Sweden HR Information

Updated on: 2025/03/11 04:48 (UTC)

Overview

There is no single Swedish labor code, and such terms and conditions of employment as minimum wage rates are governed to a large extent by collective bargaining agreements.

Sweden has been a member of the International Labor Organization since 1919 and has ratified 92 ILO conventions, 77 of which are currently in force. The conventions include those dealing with forced labor, freedom of association and the right to organize and bargain collectively, occupational safety and health and elimination of child labor.

Hiring

Employment Contracts

In Sweden, the employer in principle has the freedom to hire at will, although this independence is restricted to some extent by legislation on nondiscrimination, employment protection and public employment.

The employer must, within one week after the employee has commenced employment, inform the employee in writing of conditions of material importance to the employment relationship. Note: Effective June 29, 2022, this obligation was significantly expanded to require the provision of additional information about employment terms pertaining to topics such as work hours and termination.

Notwithstanding this provision, the decisive factor in determining whether an employment relationship exists is if the parties did in fact agree to enter into it. A contract of employment is considered to have been established when the party performing the work becomes part of an organizational structure established by the other party and when he or she is obliged to provide services to another in return for monetary reward and is subject to the direction or control of the other person concerning the way in which the work is done. A person who meets these criteria is considered an employee even if the parties to the contract call the relationship something other than an employment contract.

Swedish labor and employment law is concerned with contracts of employment, but not with contracts for the performance of work that is classified as a contract for services. Swedish law offers no definition of the concepts of employee or employer, and it has fallen to the courts to establish definitions of these terms. The distinction between contract of employment and contract for services is crucial not only for the applicability of labor legislation, but also for legislation such as social security and taxation.

Under the Employment Protection Act, contracts of employment are of indefinite duration. Fixed-term employment is allowed only under certain circumstances—for example, under a general fixed-term employment contract, for temporary substitute employment, for seasonal employment and when the employee has attained the age of 67. Employment under a fixed-term contract automatically transitions to indefinite employment if an employee has been employed for a total of more than two years during a five-year period.

Probationary contracts are allowed provided the probation period is not more than six months. Unless otherwise provided, probationary employment may be terminated before the expiration of the probation period. Collective agreements often contain provisions on probationary employment.

Although such situations are rare, if the employment contract contains rules specifying the scope of the employee’s duties, the employer is required to comply. The employer also cannot without the employee’s approval alter the employment contract unilaterally even if the change is more favorable for the employee. Within the boundaries of the employment contract, however, employees are subject to employer discretion except in cases of discriminatory or unfair treatment. This follows from the quite far-reaching employer prerogatives established at the beginning of the 20th century, involving the right to hire and fire at will and to direct and distribute work. Except in cases such as the Employment Protection Act’s establishment of a just-cause requirement for employee termination and the Discrimination Act’s prohibitions against discriminatory treatment, employers still enjoy their traditional prerogatives.

Employers generally can transfer employees from one job to another without employee consent or renegotiation of the employment contract. Significant changes in work assignments do sometimes require just cause and negotiation with the trade union, however. This is the case when the changes in responsibility are so substantial that the employee could be objectively considered to have been transferred into a new job even if the new responsibilities lie within the boundaries of the employment contract. An aggrieved employee can challenge the employer’s decision before a court, which can order that the employee be reinstated to the former position.

The overwhelming majority of employees in Sweden work under collective bargaining agreements. Under the contractual principle established by the Labor Court in 1929, employees are obliged to perform all types of work covered by the applicable collective agreement, leaving the employer considerable scope for transferring employees.

The 1995 Parental Leave Act contains rules on transfer with unchanged pay and other conditions when a female employee expecting a child is prohibited under the 1977 Work Environment Act from continuing her usual work or is unable to perform physically heavy work duties.

Restrictions on Hiring

The minimum working age is 18, although minors as young as 13 may be employed subject to certain restrictions.

Recordkeeping

All records related to payment of employees and employee working times must be retained for seven years.

Background Checks

The Swedish Personal Data Act generally prohibits employers from obtaining personal details about job applicants. Hiring a third party to do the background check does not alter the restrictions.

Noncompetition agreements

Swedish labor law allows employers to enter into post-termination restrictive covenants under certain conditions. Noncompete agreements generally must not exceed two years in length and should only be entered into with employees whose role in the company makes such restrictions necessary. Such covenants typically are unenforceable if the employee does not receive additional compensation or benefits for agreeing to sign the agreement.

