Questions and Answers About Short-Term Work Allowance
Here are some answers to questions about the short-time work allowance and general information concerning how to apply.
More detailed information, in particular about the application, can be found on the page Apply for financial support 2021.
About the short-term work allowance
What does short-term work mean?
Short-time work means an employee’s hours are cut, i.e. where a reduction in regular working hours occurs due to a partial release from work, such as unpaid leave, is introduced for a limited period of time as allowed for under a central collective bargaining agreement (or - in the absence of a collective bargaining agreement - on the basis of an agreement with the impacted employees under certain preconditions). The wages received will therefore be slightly lower than the regular wages the employees have been receiving.
Short-time work is work where the working time is shorter than the regular working time, where partial work release is introduced with the support of a collective bargaining agreement.
The State support means that the employer’s personnel costs can be reduced by one-half at the same time as the employee will receive 90 percent of his or her wages. The temporary increase in the State's share of the costs makes the system more favourable to both employees and employers.
Why was the short-time work allowance introduced?
The objective is for companies impacted by an external unforeseen crisis such as the outbreak of COVID-19 to have the financial means to be able to retain their personnel and to be able to gear up quickly again when the situation turns around.
Can the funding for the short-time work allowance run out?
There is no overall limit to the funds. The financial support for short-time work is an entitlement support for those companies that fulfil the criteria in the regulations to receive the support, and funds will be available to finance all requests approved.
Who is eligible to apply?
Who can apply for compensation under the short-time work allowance programme?
Companies that can show temporary and serious financial difficulties caused by an external unforeseen crisis such as the outbreak of COVID-19. Thus, the difficulties must have been caused by a relationship outside of the employer’s control and specifically negatively impacting the company’s business operations.
All employers, with the exception of certain governmental entities, may receive support in the event of short-time work if the requirements for the support are fulfilled.
What does it mean that an employer who is in bankruptcy/insolvent is ineligible to receive the support?
A fundamental precondition for being eligible to apply for support for the short-time work allowance is that at the time of filing the application the employer is not in bankruptcy/insolvent, nor subject to an obligation to prepare a Balance Sheet for liquidation purposes, nor undergoing restructuring.
Being in bankruptcy/insolvent means that the company is incapable of paying its debts and that this ability is not merely temporary.
A Balance Sheet for liquidation purposes must be prepared when there is reason to assume that the company’s equity is less than half of its registered share capital.
Which employers can take advantage of the short-time work allowance?
The support applies both to employers who are legal entities or natural persons who conduct a business enterprise.
However, the support does not apply to:
- The central government, county councils, municipalities and local government associations,
- limited liability companies, partnerships, associations and foundations over which the central government, a county council, municipality or association of local authorities has controlling influence (ownership), unless the activities relate to commercial business activities.
Are sole traders/gig workers able to obtain the financial support?
The legislation for short-time work allows for financial support to be provided to companies with employees. Therefore, we are unable to provide support to self-employed persons/gig workers who conduct their business in the form of a sole trader.
See additional information under the heading "Which employees can be included in the short-time work allowance?"
Can staffing agencies receive support under this programme?
Yes, staffing agencies are eligible to apply for support.
What are the rules concerning distribution of dividends for companies applying for financial support under the short-time work programme?
When examining the applications for financial support, Tillväxtverket, the Swedish Agency for Economic and Regional Growth takes any distribution of dividends into account. The assessment will be carried out for each distinct individual employer (recipient of the financial support). The recipient of the financial support is obligated to provide sufficient evidence in support of its entitlement to the financial support.
During the months of financial support, the two calendar months immediately preceding the first month of financial support, or the six calendar months immediately following the last month of financial support, the company may not decide to pay dividends or distribute dividends, or other extraordinary compensation, decide or engage in the acquisition of its own shares or decide to or effectuates a reduction of the share capital or reserve fund for repayment to the shareholders or members.
If the company is part of a Group, the same rules apply to any parent company that is part of the Group. However, the company can make Group contributions during the period financial support is being received.
A disbursement of dividends is deemed to have been implemented on the date the disbursement is made. In certain instances, the underlying decision made by the Annual General Meeting concerning dividends may affect an entitlement to the financial support. For example, a company cannot be regarded as being in serious financial difficulties if the AGM makes a decision during a period when the company is receiving financial support in the form of a short-time work allowance to distribute dividends, even if the actual distribution of dividends is planned to take place on a later date.
What are the rules concerning Group contributions for companies applying for financial support under the short-time work programme?
A company can make Group contributions during the period financial support is being received. However, if a company makes Group contributions the parent company may not decide to pay dividends or distribute dividends, or other extraordinary compensation, decide or engage in the acquisition of its own shares or decide to or effectuates a reduction of the share capital or reserve fund for repayment to the shareholders or members.
This applies during the months of financial support, the two calendar months immediately preceding the first month of financial support, or the six calendar months immediately following the last month of financial support.
Is it only Swedish employers who are eligible to receive this financial support?
The financial support is only available to companies/organisations that are registered as an employer in Sweden and for those of their employees it pays an employer social insurance contribution for in Sweden.
Concerning a transfer of business activities where the employees will transfer over to a new company, what applies in this case?
According to the legislation, a company must have been registered as an employer for the last three months in order to apply for financial support.
