Ole Kristian Olsby Mari Vindedal December 7 2022 New proposal to strengthen position of employees: how should businesses deal with the changes? Littler Norway | Employment & Immigration - Norway Ole Kristian Olsby, Mari Vindedal Employment & Immigration Clearer definition of "employee"Proof and classification of independent contractor Platform workers can be granted employee statusConsiderations for businessesIn Proposal 14,(1) which was tabled in the Cabinet on 18 November 2022, the government has proposed several changes which are primarily intended to strengthen the position of employees. The changes are significant for employers. The changes are a follow-up to the Fougner committee's report,(2) and come as a result of announced measures in the Hurdal platform to strengthen the position of employees.Clearer definition of "employee"The government proposes to change the Working Environment Act's definition of "employee" to clarify what constitutes an employee within the meaning of the law. The current wording states that anyone who "performs work in the service of others" is an employee. In the new proposal, this has been changed to "anyone who performs work for and subordinates to another". This has been done to clearly highlight that what particularly distinguishes an employee from an independent contractor is that the person in question is subject to management, control and leadership in the execution of the work.In addition, it is emphasised that if the person in question makes their personal working capacity available on an ongoing basis, this suggests that the person is an employee. This means that the employee as a starting point cannot pay others to carry out the work tasks, and that the work must be of a stable nature.However, it is not intended to change the applicable law. The points mentioned above are just some of several points in a larger assessment of whether a person is to be considered an employee. These elements are often considered in contrast to a person being an independent contractor. The actual circumstances in the case are still decisive, but the term "employee" must be interpreted broadly so that individuals who need protection also receives it.Proof and classification of independent contractor The government is also proposing a new rule that gives clients the burden of proof that a person is not an employee. Currently, it is the employer's responsibility to choose the right form of affiliation based on the situation. With the new proposal, the starting point is that the person is to be considered an employee if nothing else is documented by the business. In such cases, high demands will be placed on the business being able to prove that the person is an independent contractor.The reason why the Fougner committee originally proposed a similar rule of presumption was to reduce the number of misclassifications and possible circumvention of the regulations. With this proposal, the government hopes to give businesses an incentive to clarify employee status early on. In addition, the government believes that the rule will be able to give those who are unsure whether they are an employee an opportunity to clarify their legal position before a court.Platform workers can be granted employee status The government assumes that more people will be given employee status as a result of the new rule, where businesses must bear the burden of proof. Among other things, digital platform workers will be able to get employee status because of the proposal. It will also be up to the platform companies to prove that the platform workers are not employees.Considerations for businessesFor businesses, the proposed changes could mean that people who carry out work for them will more easily be classified as employees. If a business, as part of its daily operation, manages, controls and leads an individual in the execution of their work, this suggests that that person is an employee.Businesses that use independent contractors should think through both the design of the contract and how the work is managed, controlled and led in practice. The business should be aware of the extent to which it is decided, for example, when during the day or week the work is to be carried out and where and how the tasks are to be carried out.In general, businesses should clarify early on whether the contract implies that a person is an employee or an independent contractor, and that what has been agreed between the parties is also observed in practice. In addition to matters relating to management, control and leadership, the following aspects will typically suggest that the person is an employee, and not an independent contractor:the business provides a workspace, machines, tools, work materials or other aids that are necessary for the execution of the work;the work is of a stable nature and can be terminated with specific deadlines; andthe person concerned mainly works for one client and receives remuneration in one form or another.For further information on this topic please contact Ole Kristian Olsby or Mari Vindedal at Homble Olsby | Littler by telephone (+47 23 89 75 70) or email ([email protected] or [email protected]). The Homble Olsby | Littler website can be accessed at www.homble-olsby.no.Endnotes(1) L-(2022–2023).(2) NOU 2021:9.