Reference Citations

Employment Contracts: Employment Protection Act, 1982 (as amended), §§ 4-6

Restrictions on Hiring: Work Environment Act, 1977 (as amended), Ch. 5, §§ 1-3

Immigration and Work Permits

In General

Individuals who are citizens of countries outside the European Union or the European Economic Area who will be working in Sweden for more than three months must obtain both a work permit and a residence permit. Prospective employees must have a signed employment contract in order to be granted a work permit.

Work permits are valid for up to two years and renewable. Work permits are only valid for the position for which the application was originally made. If an employer wants to transfer a current employee to a different position, a new work permit must be applied for. If an employee’s work permit is valid for less than a year, he or she will not be eligible for social benefits and must acquire insurance coverage for illness, injury and other benefits through the employer.

An employer of non-EU/EEA nationals in Sweden can enter into an agreement with the Swedish Migration Board to become a certified employer, a status which can significantly cut processing time for work permit applications.

Visas and Work Permits

Employers planning to hire someone from outside the EU or the EEA for a job in Sweden are required to take the following steps before the prospective employee applies for a work permit:

• Advertise the position to allow Swedish, Swiss and EU/EEA residents to apply. The position must be advertised for 10 days on the Swedish Public Employment Service job bank and the European Job Mobility Portal. This requirement applies only to new employees.
• Provide terms of employment at least equal to those required by Swedish collective bargaining agreements or by custom in the particular occupation or industry.
• Offer a monthly pretax salary of at least 13,000 krona (taxable allowances and benefits received by a foreign worker—in addition to his or her base pay—can be included in the calculation as part of the foreign worker’s salary).
• Intend to provide insurance covering health, life, employment and pension insurance when the employee begins to work.
• Sign an employment contract and allow the relevant trade union to provide a statement of opinion regarding the terms of employment.

Employees must be able to support any family members who want to come to Sweden. This means that their income must be sufficient to cover the entire household’s housing and living expenses.

A citizen of a non-EU country may obtain a work permit while they are in Sweden only if:

• there is great demand for labor within the specific occupation;
• the employer has a critical need for this person’s skills, which means that the business cannot be run properly if the prospective employee has to travel to their country of origin to apply for a permit;
• the application is submitted during the visa exemption or validity period; and
• the reason for the person’s visit in Sweden is to meet with the prospective employer.

If the requirements stated above are not met, prospective employees must submit a work permit application from the country of origin or from the country where they have permission to live.

Work permits are valid for up to two years. Employees should apply for an extension of a work permit at least 30 days prior to the expiration of the current permit. If an employee has worked in Sweden under a valid permit for at least six months and requests an extension prior to the expiration of the current card, he or she may continue working while the Migration Board considers the new application. Employees who do not request an extension prior to the expiration of the current work permit are not allowed to work in Sweden until the extension is approved. The employer must provide the employee with a new job offer and a new statement from the relevant union for submission with the renewal application, but the position need not again be advertised.

Employees who do not meet the requirements for a permanent residence permit after having had a work permit for four years can instead get an extended residence permit for another two years.

Work permits are only valid for the position for which the application was originally made. If an employer wants to transfer a current employee to a different position, a new work permit must be applied for.

If an employee’s work permit is valid for less than a year, he or she will not be eligible for social benefits and must acquire insurance coverage for illness, injury and other benefits through the employer.

Non-EU/EEA managers, specialists or interns transferring from outside the EU to work in Sweden within the same corporate group may apply for a new intracorporate transfer (ICT) work and residence permit. The ICT work permit holder can work at a company of the same group in Sweden for up to 90 days without obtaining a separate permit. For assignments of more than 90 days in Sweden, the ICT permit may apply for a work and residence permit for long-term mobility.

Certified Employers. An employer of non-EU/EEA nationals in Sweden can enter into an agreement with the Swedish Migration Board to become a certified employer, a status which can significantly cut processing time for work permit applications (to five days).

To qualify for certification, an employer must:

• be registered in Sweden and have a Swedish organization registration number,
• submit at least 25 applications for work permits annually,
• assume responsibility for direct submission of applications (by securing powers of attorney from prospective employees) and
• submit applications online.

The application for certification must include:

• the employer’s name, registration number, address, telephone number and e-mail address;
• a contact person;
• SNI code and details of the industry the employer operates in and its principal activity;
• number of employees;
• number of work permit applications submitted during the past year and
• information about collective bargaining agreements to which the employer is a party.

Certification once given continues as long as the employer meets the criteria and need not be renewed.