In the situation where the transfer of a company, business activities, or a part of a company’s business activities, from one employer to another, where the rights and obligations arising from the employment contracts and employment relationships in effect at the time of the transfer are transferred over to the new employer. In this situation both the new and the former employers may be regarded as an employer who may be entitled to financial support under the short-time work allowance. For example, this may apply when a franchisee takes over a business operation with a newly formed company, a transfer of assets and liabilities, or a similar situation.
In the application, the applicant must provide a statement explaining the transfer and the circumstances surrounding this. The applicant should also state why Tillväxtverket (the Swedish Agency for Economic and Regional Growth), in their assessment, should be able to make a reasonable assessment that the employer is eligible to receive the financial support. The statement must also include information on other facts and circumstances, such as which company has been transferred to the other, which employees this concerns, and include a copy of the transfer agreement.
About introducing short-time work
What are the requirements to be eligible for the short-time work allowance?
- The possibility for short-time work must exist within their central and local collective bargaining agreement.
- In the event the company is not covered by a collective bargaining agreement, at least 70 percent of the employees in the operating unit must consent to and participate in the short-time work. The reduction in working hours and wages that has been agreed upon must be the same for all participating employees within the operating unit.
- The employer must have made use of other available measures to reduce its labour costs. Such measures may involve making changes to the scheduling of work shifts plus the use of other measures to reduce labour costs. An example of such measures is the dismissal of staff who are not employed as permanent employees and who are not regarded as being critical to the business operations, for instance consultants, leased personnel, or temp staff. Thus, in the assessment, the employer must take the role and position of the employee in the company into consideration. Even consultants and leased personnel may be critical to the operations of the business activities and there is no general requirement to lay off consultants or leased personnel. The assessment may be made on a case-by-case basis taking the particular circumstances of the employer concerned into consideration.
- Companies that at the time of the application are under the obligation to prepare a Balance Sheet for liquidation purposes, undergoing restructuring, or are in bankruptcy/insolvent are ineligible to receive the support.
There are three fixed levels of reduction in working hours: 20, 40 or 60 percent, which means reduced costs of 19, 36 and 53 percent respectively for the employer in the three different cases. During January-June 2021 you can also apply for financial support for short-time work arrangements for up to 80 percent of the working hours. It is only in the case of a reduction of working hours within these levels that the short-time work allowance will be available.
You can find a table for the apportionment of the costs under the heading "How are the costs for a reduction in pay due to reduced working hours apportioned in 2021?"
Who decides when to introduce short-time work and who decides when to end the short-time work?
The employer makes decisions concerning both the introduction and withdrawal of short-time work. The conditions should be clarified in the local collective bargaining agreement, or alternatively an agreement with 70 percent of the employees if there is no collective bargaining agreement.
Is participation voluntary for employees?
Partly. The collective bargaining agreement governs if this applies. Otherwise, an approval and consent is required in an agreement with the respective employees.
How can I enter into such an agreement?
You can inform the trade union and call for a co-determination in the workplace negotiation and then reach an agreement with the trade union concerning short-time work, provided that there is a provision in your central collective bargaining agreement concerning short-time work. Contact your employer’s organisation for more info about this!
Employers whose employees are not working under a collective bargaining agreement must instead sign an agreement for short-time work with at least 70 percent of the employees at the operating unit. The agreements can only be entered into when the employees have been temporarily laid off or otherwise paid less due to reduced working hours. Such an agreement must state which employees it covers and the fixed percentage the working hours are to be reduced by (according to applicable levels).
The agreement may be entered into so that it will apply retroactively.
Tillväxtverket, The Swedish Agency for Economic and Regional Growth, has prepared a suggested agreement template Pdf, 749.8 kB.. However, this is only available in Swedish.
To fill out the form, download it to your computer. Then open it in Adobe Acrobat and fill in the information.
It is also possible to download the Adobe Reader app from Google Play Store or Apple’s App Store.
What does it mean that is possible to establish an agreement for short-time work with retroactive effect?
This means that what is agreed upon applies from a specified date, even if that date was prior to when the agreement was signed.
Can personnel who have been given notice of termination, or have actually been laid off, be included in the agreement for short-time work?
Pursuant to the ordinary legislation, financial support can only be obtained for personnel who have been given notice of termination. However, during the exemption period, this is also possible for personnel whose employment has been terminated. Personnel who have been given notice of termination and personnel that have been laid off should be included in the agreement on the same terms and conditions as other employees.
If all of the employees do not fall within one single central collective bargaining agreement, is the employer required to have multiple agreements?
The deciding factor is whether the employees that are to take part in the short-time work are covered by the collective bargaining agreement or not. If they are not, the employer needs to enter into a separate agreement with these employees. The agreement must be made with at least 70 percent of the employees in each operating unit, in order to be able to introduce short-time work.
Can the owner of an aktiebolag (limited liability company) sign a contract with him-/herself to meet the requirement that there must be a contract between the employer and the employees?
The provisions state that if there is no collective bargaining agreement there must be an agreement with at least 70 percent of the employees. However, the rules have not been clarified in regard to the case of companies where the owner constitutes a part or all of the personnel of the company; but rather that all companies must be able to show that there is an agreement with the employees and so far there are no exceptions.
Is it possible to have different percentages of short-time work for different groups or individual employees?
The rules vary, depending on whether the employees are included within a collective bargaining agreement in effect or not.
If there is a central collective bargaining agreement in effect, the application of short-time work and which employees are to be covered by it is governed in a local agreement. Which employees are included within the financial support and the extent to which working hours and wages are reduced is governed by this local agreement.
