The Swedish government has presented a new proposal to financially support short-term work to help companies who struggle financially during the current COVID-19 crisis. This article aims to inform the companies about what they need to know in this regard.
Background to short-term work
The presented measures are proposed to come into force on April 7, 2020 but will be applicable retroactively from March 16, 2020 and valid throughout 2020. The support can be applied for a six-month period with the possibility to apply for a three-month extension.
The measures are based on a previously proposed scheme for short-term work, but the degree of subsidy is greatly increased. The government’s share of the cost, within a framework for compensation, is increased from one-third to three-quarters of the cost. The proposal means that the employer's salary costs can be halved while the employee still receives more than 90 percent of the salary. An income ceiling of SEK 44,000 per month is proposed. The Swedish Agency for Economic and Regional Growth (Sw: Tillväxtverket) will be responsible for handling applications and deciding on support for short-term leave.
Which companies can apply for the compensation?
Companies will need to show temporary and serious financial difficulties in coping with the challenges that have arisen in the wake of the COVID-19 crisis that these difficulties are caused by circumstances beyond the employer's control, specifically affecting the company's operations.
Under what conditions can a company seek compensation?
Which employees are eligible for the compensation?
What does the application process look like?
The Swedish Agency for Economic and Regional Growth will provide continuous information on the application process. Support can be provided if the listed conditions are fulfilled and will be paid after the Growth Agency has approved an application. Applications will be handled promptly. Upon approval, the employer is obliged to provide a reconciliation within a certain time to determine final support. If rejected, a decision may be appealed to the Administrative Court.
We stay updated on the framework for the short-term leave and we are in continuous contact with the Agency for Economic and Regional Growth. Although applications do not open until April 7, there are several preparatory measures that can be taken now. KPMG can assist with: