Labour market policy initiatives in the Budget Bill for 2022

Published

In the Budget Bill for 2022, the Government proposes a reinforced jobs policy with new measures so that everyone can participate and take Sweden forward after the pandemic. These measures include providing more people with employment training, counteracting long-term unemployment, giving older jobseekers more time in new start jobs and introducing more unemployed people with disabilities to the working world.

Here is further information on the Government’s proposed investments in the Ministry of Employment’s sphere of responsibility.

Reinforcement of Arbetsförmedlingen (the Swedish Public Employment Service)
SEK 1.2 billion to give more jobseekers access to a job-matching service
SEK 425 million to give more jobseekers access to employment training 
SEK 701 million to enable more people to get extra jobs or introductory jobs
More unemployed people with a disability to benefit from the introduction to work service
SEK 52 million for more participants in work experience
SEK 85 million for enhanced new start jobs
Time in new start jobs extended for older jobseekers
Extended mandate for the Delegation for the Employment of Young People and Newly Arrived Migrants, and promotion funds
Entry agreements to be introduced in accordance with the social partners’ proposal
Early measures for asylum seekers
Reinforcement of measures to accelerate integration
Reinforcement of the unemployment insurance fund
Employees who are not covered by collective agreements will be offered basic retraining and skills support

Reinforcement of Arbetsförmedlingen (the Swedish Public Employment Service)

Unemployment and the number of long-term unemployed have increased in the wake of the pandemic and are expected to remain at a high level in 2022. It is important that Arbetsförmedlingen be given the right conditions to carry out its mandate and thereby prevent people from becoming stuck in prolonged unemployment.

The Government therefore proposes in the Budget Bill for 2022 that Arbetsförmedlingen’s administrative services be reinforced with SEK 502 million in 2022. The estimated increases for 2023 and 2024 are SEK 620 million and SEK 696 million respectively. The Government further proposes allocating SEK 45 million to administrative appropriations from 2022 to 2024 for enhanced supervisory work. Moreover, appropriations will be reduced by SEK 72 million per year for direct allocation to Statistics Sweden and the National Government Service Centre for activities that Arbetsförmedlingen currently pays for.

Arbetsförmedlingen is responsible for central government labour market policy. Reinforcement of administrative funds improves conditions for Arbetsförmedlingen to offer the same level of service throughout the country and to work actively to prevent women and men from becoming stuck in long-term unemployment.

SEK 1.2 billion to give more jobseekers access to a job-matching service

Matching services target a wide range of jobseekers and are being introduced throughout the country. A matching service provides tailored activities to those who need support finding a job or beginning their studies. This can involve establishing contacts with employers, helping people find and apply for jobs, and providing information about training opportunities, guidance and short courses.

In 2021, matching services provided by independent actors increased in response to the need to address growing unemployment and reform Arbetsförmedlingen. Their remuneration is largely results-based and differentiated based on how far removed from the labour market the participants are. Increased participation in matching services can contribute to shortened unemployment times and more effective matching between jobseekers and employers seeking workers.

In the Budget Bill for 2022, the Government proposes that SEK 1.2 billion be allocated so that more people can benefit from these initiatives with the aim of counteracting unemployment, improving matching in the labour market and as a further step in reforming Arbetsförmedlingen. The estimated increases for 2023 and 2024 are SEK 173 million and SEK 2 690 million respectively.

SEK 425 million to give more jobseekers access to employment training

Many jobseekers lack the skills demanded by the labour market and need to improve their skills or train for a shortage occupation. Employment training increases jobseekers’ chances of finding working and at the same time contributes to meeting employers’ recruitment needs. Access to relevant employment training is important both during the ongoing crisis and once the economy has recovered but there is a labour shortage.

For this reason, the Government proposes in the Budget Bill for 2022 that SEK 425 million be allocated to provide more jobseekers with employment training. An estimated SEK 856 million will be provided for 2023 and SEK 974 million for 2024. The aim of the proposal is to enable a high and consistent level of employment training volumes from 2022 to 2024. In total, this involves an estimated volume increase of approximately 2 100 people on average in 2022, 4 400 in 2023 and 5 000 in 2024.