Therefore, it may vary between different groups of employees.
In the event that the company is not covered within a collective bargaining agreement, at least 70 percent of the employees in the operating unit must consent to and participate in the short-time work. The reduction in working hours and wages that has been agreed upon must be the same for all participating employees within the operating unit.
Is it possible to change the scope after some time, or even return to normal working hours?
Yes, it is possible for the employer to change the scope of short-time work. This should be governed in a new local collective bargaining agreement (or an agreement with the participating 70 percent of the employees in the absence of a collective bargaining agreement). Similarly, it is possible to return to regular working hours. This will affect the degree of financial support received.
Is it possible for an employer to temporarily suspend receiving financial support for a period and return to full staffing?
Yes, it is perfectly okay to not make use of the financial support with the short-time work allowance or to go to a different percentage level for a period of time.
If the employer is covered by a collective bargaining agreement the new level of short-time work is regulated in a new collective bargaining agreement. If there is no collective bargaining agreement there must be a new agreement with at least 70 percent of the employees that regulate the new level of short-time work.
The level of short-time work affects the level of financial support.
For how long can a company continue to receive the support?
For the period of December 2020-June 2021 an employer may receive financial support for a period of six calendar months, with the possibility of an extension for one additional calendar month. E.g. you can apply for financial support for December 2020-May 2021 and then for June 2021 when you submit your reconciliation statement.
Who will be paying the salary to those who are on short-time work?
The employer pays the applicable reduced amount of the salary to the employee. The financial support from Tillväxtverket, the Swedish Agency for Economic and Regional Growth, is granted to the employer, not to the employee.
Can employees do whatever they want with the time they are released from working?
During the time the short-time work allowance is being received, the employees are obligated to be present at the workplace when the employer requests this. In general, they have unrestricted control over their time when they are not working, unless stipulated otherwise in a local agreement, for example with regard to in-service training/skills enhancement initiatives or secondary employment/side gigs.
Can the employer require the employee to work more hours than what was agreed upon in the agreement for short-time work?
Except for special circumstances, the employer may not require an employee to work more than the agreed number of hours per week. The short-time work allowance is intended to support the costs the employer incurs for reduced working hours.
If the employer makes use of the short-time work allowance system and allows employees to work more time than agreed, this may constitute a breach of the rules and the employer will then become liable for repayment. However, if an unforeseen incident or circumstance has arisen that requires additional work, the reduced working hours may be temporarily suspended for the particular individual(s) in question, which can be reported at the reconciliation.
How are the remaining working hours allocated?
The employer manages and distributes the work during the working hours. The levels of reduced working hours remain at 20, 40 or 60 percent. During January-June you can also apply for financial support for short-time work arrangements for up to 80 percent of the working hours. Employers and employees can come to an agreement concerning short-time work at one of these fixed levels of reduction of working hours.
The reduction in working hours may be scheduled without restriction during the agreement period as long as the short-time work throughout the agreement period corresponds to the agreed level. It is also possible to reach an agreement via a collective bargaining agreement concerning how the reduced working hours are to be scheduled.
The provisions of the Swedish Working Hours Act (1982:673) concerning that the employer must inform the employee of changes in the regular scheduling of working hours remain in effect, unless one of the exceptions to the statute applies or is otherwise agreed to in a collective bargaining agreement.
What are the possibilities of organising skills enhancement initiatives during the time released from working?
Tillväxtverket, The Swedish Agency for Economic and Regional Growth, looks favourably upon skills development efforts during the time released from working, considering that from a long-term perspective the business sector’s supply of skills and expertise is crucial for growth.
The local parties have the possibility to reach an agreement that skills enhancement initiatives will take place under the short-time work programme, for instance internal or external skills training or other in-service education, sitting next to a co-worker, or engaging in skills validation.
The fact that the employees participate in educational, training and other skills development efforts as agreed to between the local parties during the time released from working does not affect the financial support.
Is it possible for the employer to introduce short-time work and then dismiss the staff? Or could the employer lay off staff and then introduce short-time work for them?
Yes, according to the exception rules that apply until the 30th of June 2021, it is fully possible to receive financial support even during the notice period for personnel who are laid off for whom short-time work has been introduced. In the same way, it is also possible to introduce short-time work for employees that have already been laid-off. However, according to the ordinary rules, the financial support cannot be paid during the notice of termination period.
Do I need to prepare a new contract for 80 percent short-time work?
Yes, the employer must always establish a new local agreement when changing the level of short-time work. If an agreement has already been entered into for 20, 40, or 60 percent, a new agreement must be prepared for the period covered by this level. (80 percent available for January-June 2021). The employer must be able to send in this agreement at the time of application.
Agreements regarding 80 percent could be written retroactively during the period January 12, 2021 (when the level was presented) until the application opened on the 29th of March.
In 2020, employers could apply for support for short-term work up to 80 percent of working hours during May, June and July.
Can employers bring in extra external staff and temps when regular staff have been given reduced working hours?
If the company experiences a change in circumstances that results in an increased need for manpower beyond what existed when it applied for financial support, the employer shall, to the extent feasible, utilise the employees participating in the short-time work arrangement. The employer has the possibility to plan and schedule the reduction in working hours without restriction during the agreement period, as long as the short-time work throughout the agreement period corresponds to the agreed level. Read further under “How are the remaining working hours allocated?”
