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Coronavirus-epidemic – information for foreign companies with project activities in Norway


The coronavirus affects us all and for many people this will lead to changes in working conditions. Some employees will find that they have to prolong their stay in Norway and for others there is restrictions in travel to Norway. We understand that you as employers have a lot to think about and that the safety of your employees come first. This paper is an attempt to address some of the issues you should consider, as a foreign employer with employees in Norway.



Gjertrud H. Behringer

Advokat/ Partner

KPMG i Norge


Relatert innhold

Restrictions for individuals from countries outside of Norway

Everyone who has travelled from outside the Nordic region should be in home quarantine for 14 days after arrival, regardless of whether or not they show symptoms, retroactive from 27th February.

The employee can work during the quarantine-period (if he/she is not sick), for instance from his/her place of accommodation (hotel, apartment) in Norway.

Having seconded employees quarantined and simultaneously working in Norway may prove difficult and complicated. Some employees might therefore decide to allow the employees that should have been sent to Norway, to stay in their home country and work from their "home office" there,- if possible.

Working from home, in Norway or abroad, have certain implications, see below.

Travel insurance

Travel insurance policies will typically contain limitations regarding validity, linked to actual stay in a country, the duration of the travel (time-period away from home) and/or if the travel goes to countries or territories that have been classified as a "risk area" by a public authority or the insurance company itself. It is important to make sure that the travel insurance are updated if the stay in Norway is prolonged, and to verify that Norway, or the employees' home country is subject to restrictions.

Membership in the social security scheme

We recommend to make sure that the application for A1 or social security membership in home country are updated if the work pattern change, or the employees' stay in Norway home country is prolonged.

Tax-office and SUA offices – reduced service

In order to reduce the spread of coronavirus, all tax offices are now closed to the public. However, it is still possible to book an appointment for ID-control. We do not need to know how long they will continue to keep this service open.

The Service Centre for Foreign Workers (SUA) is also closed and we do not have any information on how long this will last. It means that no work permit applications can be submitted until they open again or until there are other alternatives set up.

Tax liability to Norway

Changes in work-rotation or work location might have an impact on the tax liability to Norway.

For instance if an employee will stay in Norway during time off, this might lead to that the individual will become tax resident in Norway and therefore they will have a tax liability to Norway for their global income and wealth.

If the employee work from their home abroad or the stay at home is prolonged, they will most likely be taxable to their home country.

We recommend to keep track of all days in Norway, both work days and non-work days to make sure that you have all relevant information available to make an evaluation of tax liability to Norway.

We will revisit some of these issues in more detail below.

Working from home office

A lot of companies in Norway are now following the recommendation that the employees shall work from home office in order to reduce the risk of getting, or spreading the infection. Foreign companies with operations in Norway, where personnel is seconded to Norway, may also decide to follow these recommendations; either by letting the employees work from home (in their home country), or by letting them work from where they are accommodated in Norway.

Working from home-in Norway – locally employed

As a main rule, the Working Environment Act (WEA) applies, also for work from home. If the working period is temporary, then all the regulations concerning working hours, overtime, work on holidays, work at night, etc. are applicable.

If the work-from-home arrangement becomes more permanent, the Regulation regarding work that is carried out from the employees' home, comes into effect. The regulation is not applicable for seconded personnel,- only local employees. This Regulation sets out some obligations for the employer and specific rules regarding working time etc. and the parties (employer and employee) shall formalize the arrangement in a specific agreement. In our opinion, this Regulation is not applicable in the current situation, where employers are implementing immediate measures to remedy a potential crisis, but it might come into play if these arrangements is protracted.

Salaries etc. shall be reported as normal.

Working from home outside Norway - reporting of salary

If the stay in Norway are prolonged and the work in Norway will last for a longer period than estimated, it is important to make sure that the reporting of salary and period in Norway reflects the actual situation. The period in Norway might also have an impact on the tax liability to Norway and the calculation of tax withholding in Norway.

In the following, we look at two likely scenarios:

  1. In the situation we are now facing, with quarantine for persons coming to Norway from abroad (see above), it might be tempting to let the employees that currently are visiting their home abroad, stay at home when their visit there is over, and let them work from home (if this is possible), instead of letting them travel back to Norway and face the quarantine here (see above).
  2. Other employers have decided that, to the extent it is possible, they allow their employees to travel back to their home country to be with their near and dear ones during this time of crisis, and let them work from home.

