Central government assumes sick pay responsibility

Staten tar sjuklöneansvaret

Country	Sweden , applies nationwide
Time period	Temporary, 01 April 2020 – 30 September 2021
Type	Legislations or other statutory regulations
Category	Income protection beyond short-time work – Paid sick leave
Author	Anna-Karin Gustafsson (Oxford Research) and Eurofound
Case created	13 April 2020 (updated 28 September 2021)

Background information

The central government will temporarily assume the entire cost of all sick pay during April and May. The aim of the measure is to ease the financial pressure on Swedish employers, who would normally bear the economic burden for the first two weeks of an individual employee's sick leave compensation. The measure is regulated in the Act (2020:190) on changes in the Act (1991:1047) on sick pay (Lag (2020:109) om ändring i lagen (1991:1047) om sjuklön).

Content of measure

Swedish employers are, under normal circumstances, protected against high costs for sick leave. Normally, employers are reimbursed for sick pay costs exceeding a certain share of the wage costs (maximally SEK 250,000 per year). But due to the COVID-19 outbreak, the parliament and government have decided to relieve all employers of the entire sick pay responsibility during April and May 2020.

Under the new system, employers pay out sick leave compensation as usual to their employees. They do not need to apply directly for the reimbursement but declare sick pay costs in their usual PAYE tax return for these months. The Swedish Tax Agency then forwards the information to the Social Insurance Agency, which then compensates the employer.

Self-employed persons will also be compensated in that they can receive standardized sick pay for days 1-14.

Updates

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

17 September 2021	The Government has decided to end this measure since 70% of the population is now vaccinated. As of 1 October 2021, the central government no longer assumes sick pay responsibility.
31 March 2021	The new form of the measure introduced in September 2020 (whereby employers are compensated for sick pay exceeding what would be expected under normal circumstances) has been extended until 30 April 2021. A proposal on extension to include also May and June 2021 is currently pending.
25 September 2020	Between 31 August 2020 and 31 December 2020, the state will no longer cover the entire costs but it will continue to cover a higher part of the sick pay than it normally would. The compensation rate is dependent on the employer's total salary costs and it is higher in the case of small companies.

Use of measure

All employers in Sweden are covered by this measure. It is too early to say how many will be receiving compensation, but the number is expected to be very high.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Social insurance	National funds

Social partners

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

	Trade unions	Employers' organisations
Role	Informed	Informed
Form	Not applicable	Not applicable

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

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

Involvement

No information available.

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