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WORKING IN NORWAY

Could a long period of stagnant real wages in Norway be about to end? 

Norway’s unions and employer organisations will soon thrash out terms on this year’s collective bargaining agreements. Many expect workers to see a real wage bump. 

Published: 20 February 2024 13:18 CET
Pictured is a person holding a handful of kroner.
Workers in Norway are likely to secure a real wage increase in 2024. Pictured is a person holding a handful of kroner. Photo by Andrzej Rostek Getty Images

Real wages, which account for how much salaries rise in line with inflation, for many workers in Norway have remained stagnant over the last decade. 

Last year saw real wages in Norway fall, according to The Technical Calculation Committee for Income Settlements (TBU). The government committee calculates price and wage levels and wage growth in various industries in Norway. 

When accounting for inflation, wages fell by 0.2 percent last year, according to the TBU’s figures. A surprisingly weak krone throughout 2023 contributed to the higher than initially forecasted inflation figure of 5.5 percent, while workers on average secured a 5.3 percent wage increase. 

Norway’s national data agency, Statistics Norway (SSB), reported last year that real wage growth in the country slumped to the lowest level seen since the 1980s. It calculated that by the end of 2023, workers in the country would only be marginally better off than they were in 2015. 

Real wage decreases weren’t the reality for everyone last year, and recent figures from Statistics Norway show that several groups saw significant increases. 

READ MORE: Which professions in Norway have seen the largest and smallest pay rises?

Trade union umbrellas have reiterated several times this year that the overall goal for 2024 was an increased real wage increase after several lean years. 

“It is clear that many of our members put their trust in a solid wage settlement. And it will be our task not to disappoint them,” Peggy Hessen Følsvik, leader of The Norwegian Confederation of Trade Unions (LO), told public broadcaster NRK. 

“After years of high inflation and an increasingly tough interest rate level, increased salaries are the most important thing for our members,” she added. 

The TBU estimates that prices will rise by 4.1 percent in 2024, meaning that any wage rises would need to exceed this to meet the unions’ goals. 

Wage negotiations begin on March 15th, and the LO leader has said that it is prepared to take union members out on strike to secure its terms. 

“We are prepared to strike to take what is fair. We must have our share of the cake, and we must have a fair distribution,” Følsvik said. 

READ MORE: Will this year’s wage settlement negotiations lead to strikes in Norway?

LO is expected to set its final salary demand at well over five percent to secure a real wage increase if inflation once again ends up being higher than forecast. 

Negotiations between the state sector and state and municipal employees are expected to be more challenging. Last year, state employees secured an overall wage increase of 6.4 percent on average. 

Norway’s central bank, Norges Bank, has previously forecast wage increases of 5 percent in Norway in 2024. This amounts to a raise of 30,000 kroner for an employee with a salary of 600,000 kroner per year. 

Heading into future years, one key figure could be that wages now make up a much smaller share of companies’ overheads compared to 20 years ago. Wages comprise around 71 percent of a company’s cost compared to 80 percent two decades ago. 

“We have seen a trend over the years now where the wage share has decreased. We cannot continue with that. We have to reverse this development,” Følsvik told Norwegian newswire NTB.

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For members

NORWAY EXPLAINED

What are the rules for taking annual leave in Norway?

If you've just started working in Norway or if you've been employed in the country for a while but need clarification on its annual leave rules, this is what you need to know.

Published: 15 May 2024 12:41 CEST
What are the rules for taking annual leave in Norway?

While annual leave isn’t among the top reasons people usually decide to move to Norway and work there, it is an important component of Norwegian work and social culture.

Compared to some other European countries, Norway has quite a generous annual leave policy, which ensures that workers have enough time to rest and recover from the stress of their jobs.

READ MORE: How to maximise Norway’s public holidays in 2024 – five essential tricks

The basic annual leave quota – and holiday pay

As an employee in Norway, you have both a right and a duty to take your annual holiday, and every employee in the country is entitled to at least 25 working days of annual leave each year.

This quota includes Saturdays as working days, which equates to approximately four weeks and one day of holiday per calendar year (Sundays and public holidays are not counted as working days).

When it comes to holiday pay, workers need to accumulate their holiday pay rights in their first year of employment.

Thus, as the amount of holiday pay you get is a collective monthly percentage of what you have made in the past year, you will not have earned holiday pay if you were not employed the previous year. 

However, you are still entitled to take leave days.

If you want to learn more about how holiday pay works in Norway, check out The Local’s explainer on the issue.

Collective agreements and additional holidays

While the minimum quota of 25 days of holidays is in place, employees can get even more holiday days than this legally required minimum.

Many workers in Norway are entitled to a five-week holiday through a collective agreement or separate agreements with their employer. This extra time off is often accompanied by an increased holiday pay rate.

Furthermore, if you’re nearing retirement, you’re in luck, as all employees aged 60 or over are entitled to an extra week of holidays.

Airport

You should discuss your holiday schedule with your employer well in advance – be sure to do so before booking a vacation outside of Norway. Photo by Hanna Kretsu on Unsplash

How to schedule and take leave in Norway

Per Norwegian laws, employers must ensure all employees take full annual leave.

It’s a good idea to have a chat with your boss about your holiday plans well in advance.

If you can’t agree on dates, your boss gets the final say on when you can take time off.

But don’t worry, in Norway, you’re guaranteed at least three weeks of continuous vacation time between June 1st and September 30th.

If you prefer, the rest of your holiday days can also be lumped together without any breaks.

Note that your boss can ask you to give them a heads-up about your vacation plans at least two months beforehand.

The relevant sections of the Norwegian Holiday Act, available here and here, provide more details on holiday scheduling and duration.

What you need to know about fellesferie 

The term fellesferie is used for the collective vacation period or general staff holiday period that many Norwegian companies stick to, typically occurring in July.

The concept of fellesferie is a tradition – companies aren’t legally obligated to adhere to it – but, in practice, you’ll find that may do. The Local has an entire article on how this tradition started and what makes it special.

How do holidays work if you’re ill – or on parental leave?

Of course, special situations and life events may also occur during or before your holidays.

If you fall ill before or during your leave, you may have a right to a new holiday – or to postpone your holiday.

Should you become sick before your holiday, you can ask your employer to postpone it until later in the holiday year.

You’ll need to get a medical certificate to prove that you’re ill and submit an official request for postponement by no later than the day before the holiday starts.

The right to defer or be granted a new holiday only applies to the statutory holiday period.

As an employee, you have the right, but not an obligation, to take statutory holidays during the period of leave when you receive parental benefit.

If you choose to defer it, the leave will be deferred by a period corresponding to your holiday.

Can I carry leave days forward – or take my leave in advance?

If you reach an agreement with your employer, you can also carry forward up to two weeks of the statutory holiday to the following year.

Similarly, you can also take up to two weeks of your holiday in advance.

However, make sure to check your employment contract (and collective agreement, if you fall under one), as the rules concerning the carrying forward of holiday and advance holiday may be set differently based on these contracts.

READ MORE: What is a Norwegian collective bargaining agreement?

If you have an agreement that allows you to have extra holiday days on top of the statutory holiday quota, you can also agree with your employer that these additional holidays can be carried forward to the following year.

If you’re changing jobs, know that if you do not take your holidays during the current year before your employment ceases and move to a new employer before September 30th of the same year, you will be entitled to take your remaining holiday with your new employer.

For more information on the specifics of the holiday rules in Norway, consult the Norwegian Holiday Act (available in English).

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