We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
10 February 2021
Main rules on entry restrictions
Right to perform temporary lay-offs
Right to prohibit outward journeys
Duty of remuneration and support schemes
Basis for termination?
Tax and social security implications
The government has tightened foreign nationals' access to Norway with effect from 29 January 2021. This article discusses the legal impact for affected employers and employees.
The new rules mean that all foreigners who are not covered by one of the exceptions in the temporary law on entry restrictions for foreign nationals out of concern for public health (the temporary act) or the regulations on entry restrictions for foreigners issued pursuant to the temporary act will be denied entry to the country and rejected.
The government will continuously assess whether the infection situation indicates that these austerity measures can be lifted or changed. A new assessment is planned for week 7 (ie, from 15 February 2021 to 21 February 2021).
Foreign nationals can enter Norway only if:
In addition, the Immigration Act's conditions for entry must be met, including requirements for visas.
Many employers may find it tempting to temporarily lay off foreign workers who are now affected by the entry restrictions. However, temporary lay-offs presuppose that the employer has a temporarily reduced need for labour – and that this is based on the company's (not the employee's) conditions. Therefore, the entry restrictions will not provide a basis for temporarily laying off foreign workers.
However, it is conceivable that the entry restrictions could indirectly mean that employers have a basis for being able to temporary lay off employees. This presupposes that a possible loss of foreign labour supply means that the company cannot continue its provision of services to a sufficient degree. In the event of temporary lay-offs, employers must follow the general rules on the selection circle and criteria. Foreign employees who are affected by the entry restrictions will not automatically be covered by a possible lay-off in the company in question.
Employers can in principle make unilateral decisions of significance to the employment relationship within the framework of the right to manage. This means that employers have a right to organise, lead, control and distribute the work in the company.
The extent to which employers can prohibit an employee from leaving the country must be determined through an interpretation, first of the employment contract. Normally, employers' ability to limit employees' right to decide over their free time will be limited. The COVID-19 pandemic and the strict entry restrictions will be relevant factors in interpreting the employment contract.
An employee who deliberately puts themselves in a situation that means that they cannot fulfil the employment contract according to its content will be in breach of the employment contract. This may provide grounds for termination, dismissal or other labour law reactions. The employee will be unentitled to pay or other remuneration.
There are many nuances here. Employers should consider how they can help employees to fulfil employment contracts according to their content. For example, there may be situations in which an employee has no place to live during their non-working period, because they would normally have returned home.
Employees who do not perform work in accordance with an employment contract will in principle be unentitled to pay or other remuneration. This means that foreign workers who choose to leave the country, despite the existing entry restrictions, must bear the risk of a possible loss of pay or other remuneration on departure.
Loss of salary as a result of such trips abroad will give no rights to compensation under public support schemes.
The employer and employee should decide whether it would be appropriate to make use of the affected employee's holiday period during the period in which the entry restriction applies, so that any loss of income does not become unnecessarily large.
The temporary entry restrictions provide no grounds for termination of employees who are prevented from returning to work as a result of the entry restrictions.
For many companies, it may be relevant to allow employees to perform work tasks from their home office abroad, as a result of the entry restrictions. However, this could trigger legal tax and social security effects in the country in which the work is carried out.
Norway has entered into tax agreements with several states which, among other things, aim to prevent double taxation. In principle, an employee will be liable to tax only in the labour state (ie, the country in which the home office is actually located) when they stay there for more than 183 days during a 12-month period. Nonetheless, the tax authorities in the labour state may be entitled to information about the employment relationship, which may, among other things, entail an obligation to file a tax return to the labour state's tax authorities.
Extensive use of home offices in other tax jurisdictions may also have consequences for employers, including with respect to the form of requirements for wage reporting and advance deductions to the labour state. The A-report must in principle also contain information on salaries and other cash benefits for work performed abroad. As a general rule, employers must also calculate their national insurance contribution on these benefits.
In principle, long-term use of a home office abroad can also mean that, from a tax law perspective, a permanent place of business is considered to have been established in the labour state.
Extensive use of home offices can also have social security consequences. An employee who performs work in two or more EU or EEA countries will, as a general rule, be covered by the country of residence's social security legislation if the employee performs a significant part of the work there (25% or more of their total working hours or remuneration). This will imply that social security and employer contributions must be paid to the labour state.
For further information on this topic please contact Ole Kristian Olsby or Nina Elisabeth Thjømøe at Homble Olsby | Littler by telephone (+47 23 89 75 70) or email (email@example.com or firstname.lastname@example.org). The Homble Olsby | Littler website can be accessed at www.homble-olsby.no.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.