Norway PEO Employment Services by Velocity Global

Norway PEO Employment Services

Velocity Global’s International PEO (Professional Employer Organization) service helps your company expand into Norway with speed and ease. Bypassing the costly and lengthy entity establishment process, International PEO is the most agile, cost-effective, and efficient global expansion solution available.

When your company chooses Velocity Global’s Norway PEO service, we act as your Employer of Record. As a result, we hire and onboard all your Norwegian supported employees. We also handle all ongoing international employment needs, from managing taxes, benefits, and payroll, to mitigating risk and ensuring compliance. By taking care of the small details, we allow you to fully focus on the big picture of overseeing your employees–and your business.

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Norway Fast Facts

Currency: Norwegian Krone (NOK)

Population: 5.4 million

Economy: $403.3 billion

Top Sectors: Oil and gas, hydroelectric power, forestry, fishing, mineral extraction

National Holidays: Norway observes the following national holidays and public sector holidays:

  • New Year’s Day
  • Maundy Thursday
  • Good Friday
  • Easter Monday
  • Labour Day
  • Ascension Day
  • Whit Monday
  • Christmas Eve
  • Christmas Day
  • Second Day of Christmas

Hiring Considerations in Norway

Benefits of hiring in Norway:

  • Norway is one of the world’s wealthiest economies. It boasts the world’s fifth-highest GDP per capita and a low inflation rate (2.8%), along with vast reserves of natural resources (from oil and gas to forests and minerals) that power its economy.
  • Norway is the world’s ninth-easiest country to do business in, according to the World Bank. The country’s government excels in enforcing contracts and resolving insolvency, giving companies confidence their business agreements will be upheld.
  • Norway’s populace is highly educated. Norway spends proportionately more of its GDP on education than any other country in the world. As a result, its workforce ranks as the 6th-most skilled in the world. Similarly, Norway ranks fourth worldwide in ease of finding skilled employees.

Challenges when expanding into Norway:

  • Despite its strong economy, Norway’s GDP growth has grown at a low rate of 1.4% over the last five years. This minimal growth is due in part to substantial government spending. As a highly socialized state, Norway’s government imposes relatively high taxes. On a scale of 0-100, with 100 representing the world’s least-taxed countries, the 2020 Index of Economic Freedom rates Norway at 57.7–considerably below the world average of 77.3.
  • Because Norway is not an EU member, companies encounter additional customs and border challenges when doing business across the continent.
  • Obtaining credit in Norway is challenging. The World Bank ranks Norway as 94th worldwide in terms of ease of getting credit.

Cultural nuances and must-knows for doing business in Norway:

  • Greet your business colleagues with a short but firm handshake. Maintain eye contact when speaking to your peers.
  • Avoid pleasantries and small talk, as Norwegians value direct and transparent communication. Do not feel the need to fill voids in conversation. Norwegians are comfortable with periods of silence.
  • Arrive on time for meetings. Norwegians emphasize punctuality, so communicate any delays or schedule changes as quickly as possible.
  • Dress in a business-casual style. Norwegian work culture is largely informal, though people in the capital of Oslo tend to dress more conservatively.
  • Act with modesty and respect. The Scandinavian culture emphasizes the good of the whole over the individual, and Norway’s business world is no exception. Companies tend to adopt a flat organizational structure rather than a strictly hierarchical order. Understand that Norwegians value fitting in and being part of a team rather than standing out or acting in an ego-driven manner.
  • Respect the personal space of your Norwegian colleagues. Norwegians reserve physical contact for close friends and family.
  • Expect Norwegians to be less available for business around Christmas, Easter, and during July and August, as they commonly take vacation during these times.

Employment Contracts in Norway

Minimum wages and salaries: 

  • Norway has no uniform minimum wage. Instead, the country’s unions create collective agreements that apply to their industry. These agreements set minimum wages, which vary depending on whether an employee is skilled or unskilled, the employee’s age, and how long the employee has spent working for the employer.

Probation periods: 

  • Norway’s WEA (Working Environment Act) mandates that all employers enter into a written contract with any employee. Initial probationary periods must not exceed six months. If an employee is absent from work during a probationary period, the employer and employee can extend the probationary period for a length of time equal to the absence.
  • Employers must give employees 14 days’ notice before termination during a probationary period unless another length of time is specified in a contract or industry bargaining agreement.  

Bonuses:

  • Bonuses in Norway are commonly awarded based on individual achievement, team achievement, or company achievement.
  • Employers have full power to change the bonus system at their discretion.
  • Bonuses are taxed and subject to employer insurance contribution rules. Employers must also factor in bonuses to the amounts they owe employees for holiday pay or pensionable income.

