From 1 July 2025, the authority gained the power to impose administrative fees for non-compliance with requirements on pay and working condition in public procurement.
Read this article in Swedish on Arbeidsliv i Norden
These muscles will be put to use, the ministry wrote when the new powers were introduced. The Labour Inspection Authority “shall adopt a strict enforcement approach and make greater use of violation penalty,” it was stated at the time.
Under Norwegian law, contracting authorities must, among other things, set requirements relating to pay and working conditions, HSE cards (ID cards granting access to construction sites), occupational pensions and certain language skills in contracts awarded through competitive tendering.
And it is not enough simply to include these demands in the contract, authorities must also ensure compliance through monitoring and inspections.
The contracting authorities are in turn subject to controls from the Labour Inspection Authority. It has the power to issue orders and take any action necessary, and thus also the ability to impose administrative fines.
Administrative fines may be imposed if someone who has acted on behalf of the authority has negligently or intentionally breached, for example, requirements relating to follow-up and control.
At most, the fine can amount to whichever is higher; 50 times the basic amount in the Norwegian social security system (around 6.2 billion Norwegian kroner or € 548m) or 4 per cent of annual turnover.
Annual turnover is defined as actual turnover of goods and services under the definition of VAT legislation. For municipalities this means that state transfers and tax revenues are not included in the turnover calculation.
A range of factors is taken into account when assessing whether a penalty should be imposed and, if so, its size.
Some factors carry more weight, including how serious the breach is, the degree of negligence, whether it is a repeated infringement and the extent to which the organisation could have prevented the breach through measures such as procedures, guidelines, training or monitoring.
In total, the ten municipalities were issued administrative fines amounting to nearly 2.4 million Norwegian kroner (€ 212,000). All had failed to carry out the necessary checks on pay and working conditions in their contracts and had also failed to conduct adequate risk assessments.
Their efforts to improve after the inspection, by reminding administrative staff of the importance of carrying out checks and by actually performing them, were not sufficient to avoid the fine.
Three municipalities have appealed the decision to the higher administrative body, the Directorate of the Norwegian Labour Inspection Authority.
The article was first published in EU og Arbetsrätt, number 2/2026: Brist på kontroll av arbetsvillkor vid upphandling står norska kommuner dyrt – EU och Arbetsrätt