Post-Entry Requirements

The Swedish Tax Agency must be notified of the employment of any non-EU/EEA national and supplied with the following information:

• employee’s name, address and personal identity number;
• employer’s name, address and Swedish corporate identification number; and
• the period for which the employee will be employed.

The notification should be made by the 12th of the month following the month during which employment began. Noncompliance with the notification requirements is considered a criminal offense.

The employer also must keep documentation of the employee’s right to reside and work in Sweden for the entire period of employment and for 12 months after employment has ended.

Residence permits. If a work permit is valid for at least three months, the holder will also receive a residence permit card, which serves as proof of his or her right to be in Sweden and must be shown on entering the country. The residence card contains a microchip holding a photograph of the individual and copies of his or her fingerprints. Individuals who do not require a visa to travel to Sweden, which includes U.S. nationals, must be photographed and fingerprinted after their arrival in Sweden, which can be done at any office of the Swedish Migration Board. Residence permit cards are valid for up to five years, and a holder must once again be photographed and fingerprinted when a new card is issued.

An individual who has been resident in Sweden for at least four years can apply for a permanent residence permit, which will remain valid for as long as the individual remains in Sweden.

If family members will be accompanying the employee to Sweden, their residence permits can be applied for at the same time the prospective employee makes application for a work permit. Eligible family members include spouses, common-law spouses, registered partners and unmarried children under age 21. If the employee’s work permit is valid for at least six months, family members may also obtain work permits. If family members apply for residence at a later date, each must submit an Application for Permit for Family Members of Employees.

Registration of foreign employees. Foreign employers are required to report to the Swedish Work Environment Authority all postings of non-Swedish employees that will exceed five days. The report must be made at the latest on the day the employee begins work in Sweden.

Changes to the information reported must be communicated to the Work Environment Authority within three days.

The contact person must have access to documentation proving the employer has complied with requirements of the Foreign Posting of Employees Act.

Failure to report a posting and a contact by the required date can result in a fine.

Employers must notify the Swedish Migration Agency if working conditions for a job change for the worse. Employers that do not report changes in working conditions may be subject to a fine.

Reference Citations

Immigration and Work Permits: Aliens Act (2005)

Nondiscrimination

In General

The 2008 Discrimination Act prohibits discrimination on the grounds of gender, sexual identity or expression, ethnicity, religion or other belief, disability, sexual orientation or age. The act protects not only employees but also job applicants and persons making an informal inquiry about a job. The statute is closely linked to European Union nondiscrimination legislation.

Employers must identify possible discrimination risks in the organization and develop an action plan to eliminate such risks. Establishments with 25 or more workers must conduct a review every three years that compares salary differences between men and women. Employers are obliged to close any unexplained gaps in salaries.

An employer found guilty of discrimination by a court is liable for financial damages and in some instances general damages. The concept of punitive damages is not developed in Swedish law, but courts will award more than compensatory damages when the violation or offense is out of proportion to the slight monetary damage caused. Swedish law does not provide for remedial action on the part of the employer, such as job placement or reinstatement of the person discriminated against.

Part-time and fixed-time employees are not covered by the Discrimination Act, but are protected by the 2002 Prohibiting Discrimination Against Part-Time Employees and Fixed-Time Employees Act, which contains rules on employment protection rather than protection against discrimination on grounds of personal identity.

EU Pay Transparency Directive: As a member state of the European Union, Sweden has until June 2026 to transpose the minimum requirements of the EU Pay Transparency Directive into its national law or amend any current pay equity laws to conform with the directive, which aims to promote pay equity between men and women. The directive introduces requirements on gender pay gap reporting, salary history bans during the hiring process, and wage disclosure in job vacancy listings. The national law may go beyond the minimum requirements of the directive, but the law may not directly conflict with the directive requirements.

Reference Citations

Nondiscrimination: Discrimination Act, 2008, Chs. 1-2

Employee Privacy

Employee Data

On May 25, 2018, the General Data Protection Regulation (GDPR) superseded the Data Protection Directive as the primary law governing data privacy in the EU. The GDPR establishes minimum requirements for the processing of employee data and allows EU member nations to introduce more restrictive local legislation. Stricter requirements can also be established in collective bargaining agreements or work contracts. For more information, see the In Focus: International Privacy Laws.

The Swedish Data Protection Regulation contains supplementary provisions to the GDPR.

Employee Monitoring and Surveillance

Employees must be given notice when surveillance cameras will be used in the workplace. Cameras should be positioned so that they do not record more than is necessary for their intended purpose.

The use of the recorded material must be limited to the intended purpose. Employers must periodically check if the conditions that justified the surveillance have changed and must halt such monitoring if the issues have been addressed.

