As an employer, ensuring a well-functioning competence provision can be crucial for your competitiveness. However, finding the right skills can be challenging. At the same time, there is a shared ambition among labor market parties and the government to find new pathways into the labor market for those furthest from it. This, combined with companies' needs to recruit, has resulted in the new labour market entry agreement that came into effect on January 1, 2024.
What does the labour market entry agreement entail?
The labour market entry agreement is a new form of subsidized employment where the employer and the state share the salary costs of the employee. The employer pays a portion as salary, and the Swedish Social Insurance Agency (Försäkringskassan) reimburses the remaining amount up to the minimum wage stipulated in the industry's collective agreement.
The support is designed to be as administratively simple as possible for the employer to make it attractive, and there are high hopes from both employer and employee organizations that have negotiated the new form of employment that companies will take advantage of it.
Who can benefit from the support?
However, this support can only be utilized by companies with a collective agreement in which the parties have agreed to introduce the employment form associated with the support. The establishment employment is a temporary full-time employment lasting up to two years. The Employment Protection Act (LAS) §5 and collectively agreed employment forms do not apply to employees with labour market entry agreement, and the employment does not automatically convert to a permanent position. However, when an employer hires a person with labour market entry agreement, the intention should be for the employment to transition to a permanent position.
There are certain conditions that need to be met to utilize the new employment form, and it's important to be aware of these. For example, the employer must not be subject to a business prohibition, tax or fee debts with the Swedish Enforcement Authority (Kronofogden), or have laid off staff due to lack of work in the past 12 months (within the operational unit the employee would work in). It is also important to consider the processing times of the Swedish Social Insurance Agency when applying for labour market entry agreement.
Interested in learning more?
Then there is more information available from your employer organization, the Swedish Public Employment Service (Arbetsförmedlingen), the Swedish Social Insurance Agency (Försäkringskassan), or why not contact your payroll partner for advice?
Have you already started employing individuals with labour market entry agreement?
Keep in mind that it's important for the payroll department to have the right conditions to get things right from the first salary, so always share updated collective agreements and local agreements with them. As this is a new form of employment, both system adjustments and instructions may be necessary.
At the Swedish Public Employment Service, you can apply for and get help with matching skills and available financial support: Etableringsjobb - Arbetsförmedlingen (arbetsformedlingen.se)
Do you have questions about the rules of the labour market entry agreement? Contact us at Azets. We are experts in payroll administration, accounting, and HR, and offer advice to companies.
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