In a three-story house in the capital area, there are three identical apartments, one on each floor. The premises are rather dilapidated, with few furnishings and only mattresses on the floors in most of the bedrooms. When we visited, we were told that cockroaches had been spotted in the basement, where one of the apartments is located. The house is home to 15-20 men, all from Latvia. They are here through a staffing agency that provides them with both work and shelter.

One of them, Sandris Slogis, agrees to speak with us. Sandris is 49 years old and a trained carpenter. He is from a small town in Latvia and has a ten-year-old son back home.

'I came to work because the pay was supposed to be good,' Sandris says when asked why he came to Iceland. 'My friends were here many years ago and said it was a good place to be.'

Not Much Left Over

Sandris got a contact with a staffing agency that has offices both in Latvia and Iceland. He was promised a salary of around half a million ISK per month, after taxes. But the reality was different.

Sandris received 2,500 ISK per hour for regular work and 4,500 ISK for overtime, before taxes. But he says that various costs were deducted from his salary, including 90,000 ISK for renting a room. This meant that, at most, he was receiving around 300,000 ISK per month, which was 200,000 ISK less than what he had been promised.

'From this money, we pay for food and other expenses, but food is very expensive in Iceland. And there’s not much left over because we send money to our families back home,' says Sandris.

‘My dream is shattered. I came hoping for good pay, but that dream is gone. My family is not happy, and I am not happy either. And it's not just me. My coworkers are facing the same thing.’

Nothing Changes 

Sandris and his colleagues are far from the only ones who have experienced exploitation and possible labour trafficking in the Icelandic labour market. It happens every day, especially now with a severe shortage of labour, particularly in the construction industry. That sector, like the hospitality industry, relies heavily on foreign labour because there simply aren’t enough workers. This situation creates certain opportunities, even for those who don’t hesitate to break laws, contracts, and general decency.

Six years ago, Kveikur covered labour trafficking and exploitation in the Icelandic labour market. The program revealed how foreign workers, many of whom came to the country through staffing agencies, were sometimes treated. The broadcast caused a public outcry, and authorities promised to address the issue.

But has this changed? Or do we still rely on a workforce that lives in cramped quarters with wages below the minimum?

'The short answer is yes,' says Saga Kjartansdóttir, an expert in the legal and labour market department of the Icelandic Confederation of Labour (ASÍ) union. 'Human trafficking and labour exploitation thrive in the Icelandic labour market. Trade unions have been pointing out for years that this is a growing problem in the Icelandic labour market. And of course, exploitation and trafficking exist here, just as they do elsewhere.'

Many Cases

By definition, labour trafficking occurs when someone, usually an employer, profits from another person's labour. The worker is deceived into accepting a job with false information about wages, working hours, workplace conditions, or housing. Threats are often used to prevent the victim from seeking help or quitting their job.

'We have received quite a few cases in the past year and a half where there is suspicion of exploitation or labour trafficking in the Icelandic labour market. And we are specifically talking about staffing agencies,' says Gundega Jaunlinina, the vice-chair of the union Hlíf in Hafnarfjörður.

Saga says that so far this year, ASÍ has reported five companies to the police due to suspicions of labour trafficking. But that is just the tip of the iceberg.

No Answers

Sandris and his colleagues at the staffing agency were made to work very long hours. A typical workday was 10 hours. And not just five days a week, as they also worked on Saturdays and Sundays.

'If you don’t take the job, you won’t get work next time. So we work long and hard days,' says Sandris, adding that it was futile to complain about wages or working hours to the managers of the staffing agency.

'We spoke to the agency but never received any answers. If the questions don’t relate to the agency’s interests, they are not answered.'

'We Haven’t Seen These Numbers'

Trade unions have particular concerns about these staffing agencies. As the name suggests, they are companies that import staff from abroad and lease them out, often to contractors but also to others, such as municipalities. Some of the staffing agencies that Kveikur reported on in 2018 are still operating, albeit under different names and tax identification numbers. Some of them generate hundreds of millions, even close to a billion ISK, in revenue annually, but their methods of bringing staff to the country have changed little.

'Usually, it’s an advertisement or some kind of promise in their home country,' Gundega explains. 'This is people coming from Eastern Europe; Latvia, Lithuania, Poland, Ukraine, and also Romania. The advertisements promise good wages, housing, and transportation to and from work. We have seen promised amounts ranging from 3,000 to 3,500 euros per month after taxes. But we haven’t seen these numbers when we examine the payslips of the individuals.'