If you have employees working from home (outside Norway), but for the benefit of the Norwegian operation, the employee will most likely be taxable to their home country for salary earned during workdays at home. It is therefore important that salary earned during workdays abroad be reported to the Norwegian tax authorities as "income earned abroad".

The salary cost should be allocated to the Norwegian operation.

Furthermore, we recommend to evaluate if there will be a reporting obligation in the employees home country and any tax implications for you as the employer in the country where the employee resides.

Work-rotation schemes

The high number of foreign employees potentially affected by the quarantine provision implemented by the Norwegian government may increase the strain on the employees that are currently working on projects in Norway. This may for instance regard companies applying a rotation scheme for their workers whereby the employees work longer hours than normal while in Norway, against receiving time off later on in accordance with a rotation to be in their home country.

Due to the strict quarantine provisions, this new situation may entail that the workers already in Norway will have to work longer than originally anticipated or be imposed to work overtime work in order to meet project schedules etc. It is important to assess whether this may be done legitimately within the current agreements/approvals regarding rotation schemes (applying average calculation of working hours) or if overtime with the right to separate overtime compensation have to be imposed. During this period, it is also important to observe the mandatory provisions in regards to the maximum use of overtime and the total number of working hours/overtime per day, per week etc. Further, the employer must observe the general requirements regarding the working environment and the actual working hours, implement and document safety considerations, and not expose the employees to adverse physical or mental strain.

The Norwegian Working Environment Act contains an exception from the applicable working hour provisions in case of work that, owing to natural disasters, accidents or other unforeseen events, must be carried out in order to avoid damage to life or property. In such case, the employees shall be ensured corresponding compensatory rest periods or, where this is not possible, other appropriate protection. Whether this exception may apply or not in regards to the current situation, will have to be assessed on a case by case basis.

Rules for temporary lay-off (locally employed)

In this section, we will first explain the rules as they are now, and then present the new (temporary) regulations presented by the Norwegian government on 20 March 2020.

Since the Corona-disease situation currently is of temporary character, there is a possibility of temporary lay-off (NO: "Permittering") of the redundant personnel. A temporary lay-off means that an employee is temporarily relieved of his/her duty to work, at the same time as the employer is temporarily relieved of its duty to pay wages, either partial or in full. Temporary lay-offs may be used to some extent when the company has to curtail its operations for a period of time, limited to a maximum period of 6 months within a 18 month period.

It may be in both the employer's and employee's interest not to permanently terminate the employment relationship with a dismissal with notice. In case of a temporary lay-off, the employment relationship continues to exist. Although temporary lay-offs have been common in working life for a very long time, there are no statutory rules that expressly give an employer the opportunity to temporarily lay off its employees, but applying temporary lay-offs in situations as described above have generally been accepted in case law provided the other conditions are fulfilled. The opportunity to temporarily lay off employees is also authorised in a number of collective bargaining agreements. The Basic Agreement between the Norwegian Federation of Trade Unions (LO) and the Confederation of Norwegian Enterprise (NHO) contains provisions concerning temporary lay-offs in chapter 8. This agreement has to a large extent been the pattern for other agreements and for case law.

In addition, there is an act relating to the duty to pay wages during a temporary lay-off period which is described further below.  

Conditions for temporary lay-offs

Although the right to temporarily lay off employees is not regulated by law, we can upon case law stipulate certain conditions that have to be complied with:

a) Reasonable grounds

Temporary lay-offs must be based on reasonable grounds. These may be the curtailment of operations due to difficulties in the market or obstacles with suppliers, which in both cases means that the employees cannot be employed in a rational manner. One must however do an individual assessment of each employee's function is affected by the relevant situation. As a rule, a temporary lay-off will not be lawful if the function in question is not affected by the relevant situation.

In the situation we are currently facing, it should be fairly easy to argue that the company have experienced a sudden change in market activity, which have led to a reduction
in the amount of workhours. Our general assessment is that the COVID-19 situation, and the impact it has on the company's operations, most likely fulfils the condition on reasonable grounds.

b) Temporary grounds

It is a key prerequisite that the temporary lay-off is due to a temporary situation, e.g. a temporary curtailment of operations or production stoppage. If there is reason to believe that the curtailment of operations is permanent, a dismissal with notice will normally be the correct measure.