By maintaining employment training volumes, it will be possible for Arbetsförmedlingen to offer more jobseekers training for shortage occupations, which is also important in light of the green and digital structural transformation facing Sweden.

SEK 701 million to enable more people to get extra jobs or introductory jobs

Long-term unemployment has risen in the wake of the COVID-19 pandemic and there is a risk that it will become entrenched at a high level. Extra jobs and introductory jobs can create job opportunities, not least for foreign-born women, and increase opportunities for employment. The Government therefore proposes an investment of SEK 701 million in 2022 to give those who are furthest removed from the labour market access to extra jobs and introductory jobs. An estimated SEK 778 million will be invested in 2023 and SEK 677 million in 2024. The proposal entails a higher long-term number of people employed through employment support.

An extra job is a job with an employer in the welfare, public, cultural or non-profit sector for which 100 per cent of the employer’s costs are subsidised. For introductory jobs, 80 per cent of the employer’s costs are subsidised in both private and public sector activities.

More unemployed people with a disability to benefit from the introduction to work service

Conditions for finding work need to be further improved for groups that are far removed from the labour market. The Government therefore proposes that SEK 31 million be allocated to increase the number of places in the introduction to work service.

Long-term unemployment has risen in the wake of the COVID-19 pandemic. Many long-term unemployed people have a disability that entails reduced working capacity. The introduction to work service is aimed at jobseekers who need preparatory activities before they can take part in labour market policy initiatives and programmes. The introduction to work service is tailored to the participant’s individual needs but can include a survey of the participant’s skills, orientation ahead of work and work practice. Many participants have a disability.

The Government allocated SEK 7.8 million in the spring amending budget for 2021 to the introduction to work service in 2021. More jobseekers in need of rehabilitation and preparatory activities need to access this service. The Government therefore proposes in the Budget Bill for 2022 that the investment be extended and made permanent, and that SEK 31 million be allocated as of 2022 to enable an additional 1 000 people to benefit from the introduction to work service. The investment is expected to help more people who are not ready for job matching to begin studies or a labour market policy programme to improve their prospects.

SEK 52 million for more participants in work experience

Unemployment has increased substantially during the pandemic. In 2021, the economy is recovering as restrictions ease and an increasing number of people get vaccinated. For those with a weaker position in the labour market, however, there is a risk of becoming stuck in long-term unemployment. More jobseekers need support earlier to avoid long-term unemployment.

To enable those who have become unemployed but are still not qualified for the guarantee programmes to increase their changes of re-entering the labour market, the Government proposes reinforcing funds to Arbetsförmedlingen for work experience placement schemes. Work experience placements enable jobseekers to try out a job, expand their contact network or demonstrate their skills to an employer.

The Government proposes that Arbetsförmedlingen be allocated funds amounting to SEK 52 million for more work experience placements for people outside the guarantee programmes. The estimated increase for 2023 and 2024 is SEK 65 million. This roughly equates to doubling the number of full-time equivalent places to an average of 2 000 places for 2022 and 2 500 for 2023 and 2024. These 2 000 places equate to an estimated 12 000 people on the scheme in 2022.

SEK 85 million for enhanced new start jobs

In the Budget Bill for 2022, the Government proposes that funds be allocated to partly offset the lower new start job subsidy rate when employing people for whom the employer pays reduced employers’ social security contributions.

The previously adopted reforms entailing reduced employers’ social security contributions for young people and the ‘growth support’ mean lower subsidy levels when employing people in new start jobs. This is because the support for new start jobs is based on the established employers’ social security contributions. This risks reducing the incentive for employers to employ jobseekers in new start jobs.

The Government therefore proposes in the Budget Bill for 2022 that funds be allocated to partly offset this effect. Expenditure for these measures is estimated to amount to SEK 85 million in 2022, SEK 41 million in 2023 and SEK 21 million in 2024.

Time in new start jobs extended for older jobseekers

Older jobseekers run a greater risk of long-term unemployment. For this reason, the Government is allocating SEK 20 million in the Budget Bill for 2022 so that people aged 55 or older can hold new start jobs for a longer period.

