Union funds

Employers are required under Act No. 55/1980 to subtract from the wages of their workers, contributions payable to their trade union, according to such rules as specified in the applicable collective agreements. Union contributions are determined by the trade unions and usually set to 0.7 to 1% of the worker’s wages. Employers are furthermore under a legal obligation based on Act No. 19/1979 and Act No. 55/1980 to pay a 1% premium into sickness benefit funds and a 0.25% premium into holiday funds operated by trade unions. Collective agreements also provide for the payment by employers of a vocational fund fee of 0.30%. The above union fees are collected on a monthly basis and paid with premium contributions to occupational pension’s funds. The Icelandic Vocational Rehabilitation Fund was founded in 2008 and the goal of the fund is to decrease systematically the probability that employees loose their jobs due to incapacity and sickness, by increasing their activities, promoting vocational rehabilitation (VIRK) and other interventions. Employers are under the obligations by the collective agreement to pay 0,13% of each worker´s wages to the fund.