Factsheet for measure
SE-2013-48/2709
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Updated
– measures in Sweden
Short-time work allowance
Korttidsarbete (korttidspermittering)
Background information
Support for short-time working (also known as short-time layoffs) is regulated in the Act (2013:948) on short-time working (Lag (2013:948) om stöd vid korttidsarbete). Short-time working means that employers can reduce their employees’ working hours and receive financial support from the central government to compensate for a significant part of the costs for retaining the employee.
This instrument was introduced in 2014, some years after the financial crisis in 2008. Under current legislation, support to short-time working is a temporary measurement in the sense that it can only be activated in a deep recession or if the risk for such is imminent. An additional requirement is that the activation of this support scheme does not impede structural change in the economy.
However, in March 2020 the government proposed changes to the Act on short-time working (2013:948) that would make it possible for companies facing significant and temporary financial challenges to apply for support even if this measure has not been activated due to COVID-19 pandemic.
The Swedish Agency for Economic and Regional Growth (Tillväxtverket) is the administering authority for the short-time working scheme.
Content of measure
The short-time working scheme was activated in April 2020 due to the Covid-19 pandemic for the first time. Individual employers facing serious financial difficulties that could not reasonably have been foreseen or avoided can now apply for financial support for a limited period.
Temporary amendments to the Act on short-time working (2013:948) that decrease the costs of the use of the short-time working scheme have been made. Under these temporary provisions, working time can be reduced by up to 60% (except for June and July 2020 when working time can be reduced up to 80%). In the currently applied scheme, 20-60% reduction in working hours decreases the costs of the employer by 19-53%. The state covers up to 45% of the costs (except for June and July 2020 when working time can be reduced up to 80% and the state covers up to 60% of the costs).
The application to receive support opened on 7 April 2020 but will be retroactively applied to as early as from 16 March. This temporary provision is in force until the end of 2020.
As part of the package of measures to mitigate the economic impact of the Covid-19 outbreak for companies, the Swedish government has also introduced a temporary reduction of employers’ social security contributions for the period 1 March to 30 June 2020. Employers were only obliged to pay the old-age pension contribution. This reduction applies to up to 30 employees and on that portion of the employee’s wage that does not exceed SEK 25,000 (approximately €2,400) per month. This entails tax relief of up to SEK 5,300 (approximately €500) per employee and month. The proposal’s cost to public finances is estimated to SEK 33 billion (approximately €3.3 million). This measure could be used by companies receiving short-term working allowance, new-start job subsidies and other types of financial support from the central government.
Updates
The following updates to this measure have been made after it came into effect.
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01 December 2021
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During the Covid-19 pandemic, the short-time working allowance scheme was open to all companies of the private sector who face temporary and severe economic difficulties. The final extended application date was in 30 November 2021 for the applications on the economic problems caused by the Covid-19 pandemic.
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Use of measure
According to the Swedish Agency for Economic and Regional Growth, they had received 74,700 applications by 15 June 2020. Two months later, in August 2020, the number of applications was 81,300.
In August 2020, the number of employees covered by this measure was approximately 570,000. The amount of financial support granted for companies by August 2020 was SEK 27 billion (approximately €2.6 billion).
The estimated financial support that will be paid out to companies during 2020 SEK 95 billion/ €9.5 billion.
Target groups
Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Consulted
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Consulted
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Form
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Direct consultation outside a formal body
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Direct consultation outside a formal body
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Peak or cross-sectoral level
Involvement
Employer's organisations and trade unions were invited to leave a statement before the parliamentary proceedings.
Views and reactions
The Swedish Confederation of Professional Employees (TCO), the Swedish Trade Union Confederation (LO) and the Confederation of Swedish Enterprise (Svenskt näringsliv) have argued for an extension of the short-time working scheme to full-time during the COVID-19 pandemic. Further, all of the Confederations argues that the Government's should have had reacted to the effects of COVID-19 pandemic quicker.
Sources
