Briefly about the Swedish Government’s emergency package

At today’s press conference, the Swedish Government announced a series of support measures for companies and employees to relieve the effects of the new corona virus.

Introduction of short-term work as per today

The proposal means that the employer’s salary costs can be reduced by half as the Swedish Government will bear a significantly greater responsibility for costs, compared to when the law was introduced in 2013.

The financial support shall be given to a sole employer after approval by the Swedish Agency for Economic and Regional Growth. Such an approval shall only be given if the employer’s financial difficulties are temporary and severe and this is due to circumstances beyond the employer’s control. Furthermore, it is required that the decline was unforeseen and that the employer also has used other available measures to decrease the costs. The legislator refers to, for example, termination of probationary employments and termination of consulting assignments.

The Swedish State’s increased responsibility for a proportion of the salary costs is limited to the months within the period of 16 March 2020 until 31 December 2020.

Furthermore, it is required that short-time work either has support in central or local collective agreement or, in workplaces where there are no collective agreements, a written agreement regarding short-time work with at least 70 % of the employees at the operating unit.

The proposal will enter into force on 7 April 2020 but with retroactive effect from 16 March 2020, has immediately entered into force.

The Swedish State will bear the costs for sick pay during April and May

Until recently, companies have borne the costs for sick pay during the first 14 days, after which the Swedish Social Insurance Agency has been responsible for the payment of sickness allowance. The Government of Sweden now suggests that the Swedish State shall fully compensate employees for such costs during the two months of April and May in 2020. Self-employed persons shall also be able to receive a standardised sickness allowance.

How this practically should be handled, we will address at a later stage.

Respite with payment of value-added tax, social fees and preliminary tax

For companies that normally handle their taxes without remarks, there is now a possibility to receive respite for three months of tax payments under a twelve-month period. Payments that already have been made since January can also be reclaimed. All in order to strengthen companies’ liquidity and prevent employee terminations.