“Clear message that wage theft is a crime”

„We are sending clear messages that wage theft is a crime, and not just a breach of rules.“ This was stated in a speech by Lars Christian Fjeldstad at the Efling meeting today. Such messages are at the core of Norwegian legislation where wage theft is defined as a punishable economic crime and can carry up to six years of imprisonment. Fjeldstad, who is a lawyer of the Norwegian Confederation of Trade Unions LO, went in his speech in detail over the experience of the Norwegians with the legislation.

In his article, Fjeldstad traced how Norway became the first European country to introduce special punitive provisions against wage theft, after a bill on the matter was passed in 2021 and came into effect at the beginning of 2022. He pointed out that the initiative could be traced back to a proposal from the Fagforbundet, Norway's largest trade union, which enjoyed the support of both the LO and the Norwegian Workers' Union.

Up to six years imprisonment for wage theft

Fjeldstad explained that according to the law, employers who knowingly withhold wages, vacation or other payments can be sentenced to up to two years in prison, and up to six years if the violations are serious.

"The laws, among other things, aim to prevent those who indulge in wage theft from gaining a competitive advantage, and also to protect workers who are often in a vulnerable position," Fjeldstad said.

He pointed out that the provision covers both statutory and contractual rights, including overtime, vacation and other payments.

Key point intention

In the article Fjeldstad emphasized that the laws are aimed at deliberate violations. "We are not punishing honest mistakes," he said, explaining that genuine misunderstanding or disagreement over interpretation of the rules generally falls outside the realm of punishment.

"But when an employer knows that he is committing wage theft, to profit, then it is a punishable conduct," he added.

Fjeldstad reviewed several examples from Norwegian courts. Among them he mentioned a case where an employer was convicted of having underpaid an employee wages amounting to millions of krona, as well as the infamous Fibertec case where the CEO received a custodial sentence for large-scale wage theft.

It then drew special attention to a recent appellate judgment from January 2026, where systematic underpayment to 13 employees was considered a continuous crime. “The court rejected that financial difficulties could justify such conduct,” said Fjeldstad.

A hard stance in Iceland prevents legislation

In the discussion after the lecture, Solveig Anna Jónsdóttir, chair of Efling, pointed out that the amounts Fjeldstad mentioned would not be dissimilar to those that Efling sees in its cases here in the country. However, the difference lies in the fact that sanctions in Iceland would be much weaker.

Fjeldstad also said that in Norway a broad consensus had emerged about the necessity of such legislation and that it had not faced significant political opposition. Solveig Anna described it as analogous to the situation in Iceland, where harsh opposition had been met with attempts to enact comparable laws.

She said she considered it incomprehensible in light of the fact that she was certain that support for such legislation would be very high among the public. “Pressure from wage payers on politicians is such that it almost resembles organized criminal activity,” said Solveig Anna.

Necessary to enact comparable laws in Iceland

Wage theft has been a topic of discussion in the Icelandic labour market, not least in connection with the status of foreign workers and underbidding in certain sectors.

From Fjeldstad's lecture and the ensuing discussion, one can conclude that clear and non‑deductible legislation, where wage theft is defined as a punishable economic crime, would be an effective way to protect workers' rights and promote healthier competition.

It is clear that such legislation is necessary in Iceland, as it would strengthen the position of workers and set clear limits so that wage theft will not be tolerated. Efling calls on the authorities to act now and follow the example of our neighbors in Norway.

Sólveig Anna Jónsdóttir, chairperson Efling, Lars Christian Fjeldstad, logistics specialist LO, and Finnbjörn Hermannsson, president of ASÍ.