Kveikur has in its possession a payslip from a staffing agency. It shows that the worker in question works 90 hours of regular time for 2,230 ISK per hour and nearly seven hours of overtime for 4,015 ISK per hour. His total wages for that month amount to just over 252,000 ISK. However, this amount does not take into account the deductions from his wages. Among these are over 77,000 ISK for rent, 10,000 ISK for car use, and over 53,000 ISK for flights and airport shuttles. The remaining take-home pay is 33,748 ISK.

‘Most of us are used to receiving our wages, with yes, of course, taxes and contributions being deducted and so on,’ says Saga. ‘But we receive our wages and then manage them ourselves. We pay rent or mortgage, buy groceries, pay for the car, and so forth. But in this model, it is often the case that the employer takes care of all these deductions. All these deductions are the responsibility of the employer. So you don’t have control over your wages as you normally would.’

Trade unions have seen very extreme cases, even where an employee's payslip shows a negative balance, meaning he actually owes money to his employer after the month.

‘And the individual received a claim in their online banking. They were deducting all sorts of things, including three months' rent in advance, and so on. Various ways were found to deduct all the wages back. So we have really seen the whole spectrum. We have seen payslips with 30,000 ISK paid out, 100,000 ISK paid out, and all the way down to less than zero,’ says Saga.

Never Sent Money Home

At the beginning of August, Saga, Gundega, and other representatives from ASÍ went to Riga, Latvia, from where many workers have come to Iceland through staffing agencies. Saga says that a particular staffing agency had specifically advertised for workers in that country, promising good conditions. But as the ASÍ representatives discovered when they interviewed some of these men in Riga, their experiences were far from aligning with the promises made by the staffing agencies.

‘The wages were 347,000 ISK. I think I worked around 232 hours last month. I don’t understand how they are calculating the wages,’ says Nils Jansons.

Aldis Grīnbergs agrees.

‘We were promised that the wages would be much higher than what they paid. I don’t know how they paid for each hour. I can honestly say that I can’t even understand it. I could never send money home.’

Nils says he worked for the municipality of Garðabær, repairing schools, preschools, and housing for people with special needs.

In light of this, Kveikur sent an inquiry to the large municipalities in the capital area about how many employees from staffing agencies work on behalf of the municipality, and how their rights are ensured. Only one response was received in time, from Reykjavík City. It stated:

There is no specific oversight of the rights of that group working for contractors and coming through staffing agencies, and we do not have information on how many work for companies in projects for Reykjavík City through staffing agencies.

Living Without Wages

Aldis mentions an example of a colleague who had no money despite being employed.

‘He asked for an advance payment, but they didn’t want to give him anything in advance. He had nothing to eat, so he went to the store to steal at least something to eat.’

Representatives of ASÍ say such stories are all too common, where employees go without work for some period and therefore receive no wages from the staffing agency.

‘We had people who went to work once or twice in two weeks. What can you get paid for that? You just have to live without wages. If you don’t go to work, you don’t get anything. And that’s how this process works,’ says Roberts Golubeckis, one of the men ASÍ representatives spoke to in Riga.

Aldis says that where he worked, no one was happy.

‘On payday, everything went crazy. Everyone was unhappy about everything. Where’s my money? This and that is missing, and so forth. Why are they deducting this and that from my wages?’

And Nils says he has never actually experienced anything as bad in the labour market as in Iceland.

‘For the first time in my life, I was treated like a dog. For the first time. I was born in the Soviet Union, and I worked in Latvia in the 1990s. But for the first time, I felt like a dog without a home.’

Too Good to Be True

Kveikur has in its possession a message that a staffing agency sent to contractors recently. It states that a worker can be leased for 3,900 ISK per hour for regular hours and 4,900 ISK per hour for overtime. The minimum rate for regular hours is 2,482 ISK.

‘This example doesn’t hold up because it includes the minimum wage of the worker,’ says Saga.

‘But then all the wage-related fees still need to be added on, plus the wages of the staffing agency owner, the intermediary. So this doesn’t add up. And of course, we would like contractors or companies that receive such posts to think twice and not just take the cheapest offer just because it’s cheap.’

In the law on public procurement, there is a specific provision about liability. It states:

The main contractor shall ensure and be responsible for that all employees, whether they are his employees, subcontractors, or staffing agency workers, receive wages, working conditions, health and accident insurance, and other rights in accordance with applicable collective agreements and laws at any given time. The purchaser shall clarify the main contractor's responsibility in the tender documents.

Staff members of Hlíf in Hafnarfjörður have hardly managed to keep up with cases regarding wage claims against staffing agencies. Gundega says they are working on 34 such cases, but more individuals have approached the organization, so the actual number of cases is higher. The wage claims range from 200,000 to 300,000 ISK per person up to millions when all are accounted for, with the total wage claims made by ASÍ member organizations amounting to hundreds of millions of ISK each year.

