Norwegian ban on hiring from staffing companies

On the 1 April 2023, new and stricter legislation regarding leasing out and hiring temporary staff from staffing enterprises will come into effect. Regular entrepreneurs and service enterprises are not affected by the changes.

For existing contracts entered into before 1 April 2023 the new legislation will apply from 1 July 2023. The new regulations will also include some exemptions for certain groups, such as healthcare workers, specialized/skilled advisors/consultants, and for the agricultural industry.

Limited to hiring from staffing enterprises

The proposed change in legislation is limited to the hiring from staffing enterprises, meaning firms with the purpose of renting out workforce. Other types of contracting, such as temporary hiring permanently employed staff between entrepreneur firms, will still be permitted if the conditions set out in the Norwegian Working Environment Act section 14-13 are met.

1 July 2023 is the due date for existing contracts entered before 1 April 2023 related to specific hire of employees. 1 July 2023 is also the due date for contracts stating that hiring of labour will be a part of the project. So, it will be important to make these contracts before 1 April 2023.

Also read: Norwegian employment contracts – do’s and don’ts

Work of a temporary nature

The legislation prohibits hire of labour where the only reason for hiring is that the work is of a temporary nature.

The government’s reason for introducing this legislation is a rising concern that the Norwegian Working Environment Act opens for a wide-ranging permittance of hiring workforce temporarily. In addition, the regulations are possible to work around given the arbitrary nature of the wording.

As of now, the general rule is that firms are allowed to hire staff from staffing companies temporarily when temporary direct employment is allowed. Temporary employment is allowed under these circumstances:

1. when the work is of a temporary nature
2. For work as substitute of another or others (for example due to maternity leave or long-term sick leave)
3. For trainees
4. For practical work for a participant in labor market initiatives, under the auspices of or in collaboration with the Ministry of Labour and Social Inclusion
5. For athletes, sports coaches, referees, and other leaders in organized sports

The new legislation will remove letter a as an option when it comes to hire employees, meaning that hiring workers for work of a temporary nature will be prohibited.

Also read: Working hours in Norway – calculation based on a fixed average

Contracting industry in the wider “Oslo-area”

It will also be introduced new regulations regarding hiring workforce in the construction industry for a specified geographical area. This will affect the wider “Oslo-area”, which means construction sites in Oslo, Viken and Vestfold. In these areas, it will be prohibited to hire from staffing companies.

Exemptions

• Firms bound by collective agreement with a National Union, i.e., a union with more than 10,000 members, can agree upon exemptions to the new legislation. For this to be applicable, there must be an elected representative representing a majority of the category the hired workforce falls under.

• Exceptions for specific types of work. The following areas will be exempted from the new legislation:
  • Time-limited hiring of health personnel to ensure proper operation of the health and care service
  • Advisors and consultants with special expertise and knowledge
  • The agricultural industry
• The authorities have also said that they will postpone the new rule related to hiring of personnel for cultural events.

How these exemptions will be practiced remains to be seen.

Who are responsible?

It is the company that hires in personnel who is responsible to ensure compliance with the new rules, but we recommend that everyone involved in staffing enterprises familiarize themselves with the new rules and practices them correctly, to avoid surprises later on.

Also read: Working hours in Norway – increased number of inspections

Distinction between hiring staff and use of subcontractors

A new sentence will be entered to the Norwegian Work Environment Act section 14-12, regarding the conditions that are to be weighted when assessing whether a contract agreement includes hiring temporary staff or is considered a contract with an independent contractor or subcontractor.

Independent contracting or a subcontractor is characterized by the fact that the business (client) agrees to buy a result – a finished product or a ready-delivered service from a supplier business (lessor).

When assessing whether an agreement between two companies involves hiring or independent contracting, the most important condition is whether it is the client or the lesser that has management of the work and responsibility for the results. If the client is responsible, it suggests that the agreement is a hiring agreement. If the lessor is responsible, it suggests that the agreement is an independent contracting agreement.

Other important points are if the client is a part of the work process, or if it is the lessor who:

• is responsible for the employees
• decides the number of employees needed
• is responsible for the progress of the work
• is responsible for materials and equipment needed

If the work is to be regarded as individual contracting, the assignment must be clearly defined (in time and/or duties), and the price must be agreed upon in advance. It is also of importance whether the work covers an ongoing need for labor at the client’s business and whether the work takes place within the client’s core- or main activity.

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