New rules on short-time work

Yesterday, the Swedish government presented a new proposal for rules on short-time work with financial support from the state. The proposal allows for the employer’s salary costs to be reduced by half, while the employee receives more than 90 percent of his or her salary. The new regulations will enter into force on 7 April, but will have retroactive effect from 16 March.

The purpose of the new rules is to support employment and curb unemployment in particularly deep economic downturns or like in the situation at hand, that could have not been foreseen, by reducing employees’ working hours and wages. The cost is shared between the government, the employer and the employees – and the proposal means that the employer’s salary costs may be reduced by half while the employee receives more than 90 percent of the salary.

In order to qualify for preliminary support, the employee’s working hours must be reduced by 20, 40 or 60 percent of the regular working hours. The cost allocation for the reduction in working hours follows from the table below, which applies throughout 2020. Thereafter, other levels will apply.

The above applies for a maximum salary of SEK 44,000 per month.

 

Employers who are bound by collective bargaining agreements

In order for employers who are bound by a collective bargaining agreement to be eligible for support, there must also be an applicable collective bargaining agreement on short-term work. There should also be a local agreement in which the detailed conditions for the application of short-term work have been established.

Employers who are not bound by collective bargaining agreements

Employers who are not bound by collective bargaining agreements can apply for support provided that there is a written agreement between the employer and each of the employees affected by the short-term work. Additionally, at least 70 percent of the employees at the operating unit are required to participate in the short-term work during the period covered by the support.

How to proceed?

1. For employers who are bound by collective bargaining agreements => check if you are covered by collective bargaining agreements on short-term work.
   For employers who are not bound by collective bargaining agreements => draft and enter into written agreements with at least 70 percent of the employees at the relevant operating unit.

2. Submit the application for support to the Swedish Agency for Economic and Regional Growth (Sw. Tillväxtverket). The Swedish Agency for Economic and Regional Growth examines the application against the conditions laid down for the support. If necessary, the agency may request information supplementing the application. The application can be submitted at the same time as steps according to step 1 are taken.
3. Once the application has been approved by the Swedish Agency for Economic and Regional Growth, an application for preliminary support may be submitted to the Swedish Tax Agency. If the requirement for receiving the support is met, the support is then paid as credit in the employer’s tax account.
4. An employer who has received preliminary support is required to make a reconciliation with the Swedish Tax Agency, which involves a comparison and assessment of whether the average working hours and salary reductions applied are in accordance with the specified levels in the law and the agreements concluded. An obligation to repayment may arise if the employer has received too much preliminary support.

According to the Swedish government, the new rules will come into force on 7 April, but will be applied retroactively as of 16 March 2020.

Paula Hogéus, Johan Wijk and Gabriella Sköld

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