The board of the Association of Local Authorities in Iceland (SÍSF) will try to reach an agreement with local authorities across the country on reducing the working hours of municipal employees by five percent to prevent layoffs, which would mean an additional ten vacation days without pay.
Halldór Halldórsson, mayor of Ísafjördur and chairman of SÍSF. Photo by Páll Stefánsson.
The idea will be presented at a consultative meeting next week where the financial positions of municipalities will be discussed, Fréttabladid reports.
“The unavoidable cut will mostly hit municipal employees because salaries are the largest part of operational costs. We want to avoid layoffs for as long as we can and that’s why we’ve proposed lowering the salaries of all employees of local authorities in the country by five percent in exchange for ten vacation days per year,” explained Halldór Halldórsson, mayor of Ísafjördur and chairman of SÍSF.
Almost 20,000 people are employed by the local authorities and labor costs are approximately ISK 80 billion (USD 631 million, EUR 417 million). Roughly estimated, a five percent cut to work percentage, would save ISK 4 billion (USD 32 million, EUR 24 million) and save around 1,000 jobs.
Halldórsson pointed out that a number of private companies have chosen this method of rationalization. Akureyri was the first municipality to propose this method for the local authorities and last month, Ísafjördur followed suit. Now SÍSF wants it to be a joint initiative among all local authorities in the country.
“We want to take this idea, discuss it and work it out. Not for some specific professions but for municipal employees in general. It is difficult to implement this idea so that it suits 78 local authorities, but we’re working on it,” Halldórsson added.
According to recent news, the ruling parties, the Social Democrats and the Left-Greens, have discussed various ways to make cuts during their ongoing government talks—they have an ISK 170 billion (USD 1.3 billion, EUR 1.0 billion) national budget gap to fill in the next three years.
The state employs 22,000 people and, according to information from the office of the state treasury, annual labor costs amount to ISK 110 billion (USD 870 million, EUR 650 million). The five-percent method would thus save ISK 5.5 billion (USD 43 million, EUR 33 million) for the state per year.