Reference Citations

Employee Data: General Data Protection Regulation, 2016; Regulation (2018: 219) with Additional Provisions to the EU Data Protection Ordinance (Swedish)

Employee Monitoring and Surveillance: General Data Protection Regulation, 2016; Regulation (2018: 219) with Additional Provisions to the EU Data Protection Ordinance (Swedish)

Compensation

Hours of Work

Regulation of the duration and scheduling of work hours for the protection of employees is set out in the 1982 Working Hours Act. To a large extent, however, working time is regulated in collective agreements, although these cannot provide less favorable conditions for employees than those required under the European Community Directive on working time (2003/88/EC).

In general, an eight-hour day is the norm, and regular working hours may not exceed 40 per week. Employees are entitled to at least 11 hours of rest between working days and at least 36 hours each week. If daily work exceeds five hours, employees are entitled to a rest break.

Minimum Wage

There is no national minimum wage in Sweden. Employee compensation is determined by collective agreements and personal contracts in accordance with various systems for different areas of the labor market. Normally, collective agreements specify minimum rates that must be paid in all circumstances to various categories of employee.

Overtime

Overtime is permitted to a maximum of 48 hours during a four-week period or 50 hours per calendar month but cannot total more than 200 hours per 12-month period.

Overtime is generally paid for work done on days or during hours not normally worked. Collective bargaining agreements generally set the overtime premium at 50 percent or 100 percent of the ordinary hourly wage. Many collective agreements allow employees to opt for time off in lieu of compensation for overtime worked.

Overtime pay and shift premiums are normally not paid simultaneously.

Wage Payments

Wage payment requirements are determined through collective bargaining agreements for most working class jobs, though monthly compensation is commonplace.

Most white-collar workers are compensated monthly, or every four weeks. Wages are set individually throughout nearly the entire labor market.

Mandatory Bonuses

Sweden’s labor laws do not address bonuses.

Reference Citations

Hours of Work: Working Hours Act, 1982 (as amended), §§ 5-9

Overtime: Working Hours Act, 1982 (as amended), §§ 7-9

Benefits

Vacation

The Vacation Act provides that employees are entitled to 25 working days, equivalent to five weeks, of annual vacation. While on vacation, an employee is entitled to holiday pay to the extent it has accrued during the qualifying year. The qualifying year begins on April 1 and runs to March 31 and is the corresponding 12-month period directly preceding the holiday year. Thus, the right to receive holiday pay must first be earned during a qualifying year.

The entitlement to vacation applies even during the first year of employment, although if the employment commences after Aug. 31, the employee is entitled to only five days of vacation during the first holiday year. An employee may waive entitlement to annual leave that is not combined with holiday pay.

It is common, however, for the rules governing holiday year and qualifying year to be amended by a sectoral collective agreement so that the calendar year is applied instead and the qualifying year and the holiday year coincide, so vacation is earned the same year it is taken.

In principle, the employer is entitled to decide when employees will take annual vacation with the exception that at least four continuous weeks must be provided in a single uninterrupted block during June, July or August. The timing of annual vacation must be subject to negotiation between the employer and the trade union, however, and the parties to an employment contract (employer and employee) or a collective agreement (employer and union) are free to agree that vacation should be taken in other months.

Vacation pay is intended to constitute 12 percent of all pay an employee earns during the qualifying year.

Employees accrue vacation pay during certain periods of absence during the qualifying year—for example, during an absence due to illness not exceeding 180 days, during a period of parental leave not exceeding 120 days, while taking education leave not exceeding 180 days and during military training not exceeding 60 days.

An employee with more than 20 days of accrued leave may carry forward one or more days for up to five years after the qualifying year.

If employment is terminated before an employee uses accrued vacation, the employee is entitled to payment in lieu of vacation. Unless the employee agrees, an employer may not schedule vacation leave during a period of notice of termination.

Holidays

Employees are entitled to the following 13 paid public holidays:

• Jan. 1: New Year’s Day
• Epiphany
• Good Friday
• Easter
• Easter Monday
• April 30: Walpurgis Night
• May 1: Labor Day
• Ascension
• June 6: National Day
• Whit Sunday
• June 21: Midsummer Day
• Nov. 1: All Saints’ Day
• Dec. 24: Christmas Eve
• Dec. 25: Christmas
• Dec. 26: Boxing Day

Public holidays that occur on a weekend remain on that day. Swedish law contains no provisions on overtime pay for hours worked on a public holiday.

