An employee is someone who performs work for, and is subordinate to, someone else. This definition is important, because being classified as an employee is the “ticket” to rights under the Working Environment Act. The definition also helps make it easier to distinguish between employees and independent contractors.
Who is considered an employee?
Employee in Norwegian: “arbeidstaker” and “ansatt”
In Norwegian, there are two words for ‘employee’: “ansatt” and “arbeidstaker”. In everyday speech, people often use the term “ansatt” to refer to an employee. This means the person is employed by an undertaking. The Working Environment Act and related regulations, however, use the broader term “arbeidstaker”.
Every person who is classified as an employee has many rights in working life. For example, all employees are covered by the protections established by the Working Environment Act and Working Environment Regulations.
The law defines the term employee
The Working Environment Act defines an employee as “anyone who performs work for and is subordinate to another”.
This definition is intended to make it easier to distinguish between employees and independent contractors. This distinction is important in order to determine who is protected under the rights afforded to employees by the Working Environment Act.
In determining whether a person is an employee or an independent contractor, one must take into consideration whether the person
- makes their personal labour available on an ongoing basis
- is subordinate through management, leadership, and control (the power balance within the employment relationship is important in this context)
If the true nature of the contractual relationship has these two characteristics, it would suggest that the person should be classified as an employee.
Overall assessment of the specific circumstances
There are other factors as well, beyond those provided in the Act, and these should also be taken into consideration when determining whether a person is an employee or an independent contractor. All factors should be included in an overall assessment of the true nature of the relationship.
- Does the person work primarily for one employer or client?
- Is their affiliation relatively stable?
- Can the affiliation be terminated with a given notice period?
- Is the undertaking (employer) liable for the work performance?
- Does the undertaking (employer) provide the tools, equipment or aids necessary to perform the work?
If you can answer all of these questions with ‘yes’, it is indication that the person is an employee.
Which of these factors are given the most weight and significance may vary from case to case. As no two cases are the same, an individual and specific assessment must be made of the person’s affiliation in each case.
The list above is not exhaustive, and also other factors may be taken into consideration, such as whether the work is associated with health and safety risks that necessitates protection as an employee.
In addition, while the assessment may be accurate today, it may not necessarily be accurate after some time. Changes in affiliation may affect the assessment.
The Working Environment Act distinguishes between employees and independent contractors. These categories are mutually exclusive. This means one person cannot simultaneously be both an employee and an independent contractor in a single affiliation.
In summary, the difference between an employee and an independent contractor is as follows:
- An employee performs work for, and is subordinate to, someone else.
- An independent contractor performs work for him/herself and is clearly independent.
The Working Environment Act consistently uses the term independent contractor (“selvstendig oppdragstaker”) about persons who perform independent contract work. This term includes any person who (without having employees of their own) perform work by taking on assignments from an undertaking without being an employee.
It is unfavourable for both parties when it is unclear whether a person should be considered an employee or an independent contractor. The Working Environment Act therefore includes a requirement that clients must be able to prove that the independent contractor is, in fact, an independent contractor.
The person shall be considered to be an employee unless the client shows it to be “highly probable” that an independent contractual relationship exists.
This standard was implemented on 01 January 2024, and the motivation behind the amendment is to reduce grey areas for workers in terms of their affiliation. A correct classification is significant for the person’s rights under the law, see below.
The amendment implemented on 01 January 2024 did not change the right of undertakings to use independent contractors, and it also did not change the definition of who is considered an employee and who is considered an independent contractor.
The contract regulating the affiliation plays an important role as evidence in a determination of whether a person is an employee or an independent contractor.
Nevertheless, if the contract does not accurately reflect the true nature of the contractual relationship, it will not have much relevance as evidence. The actual circumstances are the determining factor. The contract may be titled “Contract for independent contractors”, but this is not a determining factor in whether or not the person is considered to be an employee or an independent contractor.
Employment contract requirements
Employees who are in a contractual relationship as an employee, must be provided with a written employment contract. The Working Environment Act includes requirements for the contents of an employment contract.
Employee or independent contractor?
Taking on new workers? Not sure how the person(s) who will be performing the work will be classified?
We recommend that you consider the factors described above.
Why is it important that employees are classified correctly?