At this current stage, it is reasonable to assume that the COVID-19 situation is of a temporary character, and that the condition of temporary grounds is fulfilled.

c) Selection of employees

When the conditions to reasonable and temporary ground are met, the employer must select which employees that are to be laid off. Based upon case law and the Basic Agreement (LO-NHO), seniority should be the most important condition, but other criteria's may also be used for the selection process on the basis of the employer's requirements, e.g. the employee's experience and qualifications.

d) Discussions with employees/ employee representative

In all collective bargaining agreement areas, temporary layoffs are a measure that the employer must discuss with the employees, or employee representatives before it is implemented. Topics that should be up for discussion with the employees include the conditions for temporarily layoffs, other measures taken to avoid temporarily layoffs, as well as the selection criteria's.

If the employees have not organized themselves in a local union, we recommend that you discuss the temporary layoffs with all employees, or an employee representative, e.g. the safety representative (ref. the personnel manual) if one has been elected, and take minutes from such meeting.

e) Layoff notice to employees

As a main rule, the employees are normally entitled to a 14 days' notice before temporary layoff is initiated, and this notice is to be in writing and given to each employee. However, WEA paragraph 15-3, section 10 states that "if operations must wholly or partly be suspended owing to accidents, natural disasters or other unforeseeable events and employees are laid off for that reason, the period of notice for laying off employees engaged in the work suspended may be reduced to 14 days counted from the date of the event. If the period of notice in force is less than 14 days, the shorter period shall apply. " According to the Basic Agreement and case law, in situations as described in the WEA paragraph 15-3 section 10, the layoff notice period may be reduced from 14 to 2 days.

The COVID-19 may be such other unforeseeable event, and this also been confirmed by NAV in recent information (only available in Norwegian): In such case, the notice period for informing of temporary layoff can be reduced from 14 to 2 days, depending on how sudden the operations have been affected by the COVID-19.

Please note that the notice must be dated, include the appropriate notice period, the reason for the temporary layoff, whether the layoff period is full or partial (if partial – to what extent), layoff period, and for how many days the employer have a statutory obligation to pay salary.

f) Notice to NAV

There is also a statutory obligation for the employer to give notice of the temporary layoff to NAV on form NAV 76-08.03, where the minutes from meeting with employees/ employee representatives must be attached.

The employer's obligations

On 13 March 2020 The Norwegian government announced that the number of days for which the employer is liable to pay salary when temporary layoff has been initiated was reduced from 15 to 2 days.

The employee's rights when temporarily laid off

The employee is normally entitled to daily unemployment benefit for up to a total period of 26 weeks (corresponding to the maximum period of temporary lay-offs). Thereafter, the employee must either; return to work, or be permanently laid off through dismissal / workforce reductions. Daily unemployment benefit normally constitutes 62,4% of income during the previous 12 months, but is subject to further conditions. In the case of a partial temporary lay-off, the employee may be entitled to graded daily unemployment benefit, but subject to further conditions.

Please also note that an employee who is temporarily laid off has a duty to take other suitable work during a period when he/she is receiving daily unemployment benefit, and that employees who are fully or partially temporarily laid off may resign from their jobs by giving 14 days' notice. The right to this shortened period of notice only applies during the period when one are temporarily laid off. In other words, one cannot make use of this special rule during the period covered by the lay-off notice.

From temporary layoff to dismissal

On a final note, the employer may also dismiss an employee with notice while the temporary lay-off is in force, but naturally only provided there are reasonable grounds for a dismissal with notice. For instance, if the COVID-19 situation will have a long term effect on the activity level that exceed the maximum period of 6 months of temporary layoff, an alternative may be dismissal and permanent layoffs. If so, the employer's duty to pay salary resumes during the applicable notice period as from the date when the dismissal notice is given. The duty to work resumes as from the same date, so the employee must correspondingly go back to work during the notice period if you wish so.

Final remarks

These are difficult times, and the complexity is multiplied for a foreign company with little experience in Norway. As shown above, there are many, and complicated issues that may be relevant to consider, and we can only hope that this information is useful for you.

© 2021 KPMG AS and KPMG Law Advokatfirma AS, Norwegian limited liability companies and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.


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