The labour market

The labour market is regulated by provisions of labour law and collective agreements, that cover various aspects of the employment relationship. The law sets out minimum terms and frameworks that serve as a foundation for social partners to advance through collective bargaining.

Legally binding collective agreements

Collective agreements are mandatory and legally binding, requiring both employers and employees to adhere to their terms and conditions. These agreements establish standards for wages, working hours, leave entitlement, and other employment-related provisions, ensuring fairness and equal treatment for employees.

Collective bargaining processes

The associations affiliated with BHM negotiate on behalf of their members to establish collective agreements with the State, municipalities, and sector organizations representing employers in the general labour market.

The public sector

The biggest employer in Iceland is typically the Icelandic government, including its various ministries and public institutions. The government provides a significant number of jobs across different sectors such as healthcare, education, administration, and public services.

Job vacancies within the public sector are published on

Trade union membership

Membership in trade unions is voluntary in Iceland. However, in accordance with the law and to support the crucial role of trade unions in regulating the labour market based on principles of equality and fairness, employees are obligated to pay a union fee or service fee to the trade union that has negotiated collective agreements governing general terms of employment in their respective sectors. The amount of the fee is influenced by various factors and varies among individual member associations of BHM.

In addition to the added value and protection resulting from negotiated terms in collective bargaining, our members have access to a comprehensive range of services. These services include individual support, such as assistance in interpreting employment contracts and ensuring their alignment with collectively agreed terms and labour law.

Moreover, members receive financial assistance during periods of illness and holidays, as well as support for professional development.

More information

For more detailed information, please refer to our member associations.

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Kt. 630387-2569

595 5100
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Friday 9:00 AM to 1:00 PM

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