Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
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A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Norway can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Norway, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Norway.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Norway is not the same as paying workers in your own country. Employees have to be paid using Norway’s employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
The standard workday is 9 hours per day, with one hour included for lunch.
The typical Norwegian employee work five day weeks scheduled between 0600 and 1800 and has arranged work between 37 and 38 hours per week.
Any hours worked in excess of 9 hours per day and 40 hours per week are considered overtime and employees must be paid at a premium rate of at least 40% over the normal rate, or provided time off in lieu.
Work hours should not exceed more than 10 hours of overtime per week, 25 hours of overtime per every 4 weeks, and 200 hours of overtime per every 1 year.
Employer
Employee
The employer and employee determine the payroll frequency stipulated in the employment contract. However, salary payments are to be made at least once a month.
In Norway, there is no mandatory provision for a 13-month salary. Performance- based bonuses are granted at the desire of the employer.
Employees are entitled to four weeks and one day of paid holiday each calendar year.
If the company is bound by a collective agreement, its employees are entitled to five weeks' holiday a year.
Five weeks is the most common arrangement, even in companies that are not bound by a collective agreement.
Annual leave is compensated at a minimum rate of 10.20% of the employee’s total salary, commonly paid in June.
Some collective bargaining agreements will state an increased rate of the vacation payment at 12.00%, and employees over the age of 60 are compensated at 12.50% of their total salary.
There are 10 public holidays.
The duration of sick leave entitlement provided to workers is dependent on how long they have been employed by their employer:
Female employees are entitled to paid maternity leave for 3 weeks prior to giving birth and must take a leave of absence for the first 6 weeks after birth unless able to provide a medical certificate indicating it is better to resume work.
Female employees are entitled to 59 weeks of paid maternity leave which is compensated by the national insurance.
The national insurance will pay a mother 80.00% of the regular income for 59 weeks of leave. If the employee opts to take a reduced leave of 49 weeks, they will be compensated at 100.00% of their income.
Parents are entitled to a leave of absence for a total of 47 weeks, or up to 57 weeks with reduced benefits, before the child’s third birthday.
Male employees are entitled to 2 weeks’ unpaid paternity leave.
Maternity leave may be split between the mother and father; however, three weeks before the expected due date and six weeks after the birth are reserved for the mother.
A parent can take an additional year of unpaid leave after maternity leave.
Employees who earn more than 480,000 NOK annually are not entitled to paid parental leave.
Occupational injury insurance - an employee is injured in the workplace, they are entitled to compensation up to 72,662 NOK per year. If the employee is unable to work, they will be entitled to disability compensation. The rate of compensation depends on the employee’s incapacity to work.
Employees are entitled to one (1) paid day off on the occasion of their wedding.
There are no laws in Norway that gives day off for funerals. But most companies however do still give you 1 or 2 days off with pay for funerals for close family members
The main form of dismissal is with prior notice. Such dismissal must either be objectively justified on the basis of circumstances relating to the undertaking, the employer or the employee.
If termination is related to curtail or rationalization related to the undertaking, the termination is not objectively justified if the employer has other suitable work in the undertaking to offer the employee.
Furthermore, when deciding whether a dismissal is objectively justified by curtailed operations or rationalization measures, the needs of the undertaking must be weighed against the disadvantage caused by the dismissal for the individual employee.
Additionally, where employees are dismissed on the grounds of circumstances related to the business or organization, the criteria for selection of employees for dismissal must be objectively justified.
An employee who has been dismissed, owing to circumstances relating to the undertaking, has a preferential right to a new appointment at the same undertaking, unless the vacant post is one for which the employee is not qualified.
The statutory notice period for an employer when dismissing an employee varies between 1 and 6 months
There are no statutory provisions on severance or redundancy payment.
The notice period in Norway is:
The statutory notice period for an employer when dismissing an employee varies between 1 and 6 months, depending on the term of employment, age and length of service with the company. It is most common to agree to 3 months’ notice.
Employees giving notice normally have to observe notice periods as agreed to in the employment contract, but these cannot be longer than 3 months.
There are no statutory provisions on severance or redundancy payment.
These can be included in collective agreements.
Probationary periods in Norway are typically between 3 and 6 months.
