Hiring in labour – when is it lawful?
Hiring from a staffing agency is now permitted only in particular cases, including covering for an absent employee, work placements and hiring agreed with a trade union. The agency has to be approved by the Labour Inspection Authority, and in Oslo, Akershus, Buskerud, Østfold and Vestfold hiring for building work on construction sites is prohibited. Continuous hiring for more than three years gives a right to permanent employment with the hirer.
Hiring in labour or buying a service?
In hiring, labour is placed at the customer's disposal. In a contract for services, a result is bought. Particular weight is given to who directs the work and who is responsible for the result. This is the same kind of line as between an employee and a contractor – see Freelancer, contractor or employee?
When can you hire from a staffing agency?
Among other cases: covering for an absent employee, work placements, certain labour market measures, certain positions in organised sport, hiring agreed with a trade union, and under specific exceptions for health personnel and specialist expertise. The general ability to hire for «work of a temporary nature» has gone. Where none of the grounds is met, the hiring is unlawful – however short the need.
The agency has to be approved
From 2024 staffing agencies have to be approved by the Labour Inspection Authority. It is in the hirer's interest to check the approval before entering into the agreement. The register of approvals is public.
A prohibition in construction
It is prohibited to hire from a staffing agency for building work on construction sites in Oslo, Akershus, Buskerud, Østfold and Vestfold. The prohibition is geographical and applies regardless of what basis could otherwise have been used. For contractors operating across several counties, the same staffing agreement can be lawful on one project and unlawful on another. Hiring is also a standing topic on inspections – see A labour crime inspection on site
Sole proprietorships and one-person companies
These cannot be used as approved staffing agencies, but they can deliver a genuine engagement or service. The distinction is decisive: where you are in reality buying labour from an individual you direct yourself, it is not a service purchase whatever the invoice says.
Hiring from a production business
Hiring from a business whose purpose is not to hire out labour follows more flexible rules. But among other things the person hired out has to be permanently employed, the hiring has to be within the same field as the main activity, and the hiring-out activity must not cover more than 50% of the permanent employees. A business hiring out half its staff is in practice a staffing agency, and the strict rules then apply.
The three-year rule
Continuous hiring under section 14-12 of the Working Environment Act for more than three years gives a right to permanent employment with the hirer. The rule does not apply generally in the same way to hiring from a production business. For the hirer that means long hiring arrangements have to be watched. The right arises from the passage of time, not from anyone claiming it.
Equal treatment and joint liability
Hired workers are entitled to equal treatment on pay, working hours, holiday and expenses. They must not have worse terms than if they were employed by the hirer. The hirer can become jointly and severally liable for pay claims. But that liability does not apply where bankruptcy has been opened in the staffing agency – which is precisely the situation where the hired workers need it most, and a reason to assess the counterparty's solidity before signing.
Health and safety responsibility is shared
The staffing agency and the hirer share responsibility for health, safety and the working environment. The split should be settled in writing in the agreement. In practice it is the hirer who controls the workplace, and who therefore has to handle the day to day.
What unlawful hiring can cost
Unlawful hiring can lead to a claim for permanent employment, damages, and measures from the Labour Inspection Authority. The claim to permanent employment is the heaviest: the business can end up with an employee it has not budgeted for, with full employment protection. We help with the financial and payroll side of hiring. The geographical prohibition mainly affects construction – see Accounting for construction
Read more
This is general guidance, not advice on your specific case. Deadlines, rates and amounts change – always check the current rules, or get in touch with us.
More on payroll and employees
- Your first employee – what has to be in place before the first payroll?
- Freelancer, contractor or employee – what is the difference?
- Holiday pay – how is it calculated and paid?
- Sick pay and reimbursement from NAV – what is the employer responsible for?
- Employer's national insurance contributions – which zones and rates apply?
- Expense claims, subsistence and mileage – what can be paid free of withholding?
- Temporary lay-offs – which rules and pay obligations apply?
- Employees abroad or foreign employees in Norway – what applies?
- A monthly checklist for the payroll run – what has to be done, and when?
Is it urgent?
We can work out what actually has to be done, what documentation exists and how quickly it can be sorted. You can also reach us in the evenings and at weekends.
GET IN TOUCH