This area is covered by Article 28 of the EEA Agreement, Annex V on the Free Movement of Workers and Annex VIII on the Right of Establishment.
The free movement of persons is one of the core freedoms of the European Internal Market. It gives a national of an EEA State the right to take up an activity in another Member State under the same conditions that are applied to the nationals of that Member State, without being discriminated against on the grounds of his or her nationality.
Nationals of an EEA State may circulate freely, settle and take up employment in an EEA State other than their own, remain there and enjoy the same rights as the nationals of that State when it comes to employment and work, with the exception of certain jobs in the public sector.
Following the enlargement of the EEA in 2007, the three EEA EFTA States have introduced transitional arrangements that restrict the free movement of workers from Bulgaria and Romania. These transitional arrangements cannot extend beyond an absolute maximum of seven years after their accession to the EU, i.e. 31 December 2013.
See also:
The European Commission's Directorate-General for Employment, Social Affairs and Equal Opportunities: Free movement of workers
The European Commission's Directorate-General for Justice, Freedom and Security: Right to move and reside freely within Europe