Jobseekers who are 55 or older belong to a group that, according to Arbetsförmedlingen, is generally less competitive in the labour market. To counteract long-term unemployment among older people, the Government proposes in the Budget Bill for 2022 that the rules for new start jobs be changed so that those aged 55 or older can hold new start jobs for twice as long as the current regulatory framework allows, but for a maximum of 48 months.

The aim of new start jobs is to stimulate employment of people who have been out of work for a long period. An employer who wants to employ a person in a new start job has the right as long as the conditions for the support are met.

The proposal aims to increase opportunities for older people who are long-term unemployed to re-enter and establish themselves in the labour market through a new start job.

The investment is estimated to amount to SEK 21 million in 2022, SEK 40 million in 2023 and SEK 41 million in 2024.

Extended mandate for the Delegation for the Employment of Young People and Newly Arrived Migrants, and promotion funds

Effective collaboration between central government and the municipalities is important for getting people into work. This collaboration is especially important for individuals who are far removed from the labour market and at risk of long-term unemployment. For this reason, the Government established the Delegation for the Employment of Young People in 2014, and tasked it with working for greater local impact of labour market policy measures against youth unemployment. In 2017, this mandate was expanded to include newly arrived migrants.

In the Budget Bill for 2022, the Government announced an extension of the Delegation’s mandate through 28 February 2023. In its final report on the mandate, the Delegation described how new working methods developed as a result of the Delegation’s work can be integrated into Arbetsförmedlingen’s regular activities.

At the same time, the Government proposes in the Budget Bill for 2022 that SEK 20 million be allocated in 2022 to promote collaboration between municipalities and central government. The Delegation will make these funds available and municipalities, in particular, can apply to cover some of the costs of collaboration.

Entry agreements to be introduced in accordance with the social partners’ proposal

The Government is working to introduce labour market entry agreements in the first half of 2022 in accordance with the social partners’ proposal.

Entry agreements are a completely new model for central government to stimulate employment, built on a proposal from the Swedish Trade Union Confederation, Unionen and the Confederation of Swedish Enterprise. The model differs from existing subsidised employment in that the subsidy is paid directly to the individual instead of the employer paying the whole salary to the employee and then receiving compensation from the central government for part of the salary. Entry agreements will be introduced in accordance with the social partners’ proposal for businesses with a collective agreement on entry agreements.

Entry agreements will give more newly arrived migrants and unemployed people a way into employment and will also facilitate skills supply to businesses. Entry agreements should normally lead to permanent full-time employment.

The introduction of entry agreements in accordance with the social partners’ proposal entails savings on the costs for entry agreements amounting to SEK 32 million in 2022, SEK 41 million in 2023 and SEK 52 million in 2024. This halves the amount allocated in earlier budgets and is the result of targeting companies with a collective agreement on entry agreements.

Early measures for asylum seekers

In the Budget Bill for 2022, the Government proposes that funds to civil society and municipalities for early measures for asylum seekers and others be increased by SEK 30 million in 2022, with the aim of ensuring access to information on Swedish society and health promotion activities.

Early measures for asylum seekers and others contribute to counteracting passivity during the asylum-seeking period, facilitating contact with the Swedish labour market and promoting future integration for those who are granted a residence permit. Enabling more asylum seekers to benefit from Swedish language courses and information on Swedish society during the asylum-seeking period should facilitate and accelerate entry into the labour market. Early measures can be especially important for asylum-seeking women. In addition to asylum seekers, these measures include people with a residence permit living in accommodation provided by the Migration Agency who are awaiting reception in a municipality.

Reinforcement of measures to accelerate integration

It is essential that newly arrived migrants who have been away from the labour market for a long period to take care of children can also use this time for measures that strengthen their prospects of integration into the labour market and Swedish society. The Government therefore proposes allocating an additional SEK 20 million per year in 2023 and 2024 to municipalities and civil society to promote participation in working life and Swedish society (‘37a funds’).