‘Absolutely unacceptable’

This activity not only affects the workers themselves. It can impact the construction industry as a whole and those who purchase the service. Jón Sigurðsson, a contractor and chairman of the Master Builders’ Association, has serious concerns about the operations of staffing agencies.

‘This distorts all competition in our market. There is no respect for the certification of craftsmen, and craftsmen are not being offered jobs in these agencies,’ says Jón. Most, if not all, of the workers are unskilled, which affects the quality of the work.

‘I have seen examples of this where complaints have been made to me, and I have gone and inspected. There I learned that staffing agency workers were working, and the contractor responsible for the project followed up with nothing and sent no supervisors, doing nothing. And then they just claimed that this was a perfectly well-executed job. But in my opinion, this was absolutely unacceptable,’ says Jón.

Disposable labour

According to information from the Directorate of Labour, there are no fewer than 19 staffing agencies registered in the country. The total number of staff from these agencies in July was 584. The vast majority, 38%, were from Poland, followed by workers from Latvia and Lithuania.

Gundega says that trade unions have intervened with most staffing agencies in Iceland, some of them repeatedly, because of the treatment of their staff.

‘We also have information that often when a worker wants to quit, or is laid off, the employer wants them to move out of their accommodation immediately. That means the worker ends up on the street.’

And what do the staffing agencies say in response? Do they just claim that everything is fine with them?

‘Yes, my feeling is that, in our case, the employer doesn’t quite see where the problem lies,’ says Gundega.

‘If I delve a bit into what they are telling us, and maybe the messages these men often receive, as they have described to us, they feel like they are disposable. Disposable labour,’ Saga adds.

Received Money Sent from Home

Iceland is far from the only country Sandris has worked in - he has worked in Ireland, the UK, Belgium, the Netherlands, Germany, Sweden, and Norway, in addition to his home country of Latvia. However, he says he has never had so little to his name after working in Iceland.

‘Never before, where I have worked in Europe, has anyone had to send me money from home for my living expenses. Never.’

But now you have received money sent to Iceland?

‘Yes, they sent me money to Iceland.’

‘Only the Rats Were Missing’

It's not just the wages of these people that are not right. The accommodations offered to them are not always up to standard. Kveikur received a video that one employee from such an agency took of the accommodations of the workers in the capital area. The video clearly shows that the conditions are not remarkable, to put it mildly.

A video taken by a staffing agency worker of the agency's accommodations in the capital area.

The men that ASÍ spoke with in Latvia echoed this, saying that the accommodations were unacceptable.

‘The first place we were taken to was an absolute nightmare,’ says Egīls Baldonis. ‘It was a two- or three-story building, and there was also a basement in the house. The building was divided into two parts, in one part there were five rooms, and probably 8 or 10 people living there. This was not good housing. Only the rats were missing!’

And although the accommodations that Sandris and his colleagues are living in now are not great, he says they are luxurious compared to the first housing that the staffing agency provided him. In a video he shows us, the basement apartment he was first offered is both small and very dirty. However, four men lived there, all Latvians working for the same staffing agency.

A video that Sandris took of the basement apartment that the staffing agency first provided him.

Sandris was made to sleep on a mattress on the floor. On the first night he slept there, he found insects crawling on him. He shows us a picture as proof.

'I took this picture and sent it to the staffing agency. I asked what was going on, but I never got a response.'

Sandris says he found five such insects in a short time.

Were they on you?

'Yes, drinking my blood.'

Did it itch?

'Of course,' he says.

Kveikur sent the picture of the insect to the Natural History Institute, which confirmed that it was a bedbug that feeds entirely on blood it sucks from its victims.

Sandris ended up in better housing, and he says it's the best accommodation that the staffing agency offers its employees. Other workers live in much worse conditions, which he says are not fit for human habitation.

The police did not respond

Saga says that housing issues are a problem in themselves. Often, many people live together, sometimes from several countries.

'This is like a dormitory situation. There is a certain social isolation; you are sent back and forth, and you do not connect with the workplace you are at but mostly associate with your coworkers at the staffing agency. There's not much to it; you come home from work, and then there is often a lot of drinking and even drug use,' Saga says. Such conditions can create fertile ground for further exploitation by employers.

Gundega says she has seen such bad cases that she has been forced to call the police.

'I once had a man come to me who was in very poor condition. He had no housing. He was injured. I called the police, but they directed me to schedule an appointment that would take a couple of weeks to arrange, while the police would find time for a visit and an interpreter. They did not respond to this.'

Stealing food from stores

Kveikur has talked to many people from Eastern Europe who have suffered exploitation in the Icelandic labour market. Many of them initially agreed to be interviewed but then backed out. That alone says a lot about the power employers have over them and the fear these men carry in their hearts. And the desperation of some of them is absolute, as Sandris describes.

