Covid-19 (the corona virus) and Swedish employment law: New government proposals to support Swedish companies and protect jobs 

2020-03-16

Today, the Swedish government has put forward an emergency support package in response to the current public health crisis. The support package inter alia grants employers the possibility to temporarily lay off employees (sw. korttidspermittering). The Swedish Agency for Economic and Regional Growth (sw. Tillväxtverket) is charged with the task of administering the support package in this regard and has for this purpose received SEK 20 million from the government.

The proposal shares aspects of the previously announced short-term employment (Sw. korttidsarbete) proposal, but the amount of support has been expanded considerably. Under the proposal, an employee may be granted over 90% of their salary, while the employer’s staff costs can be reduced by half as the state will cover a larger proportion (up to 75% of the total staff costs). The aim is for the new system to address the competitive disadvantage which has existed for Swedish employers compared to the regulations in e.g., Norway and Denmark. Further, the aim is for affected companies to be able to retain their employees and make a fast recovery once the market stabilises. Additional measures in the proposal include that the state will cover all sick pay during April and May. Self-employed persons will also be entitled to claim a standardised sickness benefit for up to 14 days.

The proposal has been referred to the Council on Legislation for expedited review. The proposal is set to enter into force by 7 April 2020, but the measures regarding temporary layoffs can be applied from today (16 March 2020). The support is proposed to remain in place throughout 2020.

It is unclear exactly how the new temporary measures will function in practice, but The Swedish Agency for Economic and Regional Growth is currently working urgently with the Government Offices of Sweden (sw. Regeringskansliet) and the Swedish Tax Agency (sw. Skatteverket) in order to implement the measures as soon as possible.