Labor Law Updates as of January 2025

Changes to the A-Melding from January 1, 2025

In the A-Melding, employers report employees’ income, employment relationships, advance tax deductions, and garnishments, in addition to employer’s national insurance contributions. Starting in 2025, the Norwegian Tax Administration will introduce three new employment categories in the A-Melding. This will affect how you, as an employer, report in the A-Melding. Employers are now required to specify the type of employment for each employee in the A-Melding. This also applies to the categories “Permanently Employed and Hired Out,” “Temporarily Employed and Hired Out,” and “Temporary Employment as On-Call Substitute.” Until now, employers have only been obligated to report whether an employee is permanent or temporary.

Government Removes the Additional Employer’s Contribution

On January 1, 2023, the government introduced an extra employer’s contribution of 5% on wages exceeding NOK 850,000. The government has decided to abolish this additional contribution as of January 1, 2025.

New Supreme Court Ruling on Misclassification of Employees

For several years, the courts have dealt with cases clarifying the principles for financial settlements following the misclassification of employees as independent contractors. Misclassification concerns work performed by individuals presented as self-employed, who in reality should be considered employees. In ruling HR-2024-2368-A, the Supreme Court addressed two key issues regarding the financial settlement that must be carried out once misclassification is established:

1. The principles for calculating any additional compensation an employee may be entitled to when misclassification has occurred.
2. Whether payments made under the contractor agreement can form the basis for holiday pay (feriepenger), and when such claims become time-barred.

The case involved three healthcare workers who had been incorrectly classified as independent contractors rather than employees. A majority of three justices in the Supreme Court held that, unless otherwise validly agreed, misclassification means that the mandatory rules of the Working Environment Act (arbeidsmiljøloven) must apply in calculating any additional compensation the worker is entitled to. Without such an agreement, work performed beyond the Act’s standard working hours counts as overtime. The Supreme Court also ruled that if the amount already paid fully or partially compensates the claimed entitlements, a deduction must be made to avoid double compensation. In individual cases, this must be assessed concretely, with the burden of proof lying with the employer.

The Court was unanimous in concluding that holiday pay should be calculated based on the fee (honorar) received, since that fee constitutes payment for work under the Holiday Act (ferieloven). The Court also agreed that holiday pay claims were not time-barred, because an incorrectly classified employee cannot assert their legal rights under the law until the misclassification is discovered. However, the minority of justices had a different view on the back-payment calculation for wages, which also affected the size of the holiday pay claim.