Employers and unions reach two-year wage agreement in Faroe Islands

A two-year collective bargaining agreement has been reached between the Faroese Employers’ Association and trade unions, public broadcaster Kringvarp Føroya reports.

The deal includes a wage increase of 4.17 DKK per hour from 1 May this year, followed by a further 5.97 DKK rise from 1 May 2027, bringing the hourly rate to 171.94 DKK. Overtime pay will also increase by 0.5% from May 2027, reaching 12.5%.

A portion of the wage fund will be allocated to raise seniority-based supplements. Additional changes have been made to specific sector agreements, including expanded holiday entitlements for union members. In the capital, Tórshavn, 1 November will become a half-day holiday, while unions outside the capital will now observe St. Olav’s Eve as a full holiday.

The allowance for head injury compensation has been increased from 9.15% to 15%. Workers on fixed salaries will now receive the difference between their wage and unemployment benefits for three months instead of two. Employers will also be required to cover the gap between wages and sick pay for up to six months in cases of work-related injuries, with liability extended from 12 to 18 months.