Iceland

Iceland, located in Europe, appears in 2 of the three employment-protection datasets tracked on PlainEmploy (ILO EPLex, World Bank B-READY 2025, and OECD EPL). As an OECD member, it is included in the OECD's long-running historical EPL series. The World Bank B-READY 2025 overall labor score stands at 65.2/100, blending regulation quality, public services, and process efficiency. The OECD EPL overall strictness index is 2.20/6.0, where higher values indicate stricter rules on individual and collective dismissal.

In practice, the World Bank estimates a full dismissal process takes about 0.0 weeks from start to finish. Third-party approval for an individual dismissal is not required, which materially affects employer flexibility.

Labor disputes take an average of 5.1 months to resolve through formal channels. Roughly 0.3% of firms surveyed by the World Bank report experiencing labor disputes, signaling how frequently these rules are exercised. Employer social contributions equal 5.2% of salary, a meaningful cost layer on top of wages. Historically, Iceland's OECD EPL score moved from 1.40 in 2008 to 2.20 in 2019, showing the direction of reform over time. 6 direct country-vs-country comparisons are available below, letting you see how Iceland stacks up against peers on the same metrics.

These figures draw on three different measurement traditions, so read each one on its own terms before comparing across countries. The ILO EPLex composite condenses statutory termination rules into a single index from zero to one, where higher numbers mean stronger legal protection against dismissal. The World Bank Business Ready 2025 labor score runs from zero to one hundred and blends the quality of regulation with how well public services and dispute processes actually work in practice. The OECD employment protection index uses a zero to six scale and only covers member economies, but it offers the longest historical series, which makes it the better choice for tracking reform over time. A country can score strictly on paper yet still process dismissals quickly, so always weigh the statutory index against the practical estimates. Where a country appears in fewer than all three datasets, treat the missing measures as not yet collected rather than as a sign of weak protection, and revisit this page when new releases are published because indicators can shift year over year.