Nora
Accounting Consultant

Short-term Layoff

Below is important information regarding short-term layoffs. Authorities have continuously updated us with new information. Many of you are wondering what to do with salaries and other support, below I summarize the most important points (remember that more information is coming daily from authorities).

Short-term Layoff

– This means that the employee reduces working hours for a maximum of 6 months (can be extended by 3 more months).

– You MUST adhere to one of the 3 (4 during a certain period in 2020) levels shown in the table below:

Image source: Tillväxtverket
*Level 4, 80 percent reduction in working hours, can only be applied for May, June, and July 2020. The level is adjusted at the reconciliation.

– If the employer has a collective agreement regulating short-term layoffs, it can be applied. If not, at least 70% of all employees must approve it. A new employment contract must then be signed.

– The employee must have worked for at least 3 months to receive compensation.

– Not all employees need to reduce their working hours equally; one can reduce by 60% and another by 20%.

– The company MUST NOT be insolvent, under reconstruction, or obliged to prepare a balance sheet for liquidation purposes.

– REQUIREMENT: demonstrate financial difficulties due to the coronavirus.

– Can be applied from April 7. Applies retroactively from March 16, 2020.

– Before implementing short-term layoffs, you must have tried other methods, such as laying off non-essential staff, terminating probationary employment, reducing working hours for hourly employees, etc.

– The maximum salary cap is 44,000 SEK.

The support applies to employers who are legal entities or individuals conducting business activities and are registered in Sweden.

The support does not apply to:

  • The state, regions, municipalities, and municipal associations.
  • Limited companies, partnerships, associations, and foundations over which the state, regions, municipalities, and municipal associations have legal controlling influence, unless the activity concerns business operations.

Calculation example 1:

The employer and employee agree on a 60% reduction in working hours. We then apply Level 3 in the table above.

The employee Rikard has a regular salary of 30,000 SEK per month, assuming Rikard does not take vacation. Rikard will now work 40% as he has reduced working hours by 60%. The preliminary support the employer receives for Rikard is: 30,000 SEK x 60% x 98.6% = 17,748 SEK

Rikard receives in his payslip:

30,000 SEK – 7.5% = 27,750 SEK (which corresponds to 92.5% of the salary)

 

Calculation example 2:

The employer and employee agree on a 20% reduction in working hours. We then apply Level 1 in the table above.

The employee Adam has a regular salary of 24,000 SEK per month, assuming Adam does not take vacation. Adam will now work 80% as he has reduced working hours by 20%.

The preliminary support the employer receives for Adam is: 24,000 SEK x 20% x 98.6% = 4,733 SEK

Adam receives in his payslip:

24,000 SEK – 4% = 23,040 SEK (which corresponds to 96% of the salary)

 

SOURCE: www.tillvaxtverket.se and www.regeringen.se