If an unforeseen incident or circumstance has arisen that requires additional manpower, the reduced working hours may be temporarily suspended for the affected particular individual(s), which can be reported at the reconciliation. Bringing in extra external staff when demand increases instead of allowing the regular employees participating in the short-time work arrangement to return to work can result in that the employer will be liable for repayment.
The employees must be able to resume work at short notice, no later than the following day, however specific rules can be governed in collective agreements; see more under “Can employees do whatever they want with the time they are released from working?”
Extra external staff during the summer holidays
Employees have the right to take their annual leave days during the summer, as provided by law. However, annual leave days are counted as absences from work as it relates to the short-time work allowance. Thus, it is not possible to receive financial support for short-time working employees during their annual leave days.
During the annual leave season, first and foremost regular staff included within the financial support for short-time work must be scheduled to cover for employees taking their annual leave days. It is permissible under the rules to adjust the working hours of the regular staff and have the financial support adjusted based on levels of 20, 40, 60 or 80 percent.
If there is no possibility to replace a regular employee taking statutory annual leave days with another employee from of the company’s regular staff, “annual leave substitutes” may take the place of employees taking annual leave days. Annual leave substitutes cannot be included within the short-time work programme.
How will our application be affected if we bring in trainees or apprentices?
In order to receive financial support in the short-time work programme, the employer must have used the measures available to reduce the cost of labour. Which measures that are available must be considered for each individual employer. The deciding factor is the employee’s role and duties within the company, not the form of employment.
Tillväxtverket’s point of view is that, for the period of December 2020-June 2021, it may be possible to have paid trainees and/or apprentices while receiving financial support for short-time work.
E.g. if an apprentice through his/her role and duties within the company can be considered critical for the business, financial support may be granted at the same time as the apprentice continues to work for the company. The apprentice can also be included in the short-time work agreement. The recipient of the financial support is obligated to provide sufficient evidence in support of its entitlement to the financial support and also that the company has used all available measures to reduce the cost of labour.
Taking in students in unpaid internships, such as those included as part of an educational course/programme and where student aid is provided, is okay as long as they are not intended to replace the employees who are included within short-time work arrangements.
Which costs can you receive financial support for?
Which employees can be included in the short-time work allowance?
The financial support encompasses those who held employment with the company three months prior to the approval of Tillväxtverket, The Swedish Agency for Economic and Regional Growth, (which is the comparison month) and thus does not apply to new employees. Only employees who then had the same or a higher percentage of full-time employment may be included.
The financial support applies to employees for whom the employer has been obligated to pay employer’s social insurance contributions during the month the support is received. Eligible employees must receive a salary in the comparison month to meet the requirements for regular salary.
Previously, employees belonging to the employer’s immediate family were excluded from eligibility for the short-term work allowance. However, the family member exception from receiving financial support has been eliminated for the period from 16 March 2020 until 31 December 2020. Therefore, it is possible to apply for financial support which relates to family members who are employed by the employer’s company.
Can personnel who have been given notice of termination or actually laid off be included in the agreement for short-time work?
During the exemption period, financial support can be provided both for employees who have been given notice that they will be laid off and employees who have actually been laid off. However, under ordinary legislation, financial support can only be obtained for employees who have been given notice but not yet laid off.
If you are applying for financial support both for employees who have been given notice that they will be laid off and employees who have actually been laid off, they must be included in the agreement on the same terms and conditions as other employees.
Can an owner of a company employed by their own company be included in the short-term work programme?
The legislation for short-time work allows for financial support to be provided to companies with employees for whom they pay social insurance contributions. Hence, if the owner is employed by the company, he or she may be included in the short-term work programme. Due to that a sole trader in an individual company/sole proprietorship is not “employed” in their business activities, as there is no legal distinction between the owner and the business entity, we cannot provide financial support to these individuals. This also applies to members of partnerships or limited partnerships.
How are the costs for a reduction in pay due to reduced working hours apportioned in 2021?
Reduced working hours
Reduced employer costs
PLEASE NOTE! Level 4, 80 percent reduction in working hours, can only be applied for for the months January-June of 2021. The level will be adjusted during the reconciliation.
The support is intended to correspond to 75 percent of the employer’s costs after the reduced working hours.
The basis of calculation is ordinary salary (or wage for hourly employees) excluding the employer’s social insurance contributions. However, to still take the statutory employer’s social insurance contributions of 31.42 % into account, the share of support will be 98.6 percent, i.e. 75 % of 1.3142 = 98.565 %.
Examples of calculation of provisional support for one month
In this case, the employer and employees have agreed that the staff should reduce their working hours by 60 percent.
Engineer Sara’s regular salary is SEK 60,000 per month, however the support calculation has a cap of SEK 44,000.
The preliminary support for Sara will be SEK 44,000 x 60% x individual working ratio x 98.6% = SEK 26,030.
Karl’s regular salary is SEK 30,000 per month.
The preliminary support for Karl will be SEK 30,000 x 60% x individual working ratio x 98.6% = SEK 17,748.
The individual working rate is 1.00 for a person who works full-time and there has been no absence due to illness nor parental leave during the month the financial support is received for.
For example, if a person has time off 2 days in a month consisting of 20 working days, the individual working ratio is (20 – 2) / 20 = 18 / 20 = 0.90, i.e. 90%.
Is there a ceiling on the maximum number of employees that an employer can receive support for?
No, there is no ceiling.
Can this financial support be combined with other types of support?
