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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 SE-2020-12/564 Updated – measures in Sweden

Short-time work allowance

Korttidsarbete (korttidspermittering)

Country Sweden , applies nationwide
Time period Temporary, 16 March 2020 – 30 September 2021
Type Legislations or other statutory regulations
Category Employment protection and retention
– Income support for people in employment (e.g. short-time work)
Author Anna-Karin Gustafsson (Oxford Research) and Eurofound
Case created 13 April 2020 (updated 28 September 2021)
Related ERM support instrument

Background information

Starting 7 April, it will be possible for employers to apply for financial support for short-time work. This means that individual employers affected by temporary and serious financial difficulties that could not reasonably have been foreseen or avoided will be able to receive support for a limited period of time. The aim of the measure is thus to dampen the effect of the ongoing health crisis and save jobs by easing the financial burden of wage costs for companies experiencing difficulties.

Short-time work (also known as short-time layoffs) is regulated in the Act (2013:948) on short-time work (Lag (2013:948) om stöd vid korttidsarbete).

Content of measure

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 measure covers only the private sector. This measure is not available for sole traders.

Working-time can be reduced by up to 80%. The support is intended to correspond to 72% of the employer’s costs after the reduced working hours. The maximum salary for the support is SEK 44,000 a month (€4,400) and an employer can receive support for six calendar months, with the possibility of extension for another three months. The support goes to the employer, not to the employee. The application for the employer’s opened in April 2020 and is open throughout 2020.

Employers wishing introduce short-time work must first ensure that they have the possibility for short-time working in their central and local collective bargaining agreement. Employers whose employees are not covered by a collective bargaining agreement must instead sign an agreement for short-time work covering at least 70% of the employees at the operating unit.

Updates

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

30 September 2021

The temporarily strengthened short-time work scheme, based on temporary amendments in the Act (2013:948) on short-time work, is replaced by the permanent short-time work scheme, regulated by the same Act.

As a result, the eligibility criteria changes and the level of compensation decreases. As of October 2021, only companies that face severe, temporary financial challenges, caused by factors that could not be controlled or foreseen by the employer, can apply for support. The employer must have used all available measures to diminish the labour costs. A waiting period of 24 months is applied to companies that have received support during 2020 and 2021.

In addition, the level of support decreases. Employers can cut working hours by 20%, 40% or 60%. The state covers one third of the costs. Employees who have been given notice are not covered. Neither are employees who are family members of the employer.

On 1 October 2021, the responsibility for administrating the short-time work allowance scheme shifts from the Swedish Agency for Economic and Regional Growth to the Tax Authority.

23 June 2021

The short-time work allowance scheme was extended to September 2021. Between January 2021 and September 2021, it is possible to reduce working time up to 80%. During this period, the state covers 75% of the costs.

07 January 2021

The short-time work allowance has been extended to June 2021.

Between January 2021 and March 2021, 80% reduction in working time will be possible. Between April and June 2020, the possible reduction rates are 20%, 40% and 60%.

In addition, the 24 month waiting has been removed. As a result, companies that used the allowance in 2020 can apply also in 2021.

As of January 2020, a written agreement between the employer and and an employee is required.

27 May 2020

On 27 May the parliament voted through an increase of the measure, now allowing up to 80% reduction in working hours, compared to the previously available 60%. This extension is available in May, June and July 2020.

Use of measure

The use of short-term work is likely to be widespread. One day after the application opened, the administrating authority - The Swedish Agency for Economic and Regional Growth - had already received 15,000 applications.

By 13 July 2020 approximately 73,500 companies had applied for support. The amount of support that has been paid out is SEK 26 billion (approximately €2.6 billion). The number of employees covered by this measure was approximately 570,000.

As 6 October 2020, 84,707 applications had been made. The amount of support that has been granted was SEK 28 billion (approximately €2.6 billion).

As of 15 January 2021, in total 94,289 applications had been made. The amount of support that had been granted was approximately SEK 31 billion (approximately €3 billion).

Target groups

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

Actors and funding

Actors Funding
National government
Public support service providers
National funds

Social partners

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

Trade unions Employers' organisations
Role Consulted Consulted
Form Unknown Unknown

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

  • Unknown
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The social partners are involved in the implementation of this measure in the sense they have renewed collective agreements in accordance with the new regulations. The first agreement was signed 18 March 2020 when the Confederation of Swedish Enterprises and the trade unions Unionen, the Swedish Association of Graduate Engineers and Ledarna agreed upon including the new regulations in the collective agreements.

Views and reactions

During the spring 2020, the Swedish Federation of Business Owners welcomes this measure. However, they criticise the exclusion of sole traders.

Furthermore, they argue that the current system is not enough but the state should cover 100% of the costs.

Even the Swedish Trade Union Confederation has argued for making it possible to cut down the worked hours by 100% instead of the current 60% (or 80% during May, June and July 2020).

Sources

  • 02 April 2020: The Swedish Trade Union Confederation wants to make it possible to cut down worked hours by 100% (LO vill ha korttids­arbete på heltid= (arbetet.se)
  • 06 April 2020: Short-Time Work Allowance (tillvaxtverket.se)
  • 14 April 2020: Förslag till ändringar gällande korttidsarbete (tillvaxtverket.se)
  • 14 April 2020: Increased support for short-time allowance welcomed but sole traders should be included (Utökad korttidspermittering välkommet – men enskild firma saknas) (www.foretagarna.se)
  • 02 June 2020: an amendment to the short-time working scheme allows for a reduction in activity of up to 80%. (www.planetlabor.com)
  • 13 July 2020: Statistics on short-time work allowance (Statistik om korttidsarbete Översikt) (tillvaxtdata.tillvaxtverket.se)
  • 09 December 2020: Financial compensation for training (Ersättning för kompetensinsatser av permitterad personal) (tillvaxtverket.se)
  • 12 January 2021: Short-time work allowance (Korttidsarbete) (www.regeringen.se)
  • 10 May 2021: Ytterligare förlängning av det förstärkta stödet vid korttidsarbete [Another extension of the short-time work allowance]
  • 21 September 2021: Den permanenta lagen för stöd vid korttidsarbete [The permanent short time work law] (tillvaxtverket.se)

Citation

Eurofound (2020), Short-time work allowance, case SE-2020-12/564 (measures in Sweden), 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.