Norway Faces a Breakthrough in Labor Law. Overtime Changes May Impact Companies and Municipalities

Labor Minister Kjersti Stenseng has called an urgent meeting with employer and employee organizations. The reason is decisions indicating the need for changes regarding the rules for compensation for extra working hours. The government has determined that the current regulations need to be revised. Work on new solutions is already underway.

The government is changing the mandate of the working group analyzing the regulations. It will no longer assess the compliance of current rules with European Economic Area law. Instead, it is to prepare proposals for new regulations. The focus is on compensation for work beyond the agreed part-time hours. According to EU rulings, this compensation should be granted from the very first additional hour.

Previously in Norway, overtime was only counted after exceeding the working hours of a full-time employee. The EU considered this unequal treatment. As a result, two employees in Norway gained the right to wage equalization. The cases concerned people employed part-time, both of whom worked more hours than stipulated in their contracts.

Employer organizations criticize the proposed direction of changes. Spekter points to possible negative effects on the labor market, highlighting the risk of slowing the development of full-time employment. The court cases are expected to be appealed and may reach the Supreme Court.

NHO (the main employers' organization in Norway) and KS (the organization for the municipal sector in Norway) draw attention to the financial consequences. Estimates suggest costs for municipalities could reach 2-3 billion NOK annually. Recommendations have emerged to limit assigning extra hours to part-time employees. Some municipalities have started using new contracts to regulate such situations, aiming to limit the obligation to pay overtime bonuses before exceeding full-time hours.

At the same time, dialogue continues between employees and employers. Trade unions emphasize the importance of equal treatment regarding time off. Employers raise issues of costs and work organization. The working group is to develop concrete proposals for changes. Their adoption could affect employment practices in both the public administration and the private sector.