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Short-term layoffs – strengthened support in 2020 for short-time work schemes

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In light of the COVID-19 virus, the Government on March 19 decided that its proposed additional amending budget for 2020 will include a supplementary system of support for short-time work schemes. The new system was presented on Monday by the Government, together with the Centre Party and the Liberal Party, and means that central government will take a greater share of the costs for short-time work in 2020. It is proposed that the new rules enter into force on 7 April, but that they apply from 16 March.

Short-term work involves employees temporarily reducing their working hours. The cost is divided between the employer, employee and central government. The new system 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.

During 2020, a temporary strengthening of this support – short-term layoffs – has been proposed, which means that central government will cover three quarters of the cost of staff reducing their working hours, while employers and employees share the remaining quarter, rather than central government covering a third of the cost.

Contrary to what applies in the current system, the new system means that, regardless of the general economic situation, an employer may be granted support upon submitting an application to the Swedish Agency for Economic and Regional Growth, which assesses whether the employer meets the requirements for the support and makes a decision on payment.

The Swedish Agency for Economic and Regional Growth will be allocated SEK 2.42 billion for 2020 to finance this support, after which time expenditures are expected to amount to SEK 350 million per year. It is proposed that SEK 20 million be injected into the Swedish Agency for Economic and Regional Growth for 2020 to enable it to quickly develop the required system support and process applications for support, after which time the task is expected to require SEK 8 million per year.

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