As a general rule, the financial support for short-time work does not affect the possibilities to obtain other types of support.
Will it be possible to combine reduced working hours with a reduction in employer social insurance contributions?
The temporary reduction in employer's social insurance contributions encompasses all employers. This means that companies that have received financial support from the central government for Nystartsjobb (new start jobs), a short-time work allowance, or other measures of financial support will also benefit from the reduction. This means that in some cases, companies may benefit from both the temporary reduction and the financial support from the government at the same time.
Is there a salary cap for the short-time work allowance?
The support is calculated based on the employee’s regular base salary, up to a maximum of SEK 44,000 per month. This also applies to employees whose salary is more than SEK 44,000. Even when as it applies to the percentage reduction in salary, the support is calculated on a salary of a maximum of SEK 44,000 per month.
In addition, the amounts are not governed by law and therefore may be agreed up between the labour market parties.
Is an increase in salary (or wages) that became effective after the comparison month taken into regard here?
No. The regular base salary (or hourly wage) from the comparison month applies.
In situations where there is a central collective bargaining agreement encompassing the obligation after the comparison month to effectuate salary increases, these payments of increases in salary shall not affect the average reduction in salary pursuant to Section 13. The average salary reduction is based instead on the regular base salary, i.e. the salary prior to the salary increase. However, the employer may only use regular salary (i.e. excluding salary increases taking place after the comparison month) to calculate the amount of financial support.
What is the maximum amount of financial support possible to obtain per employee/per month?
The maximum amount financial support is SEK 26,030 per person/per month. This is the amount if the regular base salary is SEK 44,000 or more and the reduction in working hours is 60 percent.
Are the levels of financial support for short-time work affected by the announced reductions in social insurance contributions?
No, the financial support levels are not affected by these. Nor are they affected by the fact that certain groups have a lower employer’s social insurance contribution even with the current rules in effect.
What about employees who receive unemployment benefits or a recruitment incentive from Arbetsförmedlingen, the Swedish Public Employment Service?
Short-time working does not affect unemployment benefits or recruitment incentives received via Arbetsförmedlingen, the Swedish Public Employment Service. Unemployment benefits is not financial support to business enterprises, but rather financial support linked to an individual.
Tillväxtverket, The Swedish Agency for Economic and Regional Growth, is aware that the combination of short-time work and employment support may result in a negative wage cost.
How are regular salaries calculated for those who receive, for example, a supplement for working unsocial working hours or a commission-based pay?
Ordinary salary is the regular cash payment that would have been disbursed to the employee during the month for the calculation of financial support if he or she had not participated in the short-time work arrangement.
Ordinary salary means such compensation and employment benefits that are normally included as a part of the person’s monthly salary and would be paid but for the employee’s participation in short-time work. It may occur, for example, that the employee receives normally payment for unsocial working hours (allowances for inconvenient working hours, or supplements for shift work), and to the extent that they would have in fact been earned during the relevant month. Commissions that are regularly paid every month are included.
In those situations where an average calculation of the salary/commissions (excluding benefits) is made in accordance with Section 4.2 in the same manner as the comparison month, the starting point is the date of Tillväxtverket´s, decision (in accordance with Section 5(a)), which is a fixed date. In other words, the average of unsocial working hours compensation and variable salary per hour worked received during the three-month period Tillväxtverket’s approval to receive the financial support.
Where the amount of the commissions is not shown in the collective bargaining agreement, the monthly commission is calculated as the lowest of the commissions received for the month preceding the comparison month, the comparison month, and the month following the comparison month.
How is ordinary salary calculated when the employee’s salary is variable?
Ordinary salary is the regular cash payment, including variable remuneration, that the employee would have received during the month had she or he not been participating in the short-time work allowance programme. This may, for example, include normal payments for unsocial working hours or commission to the extent that these would have been earned during the month in question.
Remuneration for unsocial working hours
Unsocial working hours allowance in the employee’s ordinary salary during the supported month may not exceed the amount of the unsocial working hours allowance paid in the months preceding and following the comparison month.
If there is an existing collective agreement signed no later than 16 March 2020 in which it is stated that unsocial working hours allowance is to be paid to the employee during the supported month at a higher amount than the sum than the calculated average, it is important that the employer complies with this agreement. That said, the excess amount is not eligible for support. The employee’s salary reduction shall be based on their ordinary salary calculated as above.
If you have applied for support for an employee, starting from May (comparison month, February), then the employee’s ordinary salary is equal to her or his fixed monthly salary for May plus an unsocial working hours allowance not exceeding the average amount paid for January, February and March.
If commission is included in ordinary salary
If the commission-based percentage of the employee’s salary for the supported month is higher than the lowest commission-based amounts in the month prior to the comparison month or the comparison month, then the lowest of these amounts shall be deemed to be the commission-based part of the employee’s salary.
It is important that the employer continues to comply with the terms of their collective agreements and employment contracts. Should such a contract have been signed no later than 16 March 2020 in which it is stated that commission shall be paid to an employee at an amount higher than the lowest amount paid in the month prior to the comparison month, the comparison month itself or the following month, the excess sum shall be paid in full. The excess amount is not however part of the basis for financial support. The employee’s salary reduction shall be based on their ordinary salary calculated as above.
If you applied for support for an employee with the first supported month May, the comparison month is February. The employee’s ordinary salary is therefore based on her or his fixed salary for the month of May, plus commission to a maximum amount of the lowest commission paid to the employee in January, February or March.
