Persons who work or are residents in Norway are, as a rule, obliged to be members of and to pay contributions to the Social Security Scheme. Employers have to pay social security contributions on wages and other remuneration that the employers have to report. The obligation to pay employer’s social security contributions does not follow the membership of the employee and can apply even if the employer is not engaged in activity in Norway and even if the employee is not liable to pay taxes in Norway. The employer’s social security contributions are stipulated as a percentage of the reported amount. The contributions are differentiated, with rates that vary between different geographical zones. Employees’ social security contributions are stipulated as a percentage of personal income.
Healthcare and Insurances
The National Insurance Scheme covers a range of benefits including sick pay, work assessment allowance, disability pension, unemployment benefits, retirement pensions, survivor’s pension, occupational injury benefits, healthcare allowance, benefits to single parents and benefits during pregnancy, birth, adoption and parental leave.
Holidays and Annual Leave
Minimum holiday rights for employees are outlined in the Holiday Act, which grants an employee a minimum right of 25 working days of holiday leave per year. The term “working days” includes Saturdays. Employees over 60 years of age are entitled to an additional 6 working days of holiday leave. The holiday year runs from 1 January to 31 December. Many collective agreements grant extended holiday rights. Five weeks of holiday is now quite common in Norway. As a general rule, an employee is entitled to 18 consecutive working days of holiday leave during the period 1 June and 30 September. An employee is also entitled to take the remaining seven working days of holiday leave together.
Holiday pay is earned the year before it is paid (the holiday year). Holiday pay is 10,2 percent of the wages paid during the earning year. The amount is normally 12 percent if an employee is entitled to five weeks’ holiday under an individual or collective agreement. For employees over 60 years of age who are entitled to an additional week, the holiday pay is either 12,5 or 14,3 percent, depending on whether the employee is entitled to five or six weeks of holiday. There are 10 (ten) public non-working days per year in Norway.
Maternity and Paternity Leave
Maternity leave, including compensation, lasts for a maximum of 59 weeks. 3 weeks before the birth and the first 6 weeks after birth are reserved for the mother, and are compulsory. 15 weeks are reserved for the father. The employees have the right to compensation during maternity and paternity leave. The compensation is either 80 percent of the salary for 59 weeks or 100 percent for 49 weeks. In addition, parents have the right to take a leave of absence for an additional year without compensation.
Sickness and Disability Leave
When an employee has a right to leave due to sickness, he also has a right to sick pay (the salary is fully compensated), which is customarily split between the employer and the National Insurance Scheme. The employee is protected against dismissal on the grounds of sickness leave, during the first 12 months after the beginning of the period of absence due to such reasons.
In principle, disability leave is not a concept recognised under the laws of Norway.
Pensions: Mandatory and Typically Provided
Retirement pensions are divided into three levels:
Level 1: retirement pensions from the National Insurance Scheme ensure an income in old age. Drawing from a retirement pension can begin the month after a person turns 62, as long as sufficient pension rights have been accumulated. A person who is retired can work as much as he or she wants without their pension being reduced. They accumulate rights to a retirement pension when they work or otherwise have a pensionable income before turning 75. The pension rights are adjusted in accordance with the general life expectancy of the population.
Level 2: employers must provide mandatory occupational pensions in addition to retirement pensions.; at least 2 percent of an employee’s gross income is paid into pension funds.
Level 3: private savings, irrespective of employment and the Norwegian pension scheme.