Termination and Severance Considerations:

  • Norway requires that all employers have cause to terminate an employee. Cause is determined individually, as there are no explicit standards that qualify employee behavior as worthy or unworthy of dismissal. However, employers generally must prove that an employee’s work was below company standards or that an employee was negligent of his or her responsibilities.
  • Employers must consult the employee about his or her performance issues before dismissing that employee. The employer must also communicate the possibility that the employee may be dismissed if performance does not improve.
  • Employers must give employees notice before dismissing the employee. Notice periods are as follows:
    • 14 days for any employee in a probationary period.
    • One month for employees who have worked less than five consecutive years for their current employer.
    • Two months for employees who have worked between five and ten consecutive years for their current employer.
    • Four months for employees who have worked at least 10 consecutive years for their current employer, if the employee is between the ages of 50 and 55.
    • Five months for employees who have worked at least 10 consecutive years for their current employer, if the employee is between 55 and 60.
    • Six months for employees who have worked at least 10 consecutive years for their current employer, if the employee is over 60.
  • Employers have the right to dismiss employees without notice if they commit a gross breach of duty or a serious breach of contract.
  • Employers must submit termination notices in writing and present an option for the employee to contest the termination.
  • Employers cannot dismiss an employee because the employee is pregnant. Nor can they dismiss an employee on maternity or paternity leave due to their absence from work.

Paid Time Off & Benefits

Maternity leave:

  • Employers must grant female employees up to a year of paid leave during pregnancy. Female employees are guaranteed up to 12 weeks of leave before childbirth and at least six weeks of leave following delivery.

Parental leave:

  • Each parent is entitled to a year of unpaid parental leave following the birth of their child. Parents taking care of a child alone are entitled to two years of unpaid leave.
  • Employees must apply for leave at least three months before the leave will begin.
  • Employees are entitled to 100% of their salaries when taking parental leave for 49 weeks and 80% of their salaries when taking leave for 59 weeks.

Vacation leave:

  • Employees in Norway are entitled to a minimum of 21 days of vacation per year. However, many collective agreements mandate that employees receive a minimum of five weeks of vacation annually.
  • Employees above the age of sixty years are guaranteed one additional holiday week.
  • Employers must pay employees on vacation at a rate of 10.2% of their salary for the first 12 weeks of the year.

Sick leave:

  • Employees can take three consecutive days off work without presenting a medical certificate. After that time, employees must present a certificate for their absence.
  • Employees are entitled to 100% of their pensionable salary while on sick leave for up to 52 weeks. Employers must pay employee salaries for the first 16 calendar days. The National Insurance Scheme is responsible for paying employees afterward.

Payroll

Average workweek hours:

  • Norway’s WEA stipulates the normal working week is 40 hours, and the normal working day should not exceed nine hours. Many collective agreements, however, mandate that employees work no longer than 37.5 hours per week.

Overtime considerations:

  • Employers have the right to mandate an employee works overtime up to:
    • 10 hours per seven days
    • 25 hours per four consecutive weeks
    • 200 hours per 52 weeks
  • Employers and employees can agree that the employee will work up to:
    • 16 hours per day (24 hours)
    • 20 hours per seven days
    • 50 hours per four consecutive weeks
    • 300 hours per 52 weeks
  • If employers submit a request, the Labour Inspection Authority may grant an extended overtime work period not to exceed:
    • 25 hours over seven days
    • 200 hours over 26 weeks
    • Employees who work overtime are entitled to at least 40% of their hourly pay. Employers must pay this 40% supplement even if the employee accepts time off equivalent to the overtime hours worked.
    • Collective agreements commonly require that employers provide overtime benefits that are more favorable to the employee.

Employer Contributions

Employer Contribution Burden
Social Security 14.1%
Pension 2%
Total 16.1%

Choose Velocity Global

Expanding into Norway enables your company to find new clients, earn additional revenue, and grow your global brand. But maintaining compliance with Norwegian regulations demands time and attention. We have the expertise to help.

Velocity Global’s Norway PEO solution covers every small detail of your Norwegian expansion. From onboarding to risk mitigation, we ensure your business adheres to every applicable Norwegian regulation. By handling the nuances of overseas employment compliance, we give you the ability to focus on growing your business in Norway.

International PEO is up to 60% less expensive and 90% faster than entity establishment, freeing up time and money to invest in other areas of your business. Whether you’re looking to hire one employee or an entire Norwegian team, we have the expertise, knowledge, and experience to help you accomplish every expansion goal.

Want to see how our services can meet your unique needs in Norway? Contact Velocity Global today.

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