A number of Icelandic horse rental companies use the free or low-paid labour of migrant workers, giving them an enormous competitive advantage over companies adhering to laws and regulations and paying employees according to union wage agreements. Stundin reported on the practice, known as “social dumping.”
Information gathered by Stundin shows more than a dozen horse rental companies violate laws and collective agreements by hiring unpaid labourers, or paying employees wages far lower than collective agreements indicate. As free labour is not taxable, social dumping can save companies ISK tens of millions per year and allow them to undercut competitors.
Stundin reached out to several horse rental companies using the pseudonym Sara Larsen. Sara said she was a 19-year-old Danish horsewoman looking for work in Iceland. Several companies offered Sara a job paying well under minimum wage and collective agreements, including Sólhestar in Borgargerði, Geysir hestar in Bláskógabyggð, Hestasport in Varmahlíð, and Alhestar in Þorlákshöfn.
A few companies did respond indicating they offer wages conforming with union agreements: Íslenski Hesturinn, Vík Horse Adventure, Abbi Island, Traðir, and Eldhestar.
Sólmundur Sigurðsson from Sólhestar told Stundin the company does not have any unpaid employees. “If they have been unpaid then the staff came here via schools,” he stated. “Otherwise we don’t have any, we put everyone on a kennitala [social insurance number] and all of our staff is registered.” The document Sara received from Sólhestar, however, stated she did not need a kennitala until she had been working for three months.
Sólhestar’s annual report from 2016 states a total of seven employees during the year and salary and wage-related expenses to be only ISK 17 million that year, indicating employees were paid well below minimum wage. At least one Facebook post suggests the actual number of employees were even higher.
Wages and working conditions are worse elsewhere. When Sara contacted Lýsuhól horse rental, she was offered remuneration in the form of food and housing, but no pay. “Hi Sara, there are no wages paid by us. As you know it is very expensive to live and eat in Iceland. You get your own bed in a room with other girls,” the company wrote.
Kiðafell horse rental told Sara she would possibly get paid something, depending on “how much work there is and how much we can use you.” Similar conditions were offered at horse rentals around the country. Employees were often given one day off a week, or less.
According to Icelandic law, unpaid work is only justified in the case of humanitarian or relief organizations, work related to nature conservation, or work that would not be carried out otherwise. The Icelandic Confederation of Labour website states unpaid work in the context of “economic activity,” i.e. production and sale of goods and services on the market, usually for profit and in competition with companies in the same industry, is considered unacceptable social dumping. Food and housing can legally be considered remuneration for work and may be deducted from wages. This process, however, is subject to many restrictions and does not exclude companies from conforming to minimum wage regulation and union wage agreements. The confederation website specifically mentions the horse rental industry as one where social dumping is widespread.
When Sara contacted Íslenski Hesturinn, she was told the company would not be hiring in the near future, and was sent a link with information on workers’ rights in Iceland. Sveinn Atli Gunnarsson, one of the owners of the company, told Stundin all employees pay taxes and duties according to law. “We are proud to take part in keeping the economy running,” he stated. “The human rights of our employees are important to us and we want to have happy staff who wants to work for us for a long time.”
Salary and wage-related expenses at Íslenski Hesturinn amounted to nearly ISK 55 million in 2016. Sólhestar paid around three times lower for a similar number of staff members. “There is a lot of competition in the tourism industry, and not least in horse rental,” Sveinn stated. “We hope of course that all our competitors are on the right side of things and that we can trust all competition to be on equal footing.”