Temporary amendment to the regulation of layoffs

On 8 and 14 December 2021, the government announced that it would extend the temporary right to extension of unemployment benefits for the unemployed. The period of exemption from wage obligation during redundancy is extended so that the laid-off retains the unemployment benefits in the event of redundancy beyond 1 January. Increased unemployment benefit rate of 80% compensation for the part of the unemployment benefit that is less than 3 times the basic amount. Part time lay-off can be applied if the employee work 40% or less (changed from 50%).

The government also announced that it would reduce requirements for previous income as an entry condition for unemployment benefits to 0.75 G (€8,000) last 12 months or 2.25 G (€24,000) last 36 months, implemented as soon as possible and lasting until 28 February 2022. This will benefit laid off low income and part time workers.

These proposals require a decision in the parliament. The government will present a proposition to the Storting in January 2022.

When the redundancy scheme and temporary unemployment benefit rules was extended one month in September 2021, there was a disagreement between the social partners central organisations. While the Norwegian Confederation of Trade Unions (LO) and the employer’s association Virke (The Federation of Norwegian Enterprise) supported the extension of the temporary regulation, the Confederation of Norwegian Enterprise (NHO) did not. NHO argued that short lay-offs were useful, but that lay-offs in longer periods of time will create a "lock-in" in that labour needed elsewhere remains in companies where they do not work part of the time. This can inhibit restructuring and freeze business structures.

The redundancy scheme and temporary unemployment benefit rules have been extended one month until 1 November 2021. The extension of the temporary regulation comprises:

• Continuation of a temporarily increased unemployment benefit rate, so that the unemployment benefit is calculated at 80% of the basis up to three times the basic amount (approximately €32,300) and 62,4% above (up to €64,600).
• Extension of the unemployment benefit period to 1 November for unemployment benefit recipients who would otherwise have used up the maximum unemployment benefit period in the period from 1 to 31 October 2021.
• Continuation of the rules on grading unemployment benefits so that someone who receives unemployment benefits can work 60% of previous working hours without losing unemployment benefits (against the previous 50%).

The decision by the government to extend the scheme one month came after a period with political pressure. The Norwegian Confederation of Trade Unions (LO) and The Federation of Norwegian Enterprise, Virke, demanded prolongation. The Labour Party (Arbeiderpartiet) and the left-wing Red Party threatened to urgently convene the parliament, Stortinget, before the opening of the new convention, and force the government to extend the redundancy scheme. The government changed its view after a long meeting with LO, Virke and Confederation of Norwegian Enterprise (NHO), 8 September 2021, and extend the redundancy scheme by one month, until 1 November. This would give time for a new Storting to consider the situation.

The government found several disadvantages with the extension. In September, unemployment was declining quickly, and the government considered the prospect of the Norwegian economy much better. Confederation of Norwegian Enterprise (NHO) agreed with the government and was against an extension at this point of time. However, both the unions and Virke wanted extension. Virke organise many small and medium enterprises in trade, travel, and other service industries, still struggling economically after the COVID-19 pandemic.

The two crisis measures, wage support to companies that take back laid off employees (Case NO-2020-27/1206 ) and payments to laid offs through extended periods (Case NO-2020-13/723 ), are administered by The Norwegian Labour and Welfare Administration (NAV) and directed toward the labour market.

In an amendment to the Basic Agreement, Confederation of Norwegian Enterprise (NHO) and the Norwegian Confederation of Trade Unions (LO) have agreed to temporarily adjust the period laid offs can come back to work before the employer has to pay wages in a new ten-day employer period if the employee is laid off again. This period of interruption in the lay off is temporarily extended from six to ten weeks during a period lasting until September 2021. Before the parties entered into the agreement, the government assured the parties that an extension of the period would not affect the employee’s right to unemployment benefits in new redundancy rounds. The agreement was made specifically with a view to the food and beverage service industry which constantly was facing threats of closure.

Temporarily scheme for holiday pay from unemployment benefit.

18 February 2021, the Storting asked the government to introduce a temporary right to holiday pay for unemployment benefit recipients for payment in the summer of 2021 and 2022. Under current regulation, an unemployment benefit recipient will not be regarded a real job seeker if the recipient takes a holiday form the job search and will not be entitled to benefits. On request from the Storing, the government proposed in the end of March to introduce a temporary scheme linked to the corona situation, as a hand to those unemployed that would be without any benefit during holiday 2021 and 2022.

The government proposes to temporarily relax the entry requirements for unemployment benefits. From 19 February 2021 (Regulation FOR-2021-02-19-473), the minimum income limit for entitlement to unemployment benefits is lowered from 1.5G (€14,892) to 0.75G (€7,445) in the last 12 months or 2.25G (€22,338) in the last 36 months. This applies to both the laid off and the unemployed. In addition, the requirement that the benefiter must be laid off at least 50% of previous working hours is lowered to 40%. Hence, the right to unemployment benefit will not disappear before a laid-off person works more than 60% of previous working hours. The same special rules also applied for a period in 2020 but were discontinued on 1 November 2020 because there was an improvement in the labour market. They are now being reintroduced for a period up to and including 30 June 2021.

Unemployment benefit extended to September 2021.

The government propose that those who have left the unemployment benefit scheme after 1 November 2020 can apply to re-enter it from 1 February. This will give several unemployed and laid-off people that have lost their right to unemployment benefits because they have reached their maximum period, an opportunity to apply for unemployment benefits again for a limited period. The period between 1 November 2020 and 31 January 2021 is not covered.

Those who reach the maximum period of unemployment benefits between 1 February and 30 September 2021 will have the maximum period extended to 30 September 2021. For others who are starting their unemployment benefit periods now, the usual rules for duration apply.

On 11 January, the government proposed to extend the redundancy period to 1 July 2021. This decision came after pressure from the Norwegian Confederation of Trade Unions (LO) and the political opposition.

From 1 November, the redundancy period was extended from 26 to 52 weeks. In addition, an employer period II of five days was introduced, taking effect after 30 weeks of redundancy from 1 March 2021. To get unemployment benefits you must be laid off at least 50% of your regular working time. (In the period from 20 March to 31 October 2020 you could be granted unemployment benefits when you were 40% laid off.) As of 1 November 2020, the requirement for earned income was raised from 0.75G (20 Mars to 31 October) back to 1.5G (approx. €714,732) in the last 12 months, or 3G in the last 36 months. The increased rate of unemployment benefits will be extended until 31 March 2021.

The 23 June 2020, the parliament adopted amendments to the Lay-off Wages Act (repeal of temporary employer period introduced as a result of the outbreak of COVID-19). The period the employer has an obligation to pay for wages at the start of a new layoff is increased from 2 to 10 days from 1 September 2020. The government argues that it will be unfortunate if the cost of laying off is so low that unnecessarily many are laid off.