Sweden: New proposal recommends additional support for employers struggling with financial difficulties caused by the coronavirus
Recent regulatory changes to the Swedish Act (2013:948) on Short-time Work Allowance has made it possible for employers to apply for state funded financial support, when applying short time working arrangements, as alternatives to dismissals that would otherwise be necessary due to the financial difficulties caused by the coronavirus pandemic. A short time working arrangement means that the employer and employee enter into an agreement to temporarily reduce the employee’s working hours by up to 60 percent and salary by up to 7.5 percent. When applying such arrangements, the employer may receive financial support corresponding up to approximately 50 percent of the total salary cost for an employee with a gross monthly salary of up to SEK 44,000. A new proposal has been issued by the Government to allow greater reductions and to offer additional financial support during May-July 2020. The proposal suggests that it should be possible to temporarily reduce an employee’s working hours by up to 80 percent and salary by up to 12 percent. It is further suggested that the financial support should correspond to approximately 70 percent of the total salary cost for an employee with a gross monthly salary of up to SEK 44,000 when applying the new level of reduction.
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