The proposal enables the continuation of the Government’s ongoing 2018–2022 investment in language development measures for people on parental leave and others with small children with the aim of promoting participation in working life and Swedish society. The proposal is primarily intended as an opportunity for newly arrived migrant women during their parental leave.

Integration into working life and Swedish society tends to take longer for newly arrived migrant women than newly arrived migrant men, and this is especially the case for newly arrived migrant women who have been on parental leave for long periods. Measures aimed at people on parental leave are deemed to increase gender equality, since women take parental leave to a much greater extent than men.

The pandemic’s effects on the labour market have eliminated many of the employment opportunities that normally serve as an entry to working life. Measures by municipalities and by municipalities in collaboration with civil society may have greater prospects of reaching target groups who would not otherwise make use of the public offering. The funds are thus deemed to enable measures that reach groups who, for example, do not take part in Arbetsförmedlingen’s introduction activities. The municipalities’ role in these activities can also facilitate courses of measures and encourage people on parental leave to make use of the regular offering of measures for increased employment after parental leave, such as Swedish for Immigrants, municipal adult education and Arbetsförmedlingen’s programmes.

Reinforcement of the unemployment insurance fund

The labour market remains heavily impacted by the pandemic, and this causes financial difficulties for individuals. The Government has reinforced unemployment insurance several times during the pandemic, for example by raising benefit levels and adjusting the qualifying period so that more people can qualify for benefits. These two measures will remain in effect through 2022, as announced in the Budget Bill for 2021.

To mitigate the financial consequences of the pandemic, the Government proposes that the number of qualifying days be reduced from six to two in 2022. This means that individuals will be able to receive unemployment benefits earlier than under the current rules. The costs of the proposal are estimated at SEK 345 million in 2022. The temporary qualifying conditions will enter into force on 3 January 2022 and cease to apply on 1 January 2023.

The Government has also submitted a proposal enabling the relaxation of certain regulations for entrepreneurs to be extended. The Government is extending the relaxation of the regulations concerning dormant businesses through exceptions to the ‘five-year rule’ through 2022. The Government also intends to extend the temporary possibility for entrepreneurs to take certain marketing measures while retaining unemployment benefit through 2022.

Employees who are not covered by collective agreements will be offered basic retraining and skills support

Today’s labour market places high demands on skills and the ability to adapt to new duties or jobs. Employees without a collective agreement are less likely to have access to retraining support financed by the employer. For this reason, the Government proposes in the Budget Bill for 2022 that a new public retraining organisation should offer basic retraining and skills support for employees who are not covered by a collective agreement. Employers who finance retraining and skills support through a registered retraining organisation will also be eligible for compensation for doing so. A public retraining organisation will be established under the Legal, Financial and Administrative Services Agency.

The Government proposes in the Budget Bill for 2022 that SEK 75 million be allocated to finance the new public basic retraining and skills support through the public retraining organisation. This is estimated to increase to SEK 1 billion in 2023 and SEK 3.2 billion in 2024. This also includes resources for compensation for the costs of retraining services as of 2023 amounting to just under SEK 700 million in 2023 and SEK 2.9 billion in 2024. In the autumn amending budget, the Government proposes allocating SEK 10 million to the Legal, Financial and Administrative Services Agency and SEK 5 million to the Swedish Tax Agency in 2021 for startup costs for the reform.

For 2022, the Government also proposes that resources amounting to SEK 37 million be allocated to the Legal, Financial and Administrative Services Agency’s administrative appropriations for its work on the new public retraining organisation. The Government also proposes that SEK 5 million be allocated to the Swedish Tax Agency’s administrative appropriations to carry out IT development for employer information to be provided to the Legal, Financial and Administrative Services Agency. Funds for the Legal, Financial and Administrative Services Agency are also planned for future years.

The proposal is in line with the social partners’ agreement reached between the Confederation of Swedish Enterprise, PTK (the council for negotiation and cooperation), manufacturing union IF Metall and Kommunal (the Swedish Municipal Workers’ Union) on security, retraining and employment protection.

The Government plans to return to the Riksdag in 2022 with a detailed proposal on how the support will be allocated.