What about bonus payments when an employer is seeking short-time work support?
Bonuses that the employee has an unconditional right to receive are consistent with support for short-time work, as the employer then has an obligation to pay and they can therefore not be deemed an available measure to reduce the cost of labour.
However, if the employer has a unilateral contractual right to decide on the payment of bonuses, in Tillväxtverket's, the Swedish Agency for Economic and Regional Growth’s, principled assessment the payment of such bonuses is not compatible with the employer’s obligation to reduce wage costs during the support period. If the employer then chooses to pay bonuses during the support period, this may affect their right to support for short-time work.
Tillväxtverket will take bonus payments into account when assessing applications for support. The assessment will be carried out for each individual employer (recipient of financial support). The recipient of financial support has an obligation to demonstrate entitlement to that support.
Bonus payments are not included in the basis for support and should therefore not be reported as ordinary salary.
Can this financial support also be received for fixed-term employees?
Yes, the financial support may apply to fixed-term employees if they have been employed during the comparative month and if the employer is assessed to fulfill the basic requirements that exist for the support in general, for instance having taken measures to reduce personnel costs.
Is the sickness benefit qualifying income affected by the reduced salary?
No, during the short-time work, the sickness benefit qualifying income (SGI) is protected. However, the employee should inform Försäkringskassan, the Swedish Social Insurance Agency, that they are participating in short-time work when applying for a social insurance benefit.
Is the pension affected by the reduced salary?
Yes, the pension is affected. However, it is estimated that this will be marginal, due to that the short-time work is only for a brief period of time over the course of one’s working life.
Does the employer receive the financial support during the employee’s absence due to illness, parental leave or annual leave?
Absence due to illness, parental leave, care of an ill child and annual leave or other time off is regarded as absence, and thus will be included in the provisional calculation of the financial support. Absence is not support-based, days of absence must therefore be reported in the reconciliation in order to be discounted from the support.
With the reconciliation, the employer must report all absences, including annual leave and other time off. If the provisional financial support disbursed does not correspond to the actual period/hours worked for the period financial support is received, the surplus will be deducted from the future periods of financial support. No repayment is to be made before the employer is informed about how the repayment is to be made.
Tillväxtverket, The Swedish Agency for Economic and Regional Growth, has previously made the assessment that paid and earned annual leave should be equated with presence in the workplace, however after the Swedish Government clarified that absence from work (for whatever reason) must be excluded from the calculation of the short-term work allowance, Tillväxtverket has adjusted the previous position. The purpose of the adjustment is to harmonise the application of the legislation with the intention of the Riksdag. Consequently, all annual leave and other time off will be counted, for the purposes of calculating the provisional financial support, as an absence from work.
How is paid leave calculated when it is not part of the employee’s annual holidays?
Tillväxtverket, The Swedish Agency for Economic and Regional Growth, has received a number of questions regarding paid leave other than annual holidays; for example, reduced working hours, compensatory rest time, flexible working hours and approved absence.
Reduced working hours, compensatory rest time, flexible working hours and approved absence should be counted as attendance in reporting. This is because such leave is based on time earned by the employee and represents an unchanged cost for the employer. Paid annual leave pursuant to the Swedish Annual Leave Act (SFS 1977:480) should be reported as absence as this is a statutory benefit.
- Paid leave in the form of withdrawals of compensatory rest time or flexible working hours is considered to be working hours allocated to a different point in time, generally to compensate for the employee previously having worked excessive hours.
- Leave in the form of approved absence – for example, doctor’s appointments or attendance at funerals – is a form of paid leave agreed between the employer and employee for which the same costs accrue to the employer as if the employee had been at work.
Holidays, on the other hand, are specifically regulated in the Swedish Annual Leave Act and are a statutory right. This implies that no reduction in working hours and salary may be made for holidays.
Paid leave other than annual holidays are therefore considered attendance eligible for support and are covered by the same rules on reduced working hours and salary as any other regular salary and working hours.
How is short-time work calculated, if an employee is on parental leave or part-time sick leave – for instance 25 percent?
If the employee is expected to work 75 percent (i.e. is on 25 percent parental leave or sick leave) during the months in which the financial support is to be received, the salary after deduction of parental leave or sick leave is to be specified in the application. The rate of being present at work is 100 percent. (See the example of the calculations below.)
Example: An employee who is on partial parental leave
Stina has a permanent employment at 100 percent. During the months the employer receives financial support under short-time work, Stina is scheduled to be on partial parental leave at 25 percent. Stina usually earns SEK 40,000 however during her parental leave will receive a salary equal to 75 percent, i.e. SEK 30,000 per month.
The short-time work allowance is then based on a salary 30,000 per month and a rate of being present at work of 100 percent. However, the working hours are calculated based on 75 percent and if Stina takes a partial layoff at level 3 (60 percent reduction in working hours), then Stina should be working a total of 30 percent of regular working hours.
Requests from an employee on parental leave to go up to the regular percentage of full-time employment before the voluntary unpaid leave of absence may be decided in dialogue with the employer. Parental leave allowance and sick leave benefits remain unchanged.
The example above also applies to employees on partial sick leave when the reduction of working hours begins. During the reduction of working hours, Försäkringskassan (the Swedish Social Insurance Agency) assesses the reduction in the work-capacity in relation to the extent of the work prior to the reduction of working hours and the employer then seeks a short-time compensation as described above.
