Norway: New Ruling from the Supreme Court Regarding the Principles for Final Settlement in Cases of Misclassification of Employees as Contractors

In December 2024, the Supreme Court issued a ruling clarifying the risks that companies face due to incorrect classification of workers. The ruling also clarified issues regarding the determination and limitation of monetary claims.

The case involved three healthcare workers who had been wrongly classified as contractors rather than employees. The case before the Supreme Court concerned the financial settlement resulting from this misclassification.

The Supreme Court decided that the mandatory rules of the Working Environment Act should be used to calculate the additional compensation the workers were entitled to, unless a valid agreement specified otherwise, and that the burden of proof for alleged overcompensation rests with the employer.

Regarding holiday pay and statute of limitations, the Supreme Court concluded that holiday pay should be calculated based on the fees de facto received by the workers and that the workers’ claims for holiday pay were not time-barred.