‘We know many who steal food from stores because they have no money for living expenses. We know these people.’

People who work for this staffing agency?

‘Yes.’

They go into stores and steal?

‘Yes.’

Warning against false promises in Iceland

Natalja Preisa, a lawyer for LBAS, the sister organization of ASÍ in Latvia, says that the information provided by ASÍ representatives about the treatment of Latvian workers in Iceland has been surprising, to say the least.

‘Surprise is not the word that describes this. Rather, it is shocking, as we understand that the situation has been developing for quite a few years. And we hear that this concerns such a large number of workers, more than twenty. That is significant.’

So you had no idea that workers from Latvia might be in labour exploitation in Iceland?

‘No, neither we nor the trade unions of construction workers. Before our colleagues in Iceland contacted us, we knew nothing about it.’

Natalja says that trade unions in Latvia feel compelled to respond to the news coming from Iceland.

‘We decided to warn workers in Latvia that such false promises were circulating, offering good work in Iceland that could actually lead to labour exploitation. So we intend at least to raise awareness among people so that they are prepared not to fall into such a trap.’

Not enough to just set laws

Authorities have repeatedly been alerted to this problem, yet little seems to change. GRETA, the Council of Europe’s monitoring body for the Convention against Trafficking in Human Beings, published its third report last year on the state of affairs in Iceland. The report expressed particular concern over the limited success Iceland has had in the fight against labour trafficking.

According to a response from the Ministry of Justice to Kveikur's inquiry this September, the recommendations in GRETA's report were deemed too broad and time-consuming. In February, a steering group within the government was established to address human trafficking. This group includes representatives from four ministries.

Work is currently underway within each ministry to analyse the recommendations and assess how best to respond to them and shape actions,

the Ministry of Justice stated.

However, despite this ongoing work, the nation's leaders have repeatedly stated in recent years that they intend to tackle these issues. Saga says that trade unions have become impatient for real action. It is not enough to set laws regarding staffing agencies; there also needs to be funding and manpower to enforce these laws within public institutions.

‘The staffing agency laws include provisions for fines, for example. They are rarely enforced. And it’s simply due to this that I’m saying there just aren’t enough people to work on this in the institutions. The same goes for the police. Historically, the police may not have paid much attention to these violations on the labour market.’

According to information from the Chief of Police in the Capital Region, both increased funding and additional personnel are needed for the police to address this issue, especially in light of the increasing number of reports. Only one indictment has been issued in such cases over the past five years.

If we had more police officers working on these cases, as well as prosecutors, we would have the opportunity to respond more quickly and follow up on cases more thoroughly, rather than having to prioritise as we currently must,

stated the response from the Chief of Police in the Capital Region to Kveikur's inquiry.

‘I believe that part of the reason there hasn't been a firmer response is perhaps rather obvious: those who are victims of exploitation and trafficking are generally not me and you; they are not native Icelanders, and they are not people from higher income levels. These are usually vulnerable people, often coming from some sort of difficult social or economic background, and perhaps people who do not have a very strong voice. I believe this is a significant part of the reason,’ says Saga.

Social Responsibility

Natalja, a lawyer with LBAS, says she is genuinely baffled that these issues have not been more firmly addressed in Iceland.

‘I believe that when signs of labour trafficking appear, involving so many workers, it should be investigated immediately as a priority so that Iceland remains a safe country for migrant workers, including those from Latvia.’

If something similar were to happen in Latvia, would the authorities take action immediately?

‘I want to believe that if the number were this high, the authorities here would take these issues seriously and that all parties involved would be dealt with promptly.’

Saga points out that it is quite clear where the responsibility lies.

‘I believe the responsibility lies primarily with the government to ensure that state institutions are equipped to deal with this. However, we also need to constantly consider social responsibility, whether it be from consumers or contractors when we talk about staffing agencies.’

Not Just Tools

Although Sandris has not had a good experience in Iceland, he says he holds no grudge against the country or its people.

‘This first experience of Iceland is extremely bad. I have not changed my opinion of Iceland; I like it. But I don’t know what will happen next. Because I have worked in eight European countries and have never experienced anything like this.’

Better Everywhere Else?
‘Yes.’

It thus seems quite clear that here in Iceland, the wheels of the economy, at least part of it, are kept turning by methods that can hardly be defined otherwise than as human rights violations. But what can be done? What needs to happen to stop this?

‘I believe we as a society must first acknowledge that this is happening here in Iceland,’ says Gundega.

‘And this is perhaps much more than we think. We all know that we need labour here in Iceland to do the work for us. We need this people. But we must not forget that this is not just some kind of tool that we import. These are people. We must care for these people and show them respect.’