European Foundation
for the Improvement of
Living and Working Conditions

The tripartite EU agency providing knowledge to assist
in the development of better social, employment and
work-related policies

COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case NO-2020-27/1206 Updated – measures in Norway

Wage support to re-employ previously laid off staff

Lønnsstøtte for å ta egne permitterte tilbake i jobb

Country Norway , applies nationwide
Time period Temporary, 01 July 2020 – 31 August 2021
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Active labour market policies, incl. subsidised job creation
Author Aasmund Arup Seip, FAFO and Eurofound
Case created 01 October 2020 (updated 19 October 2021)

Background information

The government proposed in June 2020 a new and temporary wage support scheme for companies that take their own laid off employees back to work. The aim of the proposal is to promote a faster returning to work, and the proposal imply that the company receives a cash subsidy per employee that is taken back from redundancy. The scheme applies to companies, non-profit organisations and foundations that have laid off employees as a result of the virus outbreak. A first round was introduced for July and August 2020 and a second round will cover October, November and December.

Content of measure

The government's wage support scheme will open for applications 1 October. Two rounds of wage support are introduced. First round of the scheme will apply to all employees who are taken back from redundancy at the beginning of July and August, provided that the employee was laid off from a company seeking support and is taken back in at least as high a position as before the layoff. People for whom support is sought cannot be laid off again during the support period, nor can the company lay off other employees during the period. The cash subsidy can be up to NOK 15,000 (€3,500) a month in support for each laid-off person who is taken back to work.

Round two was introduced 10 September, and will apply for October, November and December. The prerequisite for receiving support is that the employee was laid off as of 31 August 2020 and will be brought back to work at the beginning of the month for which support is provided. Total cost of round two is uncertain but is estimated to NOK 30 million (€7 million), taking effect in the 2021 budget.

Updates

The following updates to this measure have been made after it came into effect.

09 July 2021

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.

09 May 2021

A new wage support scheme has been established for the period 15 March to 31 August 2021. In the case a company has a fall in turnover of 70% or more, wage support of up to NOK 25,000 (€2,525) per month is granted per. employee who is taken back from leave. The fall in turnover is measured against the corresponding period in 2019, possibly against January / February 2020 for companies that were not established in 2019 or did not have turnover in the corresponding period in 2019. In the case of a lower fall in turnover, the support amount gradually decreases to NOK 10,000 (€1,010) for a fall in turnover of 15%. Employees who are taken back must have been fully or partially laid off both as of 5 March 2021 and either as of 15 November, 1, 15 or 31 December 2020 or 15 January 2021. In the new scheme, it is no longer a condition that the employee is not laid off again or that other employees cannot be laid off. The maximum limit for the number of days for which support is given (108 days) and the maximum amount of support per employer in total (€2.2 million) is kept unchanged.

Use of measure

By June 2020, over 54,000 companies had received support through one or both of the measures. During 2020, 60,803 companies received money. Most companies (14,000) are found in wholesale and retail trade (NACE G), followed by 6,000 companies in construction industry (NACE F). Accommodation and food service activities (NACE I) and Professional, scientific and technical activities (NACE M) each had 6,000 companies receiving support through the wage support measure and/or payment to laid off employees. (See statistics on business policy instruments at Government’s web site: regjeringen.no .)

Companies that have taken employees back from redundancy can apply for a subsidy to cover part of the wage costs. In 2020, NOK 198 million (€20 million) was allocated to 2932 recipients, and from Marsh to June 2021, NOK 42,6 million (€4,3 million) was allocated to 513 recipients. At the Norwegian Tax Administration’s web site , you will find updated statistics of the number of recipients and an overview of all companies that have been allocated money.

Target groups

Workers Businesses Citizens
Employees in standard employment
Unemployed
Applies to all businesses Does not apply to citizens

Actors and funding

Actors Funding
National government
Social partners jointly
Trade unions
Employers' organisations
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Direct consultation outside a formal body Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The government says the wage support scheme is a targeted and temporary measure based on assessment of various models. The government has received input from The Norwegian Confederation of Trade Unions (LO), the Confederation of Norwegian Enterprise (NHO) and an expert group.

Views and reactions

Wage support to get the laid off back to work has been a demand from The Norwegian Confederation of Trade Unions (LO) since early in the COVID-19 crisis. The measure has also been an important demand from the Confederation of Norwegian Enterprise (NHO), which has proposed that all completely unemployed people - laid off and others - after at least three months as unemployed, can be taken back to the company they are laid off from, or employed in any other private company, with a wage subsidy.

Sources

Citation

Eurofound (2020), Wage support to re-employ previously laid off staff, case NO-2020-27/1206 (measures in Norway), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.