Maternity Leave

Employees are entitled to be on parental leave until the child is 18 months old. In addition, parents are jointly entitled to 480 days of compensation from the state when a child is born or adopted. Additional days are granted for multiple births. The leave entitlement can be shared equally between both parents, with the exception of 90 days.

The mother can receive paid parental leave from the period starting 60 days prior to the expected birth of the child until the child turns 12 years old, but only 96 days may be used after the child reaches the age of 4.

Parents also have the right to reduce their normal working time by up to 25 percent until the child turns eight.

Employees seeking to take parental leave must notify their employers at least two months before the leave. Employers are prohibited from discriminating against job applicants or employees for reasons related to parental leave rights.

Transferable Parental Leave: Effective July 1, 2024, Sweden’s parental leave system permits parents to allocate a portion of their leave to close relatives, friends, and others. Under amendments to the Social Insurance Code, both parents can concurrently stay at home with a child for 60 days, doubling the previous allowance of 30 days. A parent may submit written notice to the Social Insurance Agency allowing them to transfer their parental benefits to another caregiver who is covered by the social insurance system. Custodial parents have the ability to reallocate 45 days each, and a sole custodian can assign up to 90 days from the entire 480-day allowance to an individual covered by the social insurance system.

Paternity Leave

Fathers are entitled to be on parental leave until their child is 18 months old. In addition, both parents are jointly entitled to 480 days of compensation from the state when a child is born or adopted. Additional days are granted for multiple births. The leave entitlement can be shared equally between both parents, with the exception of 90 days.

In addition to the parental leave, the father is entitled to 10 extra days of paid leave in connection with the birth, 20 days for multiple births. Fathers can receive compensation from the state until the child turns 12 years old, but only 96 days may be used after the child reaches the age of 4. Fathers also have the right to reduce their normal working time by up to 25 percent until the child turns eight.

Fathers seeking to take parental leave must notify their employers at least two months before the leave. Employers are prohibited from discriminating against job applicants or employees for reasons related to parental leave rights.

Sick Leave

Employers must pay sickness benefits for the first two weeks of an employee’s absence at a rate of 80 percent of the employee’s salary. If the period of absence lasts longer than two weeks, sickness benefits are paid by the Social Insurance Agency.

Employees are protected from dismissal on the grounds of illness.

Other Leave

Employees may be entitled to various other kinds of leave, either under law or under the terms of a collective bargaining agreement, including:

• leave for taking care of close relatives or for urgent family reasons,
• leave for immigrants to study Swedish,
• leave to start a new business,
• leave for job-hunting,
• leave for holding elected political office,
• leave for school activities,
• leave for military service,
• leave for the funeral of a close family member,
• leave for the employee’s own 50th birthday and
• leave for marriage.

Under the 1974 Study Leave Act, employees have a right to unpaid leaves of absence for study purposes when certain conditions are present. The study must be systematic but may be unrelated to the employee’s current work. The employee has an unconditional right to resume former employment, either the same job or an equivalent one, after completion of the studies or at an earlier date.

Pensions and Social Security

The legal retirement age is 65.

Employers are required to pay a social insurance contribution for employee pension and health insurance at a rate of 31.42 percent of an employee’s gross salary. Employers are required to make these payments for any employee or contractor who earns 1,000 krona or more per year. For employees under age 26, employers pay a reduced social security contribution rate.

There is no ceiling on employer contributions to the social security system. Employee contributions of 7 percent of wages or salaries, however, are capped at an amount adjusted annually.

As a general rule, collective agreements provide that employers take out additional insurance for their employees covering such benefits as supplementary pensions and group insurance.

Workers’ Compensation

Employers injured in the workplace are compensated through their workers’ compensation insurance fund.

Employers must notify the Swedish Work Environment Authority, which is in charge of workplace safety and compliance, when there has been an accident or other situation that has resulted in death or severe injury to an employee or employees. Violations of the law or failure to correct deficiencies can result in fines or in very serious cases imprisonment.

Employers are responsible for contributing social insurance payments based on total employee payroll. The contribution total is 31.42 percent, including a workers’ compensation fee of 0.3 percent.

Reference Citations

Vacation: Annual Leave Act, 1977 (as amended), §§ 4-18

Holidays: Public Holidays Act, 1989, §§ 1-2 (Swedish)

Maternity Leave: Parental Leave Act, 1995 (as amended), §§ 1-7; Social Insurance Act, 2010 (as amended) §§ 15, 41g

Paternity Leave: Parental Leave Act, 1995 (as amended), §§ 1-7; Social Insurance Act, 2010 (as amended) §§ 15, 41g

Sick Leave: Sick Pay Act, 1991 (as amended), §§ 3-10 (Swedish)

Other Leave: Study Leave Act, 1974, §§ 3-10

Labor Relations

In General

Swedish law guarantees the right of peaceful assembly and association, including the right to form and join (or not join) trade unions.

