Salaried and contract work
There is reason to be vigilant about ensuring that people are paid under the agreements in effect. The trade unions in South Iceland have received many cases concerning alleged breaches of collective bargaining agreements. Most of these cases involving young people concern so-called piecework pay and contract work.
Average wage
The wages for people aged 16-18 are not high. For example, a 17-year-old's monthly salary is estimated to be around 170,000–180,000 krónur, based on the current rates in the agreement between the Federation of Trades and Professions and the Federation of Icelandic Employers. That comes out to just under a thousand krónur per hour for regular work. In certain industries that rely heavily on summer hiring, it is common for teenagers to be offered so-called piece-rate pay.. This is mainly found in retail and tourism, but it is also found in other industries.
So, to be clear, there is no such thing as average pay in the contracts. It is illegal to enter into an agreement that is below the terms of a current collective bargaining agreement, and it does not matter if the employee is willing to do so and work for worse terms. It is simply illegal to enter into such agreements. Wages must be paid in accordance with the applicable collective bargaining agreements; that is, regular work hours must be paid at the regular rate, and overtime must be paid for all work performed outside of those hours. A specific premium must be calculated for shift work, depending on the time of the day the work is performed.
Anyone who is offered a different rate should ask to see the calculation for how this pay rate is determined. It is most common for an employer to calculate the regular and overtime pay rates and find an average figure between them. The unions' experience is that in the vast majority of cases, this is to the employee's disadvantage.
Here is an example of a case that came to the desk of the Service Office of the Trade Unions in South Iceland.
A young girl was hired herself as a sales assistant at a concession stand for minimum wage and then worked the majority of her hours after 6 p.m. and on weekends. It is common for owners to work the first part of the day but hire people to work in the evenings and on weekends. In short, instead of getting overtime pay for the majority of her working hours, she only received 70–75% of what she was supposed to get according to the contract.
Contracts between the parties are not subject to the unilateral interpretation of employers. Even if you're only sixteen or seventeen years old, you are entitled to the respect of not being considered a second-class worker. If you are in doubt about whether you are being paid correctly for your work, there is only one thing to do: contact your union and get it sorted out.
Contractorwork
It is quite common for people to be offered contract work. This is especially true for young people in service jobs. Doormen and cleaning services are mentioned in this context. Now, there is nothing in itself that prohibits people from hiring themselves out as contractors. However, trade unions point out several things that are worth keeping in mind if such an opportunity arises.
The experience of the trade unions is that contract agreements are in most cases very unfavorable to wage earners. There are several reasons:
Although it may look good on paper, such as a higher hourly wage and flexible hours, there's more to the story.. One who hires himself out as a contractor needs to have a salary about 70% higher as the pay stubs indicate. This is to cover all payroll-related payments, such as withholding taxes, union dues, pension contributions, and insurance. These payments are not the employee's choice; they are mandated by law.
A person who works as a contractor generally does not have the same right to sick pay unless they pay for all the insurance themselves. The same applies if they are injured at work. If he also doesn't pay union dues, he is not entitled to any assistance from the unions if he has a dispute with an employer or becomes ill or injured. Additionally, all the administration and hassle for those who want to be on the safe side is added, and one must then ask oneself if they are prepared to factor that work into the contractor's pay.
Generally speaking, from the employee's perspective, the reason for being offered a contract is not that the employer sees a benefit for the employee in it. They are primarily thinking about the company's interests, and so this is one method of lowering labor costs.
The bottom line is that if you are offered a contract for services, you need to review it carefully and thoroughly. A calculation must be provided. You need to familiarize yourself with how the calculation of mandatory fees is handled and ensure that they are paid. Otherwise, there is a great risk that, for example, the tax authorities will take an uncomfortably close interest in you. If history has taught us anything, it's that the taxman will find ways to collect unpaid fees.
Domestic dComplaint about the status of an employee who worked as a contractor at an entertainment venue.
An employee had worked as a bouncer for a year and a half at a nightclub as a contractor. The company seThe company he worked for went bankrupt, and he was owed one and a half months' pay. In addition, he was facing a lawsuit from one of the club's patrons for personal injuries he claimed to have sustained at his hands.
It has been difficult for this employee to collect wages because the trustee refuses to approve his wage claim, as this is considered contract work. To make matters worse, the man's former employer did not have any insurance for his employees or contractors. The union is unable to assist, as no payments have been received from the employee.