Example: An employee going on partial sick leave after the employer has introduced short-time work
If on the other hand, the employee becomes ill during the reduction of hours during short-time work and is to work part-time, Försäkringskassan, the Swedish Social Insurance Agency assesses, the work-capacity based on the extent that he or she should have worked during the short-time work agreement. Financial support from Tillväxtverket, the Swedish Agency for Economic and Regional Growth, for short-time work will continue according to the original plan and will not need to be adjusted. If the number of hours worked changes during a partial sick leave (PTSL), it is important that the employee notifies Försäkringskassan.
In the case of full-time sick leave (FTSL), no financial support will be disbursed for short-time work and the support is corrected at the reconciliation.
How does VAB work during short-time work?
A temporary parental benefit for care of a sick child (VAB) is paid to a parent who needs to remain away from their job to care for a sick child. Receiving a temporary benefit for care of a sick child is regarded as being absent from work. If the parent is taking part in a short-time work plan, the short-time work allowance is paid for the time that the parent would have worked during the short-time work plan.
Can the employer receive financial support, let’s say for 60 percent, but have the employee's number of working hours reduced to zero??
The legislation fully allows the employer to make a temporary layoff reducing the number of the employee’s working hours to zero. However, the short-time work allowance is payable for a maximum of 60 percent of the working hours (80 percent in May-July 2020 and January-June 2021).
Can I hire additional employees after I have introduced the short-time work?
Employers shall, to the fullest extent feasible, staff the needs within the company with employees participating in the short-time work allowance programme.
On the other hand, if there is a true need for a certain type of skill or expertise that none the employees whose work hours have been reduced have, for example due to that an individual with a business-critical expertise has quit, it can however be necessary to recruit and hire a new person. However, the new employee cannot be included within the short-time work allowance programme.
Does the financial support for short-time work also apply to those only working part-time?
Yes. In such cases the reduction in working hours and salary paid is to be calculated on the basis of the extent of the part-time work (percentage of full-time) and the regular salary they would be paid for the part-time work.
What this means is that if an employee works part-time at 50 percent of full-time and receives a reduction in working hours of 60 percent, they will then be working 20 percent of a full-time job.
Are “red days” (national holidays) counted as absence from working?
The rate of being present is calculated based upon how the employee would normally have worked during the month.
If you have another position that requires that the employee works on red days, the rate of being present is calculated based on the expected working hours.
How does the financial support affect probationary employees?
The employer can also receive financial support for probationary employees, as long as the employer otherwise fulfils the requirements for receiving the support. One of the basic requirements is that employers must have made efforts to the extent possible to reduce their cost of labour.
Can employees who have changed their form of employment after the comparison month be included within in the short-time work?
A basic requirement to be able to apply for financial support for short-time work is that the employer has done what is reasonably feasible to reduce the cost of labour. If the employee with a new form of employment remains working for the company after these measures, with a lower or equal percentage of full-time employment compared to the comparison month, they can be included within the programme providing financial support.
Can an employer receive financial support for an employee who has not been employed in the comparison month, however who subsequently has a period of employment of more than three months?
No, unfortunately this is not possible as the financial support is granted on the basis being employed during the comparison month. See the description under the heading “Definitions.”
I understand that an employer must sign an agreement based on the 70 percent rule – who is included in that calculation?
For employers who do not have a collective bargaining agreement, it is required that all employees who are to participate in the short-time work plan and who will be reducing their working hours must sign an agreement to do so. In order for you as an employer to receive financial support, at least 70 percent of the employees within an operating unit who fulfil the basic requirements* must be included in the short-time work plan.
The calculation of 70 percent of employees is to be made on the basis of all employees who fulfil the basic requirements* and who thus constitute the 100 percent. Employees who are or who have been temporarily absent from work are to also be included in the 100 percent, to the extent that they are to participate in the short-time work plan. The absence from work may be due to, for instance, sick leave, parental leave, care of an ill child or a general leave of absence.
* The basic requirements for employees are set out under the heading “Which employees can be included in the short-time work allowance?”
When can I apply for the financial support?
You can apply from the 29th of March 2021. However, the financial support can begin from the 1st of December 2020.
Support may be granted for a maximum of six consecutive months, e.g. you can apply from December 2020- May 2021. If you also want to apply for June you will have the possibility to do this when you submit your reconciliation statement in July.
What do I do to apply?
The application period opened on 29th of March You apply via tillvaxtverket.se. The process consists of several steps, such as submission, then approval, and then decision on preliminary financial support. The first month in the support period that the financial support is to be received must commence no later than 45 days after receiving the approval. Otherwise, the support will not be dispersed.
After the granting of provisional financial support, the employer is obligated to make reconciliations in order to establish the final amount of financial support. If a reconciliation is not sent in in time, the employer has an obligation to pay back previously granted preliminary financial support.
How do I apply if we are multiple operating units within one company registration number?
The application for a short-time work allowance is based on the company registration number. Approval can be given to one individual employer in accordance with Section 5a. The approval is given per employer and applies to the entire company. An employer is a company that is identified by one individual company registration number.
An employer can have one or more operating units (see the question “How do you define an "operating unit"?”). Where an employer has several operating units, the application for approval and financial support for different operating units is to be collected together into one application. Multiple applications using the same company registration number may cause a delay in the application process.
How quickly will the request for financial support be able to be processed?