An employer is obligated to negotiate with a union to which it is bound by a collective agreement before making certain decisions, such as reduction of personnel, hiring a managing director or implementing significant alterations to its activities or the working or employment conditions for employees who belong to the union. Unions in the private sector that have entered into collective agreements with employers of at least 25 employees have the right to representation on boards of directors.

A party planning industrial action (strike or lockout) must give notice at least seven working days in advance to both the opposing party and the National Mediation Office.

When ownership of a business is transferred, the successor employer becomes responsible for its predecessor’s duties under an existing collective agreement.

Labor relations in contemporary Sweden have evolved directly from decisions made early in the last century. The 1906 December Compromise is the foundation of Swedish industrial relations, and its principles are still valid, while the Basic Agreement signed in December 1938 is still in force and is the starting point of the so-called “Swedish Model.”

The December Compromise and the Basic Agreement are based on cooperation and initiated a tradition of self-regulation, mutual recognition, and mutual acceptance of certain basic rules for cooperation and coexistence, as well as union acceptance of certain employer prerogatives. These elements form the Swedish Model, under which employers and employees negotiate in common the conditions of the labor market.

Right to Organize

The 1974 Instrument of Government protects the freedom of association from government interference, and the 1976 Co-Determination Act provides the positive right of association for both employers and employees—in other words, the right to become a member and act on behalf of a trade union or employer association.

The 1950 European Convention for the Protection of Human Rights and Fundamental Freedoms, enacted as law in Sweden by the 1994 Swedish Human Rights Act, guarantees the right of peaceful assembly and association, including the right to form and to join (or not to join) trade unions. Violating an employee’s right of association can subject an employer to damage claims from both unions and individual employees, and dismissal of an employee for exercising his or her right of association can be declared invalid.

Works Councils

No statutory rules on cooperation between employer and employees exist under Swedish labor and employment law. The mechanisms for formal interaction are instead primary negotiations and access to information according to the 1976 Co-Determination Act. Transnational employers, however, may be covered by the 1996 European Works Councils Act, which requires the formation of a works council or of an information and consultation procedure.

Dispute Resolution

Swedish labor and employment law recognizes three different types of collective negotiations:

• Agreement-linked negotiations occur when parties seek to settle an undecided issue, such as pay or general employment conditions, through collective bargaining. The subject matter of these negotiations is the widest possible and covers all questions relating to the relationship between employers and employees and their union.
• Co-determination negotiations are required when an employer wishes to take action that would cause a significant change in the company’s activities or employment conditions.
• Dispute negotiations concern disagreements regarding the interpretation or application of collective agreements. It is not unusual for these disagreements to proceed to court, although the parties are required to attempt negotiating their differences before a court will hear the grievance.

The Co-Determination Act establishes an employer obligation to negotiate with a union to which it is bound by a collective agreement before making certain decisions such as reduction of personnel or hiring a managing director, so-called primary negotiation. Negotiations are required before any significant alteration of the employer’s activity or the working or employment conditions for employees who belong to the union. The aim of the primary right to negotiation is to force employers to listen to and take into consideration the wishes of the employees. The employer is obliged to negotiate even in matters not involving significant alterations if the request to negotiate comes from the trade union to which the employer is bound by a collective agreement.

Collective agreements are of paramount importance. Given Sweden’s high unionization rate—currently about 71 percent, still high but down from a peak of 86 percent in 1995—and the fact that most employees work for employers that are parties to collective agreements or members of organizations that have signed such agreements on their behalf, the overwhelming majority of Swedish employees are covered by collective agreements. A collective agreement is legally binding on the parties to the agreement and on those the signatory parties represent.

The terms of collective agreements are mandatory for employers and employees covered. Industrywide collective agreements often provide binding minimum standards but allow deviations by collective agreements covering a specific workplace or under individual contracts. Although this is not guaranteed under law, in most instances the parties to a collective agreement have an understanding that the employer must provide nonmember employees no less in benefits than the agreement provides for those directly covered by it.

The Board Representation Act entitles unions in the private sector that have entered into collective agreements with employers of at least 25 employees to representation on boards of directors. The main objective of such representation is to provide employees with comprehensive information.

