In 2020, many Swedish companies have taken advantage of various support programmes to counter the negative economic impact of the coronavirus pandemic. As 2021 approaches, many employers are wondering which of these programmes will remain in place. Here’s a status update.
During the year, short-time working has been introduced at many workplaces, and even companies that haven’t needed to call on this programme have been able to take advantage of measures such as reduced social security contributions and having their sick pay expenses covered. Looking towards 2021, few of the measures available in 2020 will remain in place, at least not in the form we’ve seen so far. The budget bill that the government put to parliament appears to contain some initiatives targeted specifically at employers.
In 2021, the emphasis will be on skills development and labour-market training initiatives. In order to take advantage of this support, employers will need to have short-time working arrangements in place at the workplace. Employees can then develop their skills during the periods they are not at work and while short-time working support is being paid. Although the exact support ceiling amount per individual has not yet been communicated, the support is assumed to be 60 percent of the cost of skills-development initiatives. Since this support will come into effect from the new year and a prerequisite is that short-time working arrangements are in place, it expresses a clear expectation that many workplaces will continue to apply short-time working arrangements beyond 2020.
Special rules for short-time working have applied during 2020. Unless something different is communicated, the rules should return to their pre-crisis form. However, the government has yet to explicitly state this. For example, the website of the Swedish Agency for Economic and Regional Growth states that the special rules and conditions for short-time working that applied during 2020 may change as of 1 January 2021. One amendment to the ordinary rules on short-time working means that the state will no longer bear an equal share of the cost; the state share will reduce from three-quarters to one-third. This means that the remuneration level of 98.6 percent will change to around 43 percent of the base amount.
This salary reduction for employees would therefore be much larger than what we saw during this year’s furloughing of staff. In practical terms, this would also mean that new agreements regarding short-time working will need to be concluded between labour-market partners.
The tables below show how the changes affect the various parties who share the costs of short-time working.
Further changes include certain groups that were eligible for support in 2020 no longer being covered by the short-time working scheme from the new year. This concerns businesses primarily financed through public funds, dismissed staff, and employees who are members of the employer’s family.
Sick pay expenses and sickness insurance
Under the current decision, measures relating to sickness insurance have been extended until 31 December 2020. This applies to compensation for employees for deductions during the qualifying period, compensation to sole traders for the first 14 days of the qualifying period, compensation to employers for the portion of their sick pay expenses in addition to their normal sick pay expenses, and the deferral of medical certificates from the eighth day to the fifteenth day of sickness. The decision includes the possibility of temporary parental leave benefits in the event of school closures. However, the government has stated that SEK 3.9 billion has been set aside for these measures in 2020 and a further SEK 4.6 billion for 2021, which suggests that the support programmes may be extended, although it is unclear if they will remain in their present form.
Unemployment benefit fund
Many people in Sweden have lost their jobs this year, and many more have been told that their jobs are at risk. The levels of the unemployment benefit fund have been increased in connection with the coronavirus pandemic, and this increase is proposed to remain until the end of 2022. The relaxation in qualification requirements is also proposed to remain in place so that more people can take advantage of this support. There is also an aim to reform unemployment insurance by 2023.
Regardless of how your company has been affected during the coronavirus crisis, it’s a good idea to stay up to date on changes to the law, support packages, and government initiatives. If you feel you need support on these issues, Azets can help.