increases to 31 days annually. Employees can take three weeks of continuous leave between June 1 and September 30, subject to mutual agreement with the employer. Annual leave is compensated at a minimum rate of 10.20% of the total salary, usually paid in June. 

Some collective bargaining agreements stipulate an increased vacation payment rate of 12.00%, and employees over 60 receive 12.50% of their total salary. 

Paid Sick Leaves

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To qualify for the Social Security benefit, employees must meet specific criteria, including National Insurance Scheme membership, four consecutive weeks of work, and a minimum annual income of 49,929 NOK. 

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Employees need to submit a completed sick leave form within three days of sickness, and if the sick leave extends beyond three days, a doctor's note is required. 

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Maternity leaves

Women employees in Norway are eligible for 59 weeks of maternity leave, during which the national insurance system provides compensation. 

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The national insurance pays mothers 80.00% of their regular income for the entire 59-week maternity leave period. Alternatively, if an employee chooses a shorter leave duration of 49 weeks, they will receive full compensation at 100.00% of their income.

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Paternity leaves

Fathers are entitled to a two-week unpaid paternity leave.

Tax and Social Security contribution:

Employer Payroll Contribution 

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Employee Payroll Contribution 

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Employee Income tax

Termination 

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The termination procedure varies depending on the Employment Agreement or Collective Agreements in effect, contingent on the contract type and the grounds for termination. Unlike at-will employment, an employer in Norway is not obligated to provide a warning before dismissing an employee. Therefore, termination requires a substantial cause, and the employer must substantiate the grounds for dismissal. Strict compliance with the Working Environment Act is mandatory for all employers. Before termination, a consultation with the employee is necessary, as outlined by the Act. This ensures employers are informed about the process and adhere to legal requirements.

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Severance Pay

There is no legal entitlement to severance pay. However, employers frequently provide severance pay as an incentive for employees to accept notice.

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Notice Period

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If an employee initiates the exit process, they are required to provide one month's notice and submit a written resignation. For employer-initiated terminations, the notice period is dependent on the employee's age and seniority, ranging from one to six months. 

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During the probation period, both the employee or the employer can terminate the employment with a 14-day notice period.

Probation period

The probationary period is not mandatory and is typically set at six months.

Expanding your global workforce comes with a host of compliance challenges, from employment laws to data protection and diversity requirements. At Gloroots, we streamline this process with our EOR platform. Our experts handle everything from employment contracts to on-time payments and compliant benefits. This way, you can concentrate on talent acquisition, while we ensure a stress-free global employment experience for both you and your employees. Connect with our experts today to kickstart your global hiring journey.

Notably, Norway's economic prosperity results from its government's commitment to long-term policies emphasizing sustainable development, social welfare, and income equality. Expanding your team in this economically stable country offers access to skilled talent and a conducive business landscape.