Report Cites Higher Public Sector Absenteeism due to Sick Leave

2026-02-19 - 10:44

A new report by the Icelandic Chamber of Commerce has urged that sick leave entitlements for public sector employees be aligned with those in the private sector, citing higher absence rates and associated costs. Drawing on figures from Statistics Iceland, the Chamber states that absence due to illness in the public sector is twice as common as in the wider labour market. What's the Story? Report by the Icelandic Chamber of Commerce using data from Statistics Iceland Public sector sick leave averages 16 days per employee; 6% of paid hours, compared with 8 days and 3.1% in the private sector Estimated additional direct annual cost of ISK 19 billion to public finances, including ISK 4.5 billion for the City of Reykjavík Harpa Concert Hall and Hallgrímskirkja Church in Reykjavík. Photo: Golli. Iceland Review. Report highlights disparity As reported by RÚV, around 6% of paid working hours among public employees are attributed to sick leave, compared with 3.1% in the private sector. The average number of sick days is reported as sixteen in the public sector and eight in the private sector. The report estimates that additional direct annual costs to public finances amount to ISK 19 billion, including ISK 4.5 billion for the City of Reykjavík. Indirect costs, such as operational disruption and overtime, are not included in that figure. After six months of employment, public sector staff are entitled to 119 days of sick leave, compared with significantly fewer days in the private sector. “The excesses are therefore not only costly in monetary terms, but they can also undermine the quality of public services. The overall impact is therefore greater than the above amount indicates.” The Chamber argues that the current disparity is inconsistent with equality principles and proposes bringing public sector entitlements into line with the private sector.