When you are classified as an employee, it means you have been employed by an employer. This means you have many rights under the Working Environment Act and the Holiday Act, including:
- a safe working environment
- a written employment contract that regulates your employment relationship
- receiving salary and a pay slip
- minimum pay (in some industries)
- protection from unfair dismissal
- holiday leave and holiday pay
- regular working hours and overtime pay for overtime work
- daily and weekly off-duty time
- restrictions on night work and work on Sundays
- rights to leave of absence
Other laws
Other laws also include rules on the classification of employees. The National Insurance Act, for example, includes a definition for the term employee, which differs slightly from the definition provided in the Working Environment Act. If you have questions about your rights under the National Insurance Act, please contact Nav (nav.no)
When you are classified as an independent contractor, it means you are not employed by an employer. There are many rights under the Working Environment Act and Holiday Act that do not apply to you.
Other laws
Other laws also include provisions on the classification of independent contractors. The National Insurance Act, for example, has its own definitions and distinguishes between the terms ‘freelancer’ (frilanser) and ‘self-employed persons’ (selvstendig næringsdrivende). If you have questions about your rights under the National Insurance Act, please contact Nav (nav.no).
If you are an independent contractor, you should read up on your duties and rights in accordance with other Acts. Read more about this at Altinn, under “Start and run a business”:
If a client has incorrectly classified a person as an independent contractor, this could have serious legal and financial consequences.
In Norway, it is up to the courts to decide if a person has been incorrectly classified. They can decide that a person in an independent contractual relationship should have been classified as an employee in an employment relationship. In these cases, the client will be classified as the person’s employer.
The courts have held these employers liable for back payment of salary, overtime pay, pensions and holiday pay. The employer may also be held liable for violating the Working Environment Act if a person is incorrectly classified.
It is therefore important to make a careful assessment of the true nature of the contractual relationship in order to determine whether a person is correctly classified.
It is important to note that, when determining the correct classification, most emphasis must be placed on the actual, specific circumstances and the true nature of the relationship - rather than what is stated in the agreement between the parties, such as an independent contract.
The provisions of the Working Environment Act apply to undertakings who engage employees. These undertakings have a duty of responsibility as employers under the Act and a number of duties vis-à-vis the employees.
An employer is anyone who has engaged an employee (as defined by the Working Environment Act). This means that you have a duty of responsibility as an employer under the Working Environment Act if the person performing work for the undertaking is classified as an employee based on an overall assessment.
An undertaking will have more duties to an employee than to an independent contractor.
Read more about the duties of employers (in Norwegian)
The undertaking has a more business-like relationship with an independent contractor. The independent contractor is not an employee, but a contractual partner.
The undertaking does not have an employer responsibility vis-à-vis a contractual partner from whom they purchase a service or with whom they establish a contract for the performance of work. In Norwegian, the word often used for these types of service purchases is “entreprise”.
See also the difference between hiring labour and contract work
HSE responsibility for non-employees
Employers are also sometimes responsible for health, safety and environment (HSE) for persons who are not the undertaking’s employees. Examples include situations where multiple employers have to coordinate their HSE efforts, or when the work is performed by volunteer workers.
Many people are not sure if they are employees
In recent years, we have seen the emergence of a wide range of new jobs and affiliations in the labour market. One example is platform work, where the work is organised through digital platforms (apps).
It’s not clear to many if they are actually employees or not. To determine a person’s classification, one must make an overall assessment of the circumstances, taking into consideration a wide range of factors, see above.
The definition of an employee in the Working Environment Act aims to make it easier to find the correct classification and seeks to ensure that those who are actually employees are afforded the labour protections they are entitled to.
What do I do if I believe I am an employee?
If you believe you should be classified as an employee and have the protections provided by the Working Environment Act, we recommend that you first speak to your superior and possibly your employee or safety representative in the undertaking where you work.
If you and the undertaking cannot agree on your status, you must initiate legal action to determine whether or not you are an employee.
Role of the Norwegian Labour Inspection Authority when affiliations are unclear
The Labour Inspection Authority will provide guidance on the regulatory framework, but we cannot make decisions in individual cases to answer the question of whether or not a person is actually an employee.
In connection with inspections, we sometimes do an advance assessment (preliminary assessment) of the affiliations of the workers. This means we must first consider the classification issue (whether the workers are employees) before we can consider the main issues of the inspection, e.g. whether the accommodation for the employees is in compliance with regulations.
Legislative framework
Section 1-8 of the Working Environment Act: The employee and the employer