We will do our utmost to accomplish a speedy processing. However, presently we are unable to estimate how many applications we will receive and hence the volume related to available resources. Therefore, we cannot say right now what the exact time period for processing will be.
Does Tillväxtverket, the Swedish Agency for Economic and Regional Growth, accept digitally signed agreements between employers and employees?
Yes. However, the employer will need to be able to verify the digital signature (meaning the signature of the specified person who has signed the document), at the request of Tillväxtverket.
How will the Swedish Agency for Economic and Regional Growth deal with suspected fraud?
Tillväxtverket, the Swedish Agency for Economic and Regional Growth, takes a particularly dim view at attempts to exploit the current crisis. Therefore, the Agency will be actively engaged in anti-fraud activities. If we become aware that someone is intentionally attempting to game the system for the purpose of obtaining taxpayer funds which the central government has now set aside to assist companies that find themselves in serious financial difficulties due to the coronavirus pandemic, we will not hesitate to take legal action and report suspected criminal offences to the police. We are also working together with other governmental authorities to combat attempts to commit fraud and unlawfully obtain the short-term work allowance.
Note that the Agency’s anti-fraud activities concern deliberate attempts to commit a crime. In the event of an unintentional error or inaccuracy, it will of course be possible to correct this when noticed.
Our company/organisation requires that two persons must jointly sign, however via BankID the application can only be signed by one single person. How should we deal with this?
In order to comply with the requirement for joint signatures, a power of attorney that gives the applicant the right to sign the application for a short-time work allowance via BankID will be needed.
How is the money disbursed?
The money will be sent to the specified PlusGiro or BankGiro account.
Who is entitled to sign the application?
The individual who signs the application must be an authorised signatory or have the right to sign a contract for the organisation you are applying for financial support for. In certain situations, an authority to sign may be derived from a power of attorney or delegation of authority.
The party who has the right to sign a contract may differ between different organisations, therefore verify what applies in your organisation before signing the application.
Obligation to repay and return incorrect funds
About obligation to repay and return incorrect funds
Once the short-time work programme is completed, submitted data, contracts and agreements are re-examined against issued funds. All short-term work funds are provided in advance and on certain legal terms. Payments are subject to change pending the final audit.
The final review takes place at the end of the grant period in order to ensure eligibility and accuracy. At this stage employers must provide information such as timesheets, salary specifications, pay slips and contracts. As a result of this assessment, employers may be required to reimburse previously allocated funds, while others could be entitled to additional financial support.
Employers must notify Tillväxtverket, The Swedish Agency for Economic and Regional Growth, of payroll changes or contract alterations that lead to an overpayment through the short-time work programme. Employers will not only have to pay back these claims but may also face penalties or criminal sanctions. Generally, miscalculations are balanced out during the mandatory audits and when corrections are processed in subsequent grant periods.
How to repay overclaimed funds
Overclaimed funds can only be repaid upon receiving an official decision, which also contains an estimated debt amount. Payment details are generally released within three weeks of the final audit. Payment instructions can also be requested through the digital tool “My Application” (Min ansökan). Kindly note that payments may be delayed if registered with incorrect references.
Payments are due 30 days after the invoice date. A reminder with a 10-day payment term is sent when payments are overdue. Late payments are subject to interest and affect credit ratings. Interest is charged to unpaid invoices following day 51, which includes the initial payment term and appeal period (30 days plus 21 days).
Overdue payments are automatically forwarded to and collected by the Debt Collection Agency (Kammarkollegiet). Read more on their website.
Further steps are taken when the debt is later transferred to the Enforcement Authority (Kronofogden). Read more here.
How to appeal a decision
An appeal must be submitted within three weeks of receiving an official decision regarding funding or reimbursement. The decision letter contains more information on the appeal process. Payment instructions are provided if the previous ruling is sustained.
If a Group has several different subsidiary companies, will each unit/company be considered as separate?
Yes. In addition, it is also possible to regard the various operating units within a company as separate when it comes to fthe share oort-time work. Each company within a Group shall submit a separate application, but this application should include all operating units within that company.
Is the short-term work allowance regarded as “state aid”?
No, it is not considered to be state aid due, to that the measure is not selective.
How do you define an “operating unit”?
An operating unit is delimited to one particular physical location. This may be the entirety, or part, of a company located within the same building or the same enclosed area/contiguous space. For example, it could be a factory, a retail shop, or a restaurant.
An operating unit does not have to be an independent business unit. The deciding factor is the geographical delimitation, not the organizational.
E.g. two shops that are owned by the same company, but located in different cities, normally constitute two separate operating units.
The interpretation of what is an operating unit is based on Section 22 of the Swedish Employment Protection Act (1982:80).
Each employer should make their own assessment of what constitutes an operating unit in its own organization. The assessment should be documented.
What do you mean by “comparison month”?
The comparison month is the reference month used for the application and to know which persons are eligible for financial support.
The comparison month for short-time work allowance until 30 Juni:
- If you have not applied for financial support in 2020, your comparison month for a short-time work allowance in 2021 will be September 2020.
- For those who have applied for financial support in 2020, the comparison month will be the month that has been the basis for calculating support for short-time work submitted in 2020.
The comparison month for all applicants during July–September 2021 will be April 2021.
Collected information relevant to you as an owner or manager of a company
Many of Sweden’s business enterprises are severely impacted by the COVID-19 pandemic. Verksamt.se has gathered information that may be of value for you to know as an owner or manager of a company.