Social Security
There is no overall legislation regarding employee benefits, but there are some statutory provisions that give the right to payment in certain specific areas. For example, the Annual Leave Act entitles employees to vacation pay, the Sick Pay Act prescribes the right to sick pay during periods of sickness and the Employment Protection Act entitles employees to salary and other employment benefits during the notice period. Furthermore, employers are obliged to pay social security tax on the employee’s salary and other employment benefits that, inter alia, include statutory pension contributions.
The employer’s social security contributions, paid in addition to the salary, amount to 31.42 percent (2020) of the employee’s gross salary. These contributions are mandatory and include specific charges, such as, old-age pension, survivor’s pension, fees for health insurance and work injury. The fees constitute parts of the Swedish social security system.
Healthcare and Insurances
Except for insurances included in the mandatory employer social security contribution, there is no obligation under the law for the employer to provide the employees with different insurances. However, employers that are bound by collective bargaining agreements are obliged to take out certain insurances, such as, group life insurance (TGL) or work injury insurance (TFA), in addition to the insurances included in the employer social security contributions.
Required Leave
Holidays and Annual Leave
Vacation entitlement is regulated by the Annual Leave Act, which distinguishes between unpaid and paid vacation, and between a “vacation year” (1 April to 31 March) and a “qualifying year” (the 12-month period prior to the vacation year). An employee earns his or her entitlement to paid vacation during the qualifying year and is entitled to use his or her paid vacation during the vacation year.
The basic vacation entitlement is 25 paid days per year. Collective bargaining agreements or employment agreements normally contain rules entitling employees to a longer period of annual leave, in particular for white-collar employees not entitled to overtime pay.
Employees are entitled to take a continuous four-week vacation during the period June to August, unless there are circumstances justifying other arrangements. Employees who have been given a notice of termination of less than six months cannot be required to take their vacation entitlement during the notice period, unless they agree to do so. Furthermore, it is possible for employees to carry over their entitlement to paid, but not unpaid, vacation days to the next vacation year, but only if the employee has earned more than 20 days of paid vacation, and only for those days that exceed 20 days. Deviations from certain regulations in the Annual Leave Act can be made by collective bargaining agreement.
Maternity and Paternity Leave
The employee may be on parental leave until the child is 18 months. Thereafter, the employee is entitled to leave for as long as he or she receives compensation from the state. In addition to the parental leave, the mother can start drawing parental allowance 60 days prior to the expected birth of the child. The father of the child may also be on paternity leave for 10 working days in connection with the child’s birth.
Compensation is paid by the state for a total of 480 days per child. The compensation may be paid until the child reaches the age of twelve years, but only 96 days may remain when the child reaches the age of four years. This entitlement of parental days is divided equally between the parents, but they have the right to transfer their entitlements to each other, with the exception of 90 days. These 90 days will be forfeited if they are not transferred to the other parent, hence, one parent may use a maximum of 390 days. For 390 days the allowance is capped at 80 percent of the employee’s salary, though, the allowance can be SEK 1,006 per day as a maximum (2020). For the remaining 90 days, the compensation is SEK 180 per day. If a collective bargaining agreement applies, the employee may be entitled to certain compensation from the employer in addition to the compensation from the state.
Sickness Leave
The employee is entitled to mandatory sick pay payable by the employer, provided that the employment is expected to continue for more than 1 month or if the employee has been working for more than 14 consecutive days. Sick pay is paid by the employer during days 1-14 at 80 percent of salary, but the employer is entitled to make a deduction (Sw. karensavdrag) of approx. 20 percent of the employee’s employment benefits during a week. If the employee suffers sickness again within 5 days, the previous sick leave period will continue.
As from day 15, the employee may be entitled to compensation payable by the state. The entitlement to such compensation is based on strict rules and is decided by the Swedish Social Insurance Agency. There is no obligation for the employer to provide any supplementary sick pay, unless a collective bargaining agreement is in place. If an employee can be assumed to be on full or partial leave due to sickness during a period of at least 60 days, the employee is entitled to a rehabilitation plan drafted in cooperation with the employer and including adaptive and rehabilitative measures which may facilitate the employee’s return to work.
Disability Leave
Disability leave is not recognised as being any different from sickness leave. However, a partial or full disability may entitle the disabled person to activity compensation or sickness compensation paid by the state.
Any Other Required or Typically Provided Leave(s)
Employees who have been employed during the preceding six months, or for a total of at least 12 months during the preceding two years, have the right to educational leave. Employees are also entitled to full leave from his or her work for, at most, six months in order to start a business. However, the business of the employee may not compete with the employer’s business, and the leave does not have to be granted by the employer if the leave would result in significant inconvenience for the operations of the employer. Additionally, there are several circumstances which entitle an employee to leave in special situations, such as to take care of a closely related person or to take Swedish-language education as an immigrant.
Pensions: Mandatory and Typically Provided
The Swedish pension system is based on an income-related pension, premium pension and guarantee pension. The pension system is administrated by the state and financed by employers and employees jointly. The employer’s contribution is paid through the employer’s social security contributions.
In addition to the state pension, the employees usually are entitled to supplementary pension provided by the employer, which, under a CBA, the employers are obliged to pay, and for those not bound by a CBA, such additional pension benefits are completely optional. The predominant pension scheme for white-collar employees in the private sector is the ITP pension plan, which is a supplementary pension plan. The plan includes old-age pension, supplementary old-age pension, disability pension and family pension. The employees belong to ITP-1 (a defined contribution plan) or ITP-2 (a defined benefit plan) depending on the employee’s age. For blue-collar employees the SAF-LO pension plan applies, which is a defined contribution plan.
Any Other Required or Typically Provided Benefits
There are no other required benefits, but it is common for employers to offer their employees a fitness benefit.
