The use of independent contractors – as well as subcontracting companies – is increasing in Norway. The reasons for this may be numerous, but we believe an important reason is the Norwegian employers’ belief that the protection against dismissals in Norway is especially high (if an Employer actually follows the law, however, it is not especially difficult to terminate an employment relationship in Norway).
The distinction between an employee and an independent contractor in Norway is defined by mandatory law interpreted by the courts, both regarding employment protection, holiday pay, tax, pension and social benefits. These definitions are very similar, but the cases related to tax law indicates a somewhat different evaluation as the topic is not protection of individuals, but the question of tax liability for companies and individuals.
When having to distinguish between an employee and an independent contractor, the content of the contract is very important. The most important factor is, however, the question of how the parties conduct themselves during the day-to-day management.
The main indicator when deciding whether or not a contractual relationship is considered as employment or not, is the question of whether or not the contractor is responsible for the results of his work or only for using his expertise and doing his best for a period of hours or days.