The Directorate of Labour puts the national average unemployment rate at 6%. For immigrants, the figure is closer to 12%. When focus shifts, as it naturally does in a troubled economy, from creating jobs to saving jobs, legal loopholes – and in some cases, illegal practices – that exclude or exploit foreigners begin to increase.

A French woman, who we’ll call Marie, has plenty of first- and secondhand knowledge of how the crisis has been affecting her, her friends, and her family. In many ways, she’s typical of the kind of young, European globetrotter who falls in love with off-the-beaten-path places like Iceland – she was taken by the natural beauty, would lend CDs of Icelandic bands such as múm to her friends, and looked forward to moving to Iceland. She arrived some years ago, taking up one of the easier jobs a European national can get in Iceland – working in an after-school centre.

“I put a lot of effort into that job,” she says. “I really wanted to prove myself, but most of all, it was just a job I loved doing.”

As her time in Iceland wore on, she began encouraging her cousin to relocate as well. And why not? The jobs were plentiful, any foreigner could find work, and you didn’t even need to know the language right away – you could learn it as you work. And so her cousin arrived in Iceland, just weeks before the nation’s banks collapsed. That was, of course, to change everything.

“Before the crisis, they needed us,” she says. “And now, everything’s reversed. It used to be, it was always easy for a foreigner to get any kind of low-paying job, but extremely difficult to find an apartment for rent, especially downtown [Reykjavík]. Now it’s the opposite – there are plenty of places for rent, but there’s not work anywhere.”

Marie talks about one aspect of the situation that many foreigners might be familiar with: language requirements for work.

Typically, the entry level jobs that most foreigners will work when they first arrive in Iceland – nursing homes, restaurants, custodial work, support work for the disabled – don’t require high proficiency in Icelandic. This, apparently, has changed.

“I started noticing [language requirements] increasing around the beginning of December. More and more, you’ll see jobs for places like working in a restaurant,” says Marie. “You know, working food prep, cutting onions – the ads for these jobs were saying ‘must have Icelandic as a mother tongue.’ It really surprised me. I’ve been visiting and living in Iceland for ten years now, and this is the first time I’m seeing such a strict requirement for a job as basic as this.”

The requirement is more than strict, of course – “mother tongue” specifically denotes an Icelander; someone either born in Iceland or to Icelandic parents. As a member of the European Economic Area, Iceland is legally obligated to grant EU citizens labour rights comparable to those of Icelanders. The mother tongue requirement would seem to be in contradiction with international law. But Iceland has no law prohibiting job discrimination based on nationality. Also, employers have every right to set standards with regards to language proficiency in their workplace.

One such place, the restaurant Sjávarkjallarinn, had an advertisement on. the news website visir.is which specifically asked for applicants to have “Icelandic as a mother tongue”. Upon calling the main offices of Foodco, the company that owns Sjávarkjallarinn, to ask what the difference was between someone who speaks Icelandic fluently – or even perfectly – and someone who speaks Icelandic as a mother language, we spoke with Hervik Syen, who explained the rationale behind the wording of the advertisement:

“The unfortunate fact is that when we’ve advertised for people who were very good or fluent in Icelandic, we received applicants who were actually not so good at Icelandic,” he explains. “And so we decided to make the language of the advertisement a bit more demanding, in order to get applicants who spoke the language better.” Hervik emphasised that Foodco restaurants employ many foreigners, some of them in positions of management, and that Foodco does not discriminate on the basis of nationality. “But I can see how the advertisement would be confusing,” he added.

“To me, an ad like this says they’re looking for people with Icelandic blood,” says Marie. “If you did something like this in France, you’d end up in court.”

Marie’s cousin continued to have difficulty finding work. As an EU citizen, she’s entitled to be in Iceland for up to 90 days before she needs to either get hired, or leave. Then came the e-mail with a job offer.

“We were pretty excited,” says Marie. “And I was happy that even in this economic crisis, she was able to find work.”

Marie’s cousin was told she would undergo a training period. During this time, which lasted all of four hours, she did housecleaning. Her supervisor was not present, and no one gave her any orientation. At the end of the four hours, she was paid 5,000 ISK in cash and told that she would be called if needed again.

“My cousin doesn’t know her legal rights,” says Marie, describing a situation familiar to many newcomers to Iceland. “She thought being paid cash was odd, but she didn’t know it was illegal. She needs to work, of course, to live. But working like this is very risky.”

And that’s the quandary. Being paid in cash by an employer for your work, with no receipts, no contract, and no registration of any kind (known in Iceland as “black work”), is illegal for both the employer and the employee to engage in. But while an employer who engages in the practices might be fined, a foreign employee will, in all likelihood, be deported, and possibly barred from re-entry. As Iceland’s economic crisis continues, employers will be seeking to cut overhead any way they can. And foreigners, who are twice as likely to lose their jobs as Icelanders, are more willing to risk deportation to stay in Iceland.

“I have a life here,” says Marie. “I’ve invested nine years of my life in Iceland. But the message I keep getting is: I’m never going to be an Icelander.”