Strikes and Lockouts

The right to strike is protected by Sweden’s constitution but it can be limited by legislation or collective agreement. A party planning industrial action must give notice of such action at least seven working days in advance to both the opposing party and the National Mediation Office. A strike cannot be called to change the terms of a prevailing collective agreement.

Successorship Clauses

In cases where a business is sold or transferred, the successor employer becomes responsible for its predecessor’s rights and duties towards the employees under the collective agreement.

Reference Citations

Right to Organize: Co-Determination Act, 1976, §§ 7-9 (Swedish)

Dispute Resolution: Co-Determination Act, 1976 § 66 (Swedish)

Strikes and Lockouts: Constitution of Sweden, Instrument of Government, 1974, art. 14

Successorship Clauses: Co-Determination Act, 1976, § 28 (Swedish)

Safety, Health and Security

In General

Employers and employees are expected to cooperate in maintaining workplace safety. Regulation is largely the responsibility of public authorities, but the primary responsibility for maintaining a safe working environment rests with employers. Employees and their representatives also participate, and employees have a duty to strive for a safe working environment, to follow safety regulations and to use safety equipment. Employers are responsible for rehabilitation of employees with medical or other problems and for continuous efforts to adjust work to the needs, prospects and capabilities of employees. Employers with 50 or more employees are required to establish a joint employer/employee safety committee.

Employers must notify the Work Environment Authority when there has been an accident resulting in death or severe injury to an employee.

Workplace Safety and Health

The 1977 Work Environment Act defines working environment in the widest possible way and includes all conditions at places of work. The act applies to the physical health and safety of employees as well as psychological conditions.

The act establishes four policies for workplace safety:

• Employers, employees and society at large are expected to cooperate in maintaining workplace safety, and the act provides mechanisms to institutionalize forms of collaboration. Regulation is largely the responsibility of public authorities, but the primary responsibility for maintaining a safe working environment rests with employers. Employees and their representatives also participate, and employees have a duty to strive for a safe working environment, to follow safety regulations and to use safety equipment.
• Efforts to provide a satisfactory working environment must be carried out in a systematic and orderly way. Administrative systems in conjunction with action plans are often required to achieve this goal. Follow-up procedures are equally important.
• Employers are responsible for rehabilitation of employees with medical or other problems and for continuous efforts to adjust work to the needs, prospects and capabilities of employees.
• Efforts to promote a healthy environment should be future-oriented. Prevention is considered a necessary and indispensable element in all planning at workplaces, in particular when new buildings and worksites are planned or when new technology is considered.

The Swedish Work Environment Authority is the administrative agency responsible for carrying out workplace inspections. The authority is charged with ensuring compliance with work environment and working hours laws and regulations in all workplaces, except for work performed on board ships. Maritime compliance is the responsibility of the Swedish Transport Agency. Notice of an upcoming inspection is usually given in writing or by telephone, but the law allows inspectors to arrive unannounced.

Employers must notify SWEA when there has been an accident or other situation that has resulted in death or severe injury to an employee or employees. Violations of the law or failure to correct deficiencies can result in fines or in very serious cases imprisonment.

Safety committees and representatives. The safety committee is a joint body mandated by the act at all places of work with 50 employees or more. Additional safety committees can be set up at larger workplaces.

In addition to the safety committee, protection of employees is the responsibility of safety representatives, who are nominated by the unions having a collective agreement with the employer. Safety representatives are entitled to full pay during time off required for performing their duties. The act does not prescribe the number of representatives, leaving that to the employees to determine, but the number must not exceed the needs. If the number of representatives is contested (which virtually never occurs), the Work Environment Authority decides what number is appropriate. One (or several) representative will serve as safety officer. Regional (union) safety representatives attend to the smallest places of work where there is no representative delegate. Representatives take part in everything relating to the working environment.

Significantly, a safety representative has the power to interrupt operations when the work entails immediate and serious risks to the life or health of an employee. Employers are obliged to comply with such orders. The interruption of operations is provisional until the Work Environment Authority has decided on the matter.

Drug and Alcohol Use

Sweden’s labor laws do not address drug and alcohol use.

Reference Citations

Workplace Safety and Health: Work Environment Act, 1977 (as amended), Ch. 3

Monitoring and Surveillance of Employees: Work Environment Act, 1977 (as amended), Ch. 3, § 2a

Termination

Termination by Employer

Under Swedish law, employers have a responsibility to assist employees in correcting an unsatisfactory employment relationship. Termination of employment is considered a last resort.

A notice of termination of indefinite employment from the employer is lawful only if based on just cause. As refined by case law generated by the Labor Court, the definition of just cause for employment termination includes redundancy, business necessity and reasons related to the individual employee.

