NEWS ALERT 5

April 3rd, 2020 

The purpose of this newsletter is to inform you about the possible implications that reduction in work hours and short term work (korttidsarbete) may have on your employees that hold work permits (arbetstillstånd). The term varies from country to country: in Sweden it is called korttidsarbete, while in other countries it is known as either furlough or temporary partial unemployment. 

Currently, there are no exemptions or allowances made by law for work permit holders due to Covid-19. According to Morgan Johansson, Minister of Immigration, there are no plans to grant any exceptions. 

Please note that companies with a collective agreement in place should contact the respective union(s) connected to that agreement for assistance. Companies without a collective agreement must negotiate the terms individually and collectively with the affected workers. 70% of the affected workers must agree in order for korttidsarbete to be enforceable. 

In short – What can’t be done! 

• Reducing wages without reducing hours; 
• Not providing the necessary four insurances; health insurance, pension,life and occupational injury (TFA). 

What to look out for! 

• Tillväxtverket, the government authority responsible for korttidsarbete, has warned that when applications open on April 7th, the system may become overloaded. 
• If your application is not granted, and you have already implemented a short term work program, you will be obligated to pay your employee’s full salaries even if your employees did not work full time. Nimmersion AB 

What to do! 

• If you intend to change any significant employment terms, we recommend that a new application is submitted on behalf of your employee to reflect those changes. This is in order to safeguard your employee’s eligibility to stay in Sweden.
  

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Scenarios 

1. Employer lowers the salary 

Lowering an employee’s salary, without first subjecting the new terms to a labour market test through the opinion of a relevant trade union, or without comparable deductions in working hours could lead to a rejected work permit when it’s time for a renewal. Lowering an employee’s salary without reduction of working hours, but still in line with collective agreements, should be supplemented with an additional work permit application if that application is not in line with their original employment terms, i.e. the base salary has gone down, not simply the hours/salary ratio has decreased. 

However, lowering a salary in line with hours worked does not affect the possibilities of retaining a work permit as long as the terms of the employment are on par with those set by Swedish collective agreements or which are customary within the occupation or industry and that the support requirement is fulfilled. That the support requirement is fulfilled means that the employee must earn at least SEK 13,000 per month. 

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2. Employer uses “Short term work allowance – korttidsarbete” 

Short term work (korttidsarbete) means that an employee’s hours are reduced for a limited period of time. This can be introduced under both a central collective bargaining agreement on the basis of agreement by the impacted employees under certain preconditions. The salary received will be lower, meaning that the employer’s employee costs can be reduced by 45-53% while the employee will receive approx. 90 percent of the wages. 

Again, reducing the work hours does not affect the possibilities of keeping an employee work permit as long as the terms of employment are on par with those set by Swedish collective agreements or which are customary within the occupation or industry, and that the support requirement is fulfilled. That the support requirement is fulfilled means that you must earn at least SEK 13,000 per month. When the Migration Agency reviews whether these requirements are met, an overall assessment is made. 

In the case of short term working arrangements, where an employee’s working hours are drastically reduced yet maintains 90% of their salary, such terms would be in-line with those set by Swedish collective agreement or which are customary within the occupation or industry. Furthermore, in order to be eligible for short term working arrangements, these arrangements must be entered into through a) the agreement of the relevant central collective bargaining agreement or the impacted employees under certain preconditions. 

The Migration Agency must be informed of any reduction of salary when it comes time to extend a work permit. A certificate that confirms the authorisation of short term work arrangements should also be attached.If your company does not have a collective agreement, you may use this template for agreement between the employer and employee. 

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3. Employer lowers the salary and then uses “Short term work allowance – 

korttidsarbete” 

Lowering an employers salary in such a way that it is not in-line with collective agreements may lead to a rejection of a renewal of the work permit when it’s time for an extension. Lowering an employers salary without reduction of working hours, but still in line with collective agreements, should be supplemented with an additional work permit application if that application is not in line with their original employment terms, i.e. the base salary has gone down, not simply the hours/salary ratio has decreased. 

Application for short term work arrangements does not adversely affect the possibilities of keeping a work permit as long as the terms of employment are on par with those set by Swedish collective agreements or which are customary within the occupation or industry. 

A combination of both lowering salary and short term work arrangements should be done in line with Swedish collective agreements or what is customary within the occupation or industry.

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Helpful link: 

https://tillvaxtverket.se/english/short-time-work-allowance.html

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As always, if you have questions about your current work permit holders and what can be done for them, please contact us at Nimmersion with by phone, +46 8 660 61 01 or at immigration@nimmersion.com 

Your sincerely, 

Nimmersion Immigration Team