pay and working conditions

Pay and working conditions requirements are contract clauses that contracting authorities must include in public procurement to ensure that employees of suppliers and subcontractors receive fair wages and decent employment terms. Rooted in ILO Convention No. 94, these requirements prevent public contracts from fuelling a race to the bottom on labour standards.

How do pay and working conditions requirements work?

In the EU/EEA, Article 18(2) of Directive 2014/24/EU obliges Member States to ensure compliance with applicable social and labour law obligations during contract performance. Many countries go further with sector-specific regulations.

In Norway, a dedicated regulation (Forskrift om lønns- og arbeidsvilkår i offentlige kontrakter, 2008) requires contracting authorities to include clauses ensuring that workers on public contracts receive pay and conditions in line with either:

• Generally applicable collective agreements — in sectors where collective agreements have been universalised (such as construction, cleaning, and electrical work), the statutory minimum rates apply.
• Nationwide collective agreements — in sectors without universalisation, conditions must match the relevant nationwide collective agreement for the industry.

The requirements cover minimum working hours, wages (including overtime, shift, and unsocial hours supplements), and reimbursement of travel, meal, and accommodation expenses.

Scope and thresholds

In Norway, the regulation applies to service contracts and works contracts above specific thresholds: NOK 1.3 million (excl. VAT) for state authorities and NOK 2.05 million for other contracting authorities. The requirement must be disclosed in the contract notice or tender documents.

Monitoring and enforcement

Contracting authorities have an active duty to monitor compliance throughout the contract period. Suppliers must provide documentation on request, and contracts must include sanctions for non-compliance — such as penalty clauses, withholding of payment, or termination. The Norwegian Labour Inspection Authority oversees enforcement at the national level. Tools like Cobrief can help suppliers track pay and working conditions requirements across different competitions.

Pay and working conditions requirements are part of a broader European trend toward socially responsible procurement. In Norway, they form a cornerstone of the Norgesmodellen (Norway Model) and represent one of the EEA's most comprehensive approaches to combating social dumping through public purchasing power.