A very special year is now drawing to a close and society has faced many challenges. 2021 is approaching and the new year will bring many changes in the areas of payroll and HR. Below we have brought together changes we will see in 2021 that may affect many of Sweden’s employers.
Many elements of the support packages put in place by the Swedish government due to the coronavirus will expire at the year-end, while others will continue but in a different form. The support for short-time working has been perceived as a lifeline for many employers and the government has now announced that the support will be extended into 2021, but with some changes. Read more about this here.
As of January 2021, employers will also be able to apply for support for skills development for employees who are working fewer hours. The exact design of the scheme has not been decided, but there has been talk of the state providing support for up to 60% of the costs, up to a maximum amount per employee for skills initiatives primarily carried out during working hours. There may also be openings for support for skills development in employees’ own time.
As regards support for higher sick leave costs resulting from the coronavirus, there has not yet been any announcement that such support will continue to apply in 2021; instead the support is due to expire at the year-end. The same also applies for the rules on:
- The qualifying period deduction – the remuneration that an individual can receive from the Swedish Social Insurance Agency (Försäkringskassan) to cover the qualifying period deduction made by the employer from their salary due to sick leave.
- Medical certificates – the temporary abolition of the requirement for a medical certificate from day 8 to be eligible for sick pay.
- Temporary parental benefit – the possibility of temporary parental benefit if a preschool or school closes due to the coronavirus. However, the support for preventive temporary parental benefit, i.e. support for parents who need to be at home with children who have underlying illnesses which mean they need special protection so as not to catch the coronavirus, will continue up until 31 March 2021.
Employer social security contributions
Employer social security contributions for young people aged 15 to 18 have already been reduced for the first SEK 25,000 of salary, as only the old-age pension contribution of 10.21% is paid on that SEK 25,000. It is now also proposed that the social security contributions for employees aged 19 to 23 also be temporarily reduced. If the proposal is passed, the time-limited change will apply from 1 April 2021 to 31 March 2023, when employer contributions of 19.73% will be paid on the first SEK 25,000 of salary per month for these employees.
A series of changes are expected in 2021 concerning car benefits. Some decisions have already been made while other proposals are still pending a decision. The government has presented changes to the regulations in order to emphasise the environmental perspective as well as to reduce the financial benefits of company cars in relation to salary and other types of benefits. As a result, it may be a good idea for employers to review their car policy to encourage environmentally friendly options that still seem be more favourable and also ensure control over total costs. Read more about car benefits here
Further changes in the area of benefits:
- Free parking at the workplace – for part of 2020, parking at the workplace has been a tax-free benefit, but from the new year it will once again be a taxable benefit for employees.
- Food benefit – up until 2021, the Swedish Tax Agency has published new amounts for the benefit values relating to free food. From 2021, however, it will be up to the employer to calculate the amounts. The benefit value for completely free food will be 0.52% of the current price base amount. The valuation of individual free meals is made on the basis of the calculated amount and then equates to 20% or 40% of this amount depending on whether it is breakfast, lunch or dinner the employer is paying for.
- Fitness benefits – more and more activities are now included on the Swedish Tax Agency’s list of tax-free fitness activities. The list has been updated several times recently and training apps can already be used within the framework of the tax-free fitness benefit. Horse riding and individual entry fees, for example, have now also been added.
Sweden’s Employment Protection Act
It has probably escaped few employers’ attention that there has been an inquiry into Sweden’s Employment Protection Act. The inquiry is part of a 73-point programme called “A more modern labour law”. The task of the inquiry was to prepare statutory proposals with the aim of modernising labour law and including a review of the priority rules, responsibility for skills development, the predictability of costs when terminating employment and the balance of employment protection for employees with different employment conditions.
Labour market social partners the Council for Negotiation and Cooperation and the Confederation of Swedish Enterprise, however, reached an agreement after the Swedish Trade Union Confederation left the negotiations, and the government decided to back this agreement instead of the proposals from the inquiry. As a result, the agreement between the social partners will probably form the basis for future circulation for comment unless a new inquiry is initiated. Read more about the inquiry into Sweden’s Employment Protection Act here
The Swedish Work Environment Authority’s Statute Book (AFS) is a collection of provisions, and two provisions that have been reviewed and circulated for comment relate to the design of the workplace and to work adaptation and rehabilitation.
- In June 2020 the provisions on the design of the workplace (AFS 2020:1) were decided and they will come into effect on 1 January 2021. The provisions apply to the design of workplaces and deal with, for example, advice and requirements on ventilation, indoor climate, lighting and staff areas.
- In December 2020, the provisions on work adaptation (AFS 2020:5) were agreed and they will come into effect on 1 June 2021. The provisions on work adaptation are directed at all employers with employees who carry out work on behalf of the employer in cases where there is a need to adapt work, even though measures have already been taken relating to the general work environment. In other words, the provisions address the need to adapt the work environment for individual employees.
Navigating all of the Swedish Work Environment Authority’s provisions may be perceived as difficult, and work is in progress to introduce a new regulatory structure to simplify, clarify and create better conditions for its target groups to strive for a safe and healthy work environment. The new regulatory structure is not expected to be up and running until 2023, and it is hoped that the new structure will make it easier to see how the rules are connected and increase the clarity with regard to which rules apply to whom.
Further changes in the area
A number of other rules will also come into effect in the new year that will have a major impact on some companies. For example, on 4 November 2020, the Swedish parliament decided to approve the government proposal to introduce an economic employer concept. This will affect companies that take on or hire non-Swedish labour and also places stricter demands on non-Swedish employers. A couple of other areas where we will see changes are the extension of tax relief for experts from three to five years, which may make it easier for Swedish companies to attract experts, key employees and researchers, and the extended R&D deduction for research and development.
Azets is ready to face the new year with you
Many changes lie ahead in the coming year. Azets are experts when it comes to payroll, HR and accounting. Please get in touch if you need help or advice.