Fixed-term employment expires without prior notice at the end of the period of the contract, and an employer can require that an employee leave employment at age 67 or upon entitlement to a full indefinite disability pension under the 1962 National Insurance Act.

Redundancy constitutes just cause for termination and is defined to include both situations involving actual shortage of work and those where termination of employment results from an employer’s managerial decision, i.e., for economic, technical, organizational and similar reasons. Unless there is reason to suspect the notice of termination is due not to redundancy but related to the individual employee concerned—“fictitious redundancy”—the courts do not examine the business motives of the employer.

The Employment Protection Act contains detailed provisions regarding the order of selection for employees to be laid off. The ranking is based on length of employment (seniority), although collective bargaining agreements can establish different criteria.

Laid-off employees have the right to be recalled to their previous positions within nine months if the employer’s circumstances change. The order of recall, like the order of termination, is based on seniority.

When the employer gives notice of termination, whether it is due to redundancy or personal reasons, the required notice period varies according to the employee’s continuous length of employment, beginning at one month for less than two years of employment and increasing to a maximum six months for at least 10 years of employment. Before giving notice of termination, the employer must under certain circumstances notify the employee and the local trade union of which the employee is a member. Under the Employment Protection Act, notice of termination either due to redundancy or for personal reasons may not be based solely on circumstances of which the employer has been aware for more than two months. Employment continues throughout the notice period, and the employee must be at the employer’s disposal to perform assignments.

The rules governing termination based on personal reasons differ in important ways from those applicable to termination because of redundancy. There are different requirements for notification and consultation prior to any termination, for example, and an employee terminated for personal reasons has no preferential right to be taken back into employment with the same employer. In addition, when termination is based on personal reasons rather than redundancy or other business motives, a court will make a comprehensive assessment in which the opposing interests of the two parties are weighed carefully against each other.

When reviewing a termination, the courts make an overall assessment of all relevant factors, such as length of employment, previous conduct, prior warnings, rehabilitation efforts and prospects for satisfactory employee performance in the future. The nature and extent of the employee’s misconduct determines whether the breach of the employment agreement is sufficiently serious to justify termination. Of very great importance is whether the employee has a position of trust and whether the misconduct is intentional or unintentional, particularly in cases of theft, embezzlement or violence.

Whistleblowing. On Sept. 29, 2021, Sweden passed a statute that strengthened the country’s whistleblower protection framework and transposed the EU Whistleblowing Directive into national law. Covered employers must:

• establish a whistleblowing program,
• notify employees about the program,
• create whistleblowing channels for employees, and
• enable reporting in written or oral form.

The law protects from reprisal employees who report about serious misconduct in a work-related context. The protection extends to individuals who assist the reporting person as well as legal entities connected to the reporting person. Employers that retaliate against whistleblowers can be held liable for damages.

From July 17, 2022, employers with at least 250 employees must be in full compliance with the new whistleblowing law. From Dec. 17, 2023, the requirement extends to employers with 50-249 employees.

Termination by Employee

When an employee terminates employment, the statutory notice period is one month.

Plant Closings and Mass Layoffs

Employers must notify the Swedish Public Employment Service if they plan to lay off five or more employees due to shortage of work.

Payment on Termination

There is no statutory requirement for employers terminating employees’ contracts to make any severance or redundancy payments, but such payments may be stipulated in the individual contract.

Unemployment Insurance

Sweden’s unemployment insurance program has two layers: basic coverage and a voluntary unemployment benefit. Basic insurance is compulsory and is given to anyone over the age of 20 who meets the “basic conditions” and the “work conditions.”

To fulfill the basic conditions, the individual must be:

• entirely or partially unemployed,
• fit to work at least three hours a day and 17 hours a week,
• willing to accept a suitable job,
• registered at a public employment service and
• actively seeking work.

The requirements for meeting the work conditions are:

• having worked at least 80 hours over six months during the last 12 calendar months and
• having worked 480 hours during six consecutive months for a minimum of 50 hours every month.

Reference Citations

Termination by Employer: Employment Protection Act, 1982 (as amended), §§ 7-22

Termination by Employee: Employment Protection Act, 1982 (as amended), § 11

Personal Taxes

Residency Requirements

An individual is treated as resident in Sweden and subject to unlimited tax liability if he or she:

• has a principal place of abode in Sweden,
• is physically present in Sweden for more than 183 days during a 12-month period or
• maintains an “essential tie” with Sweden and has previously had the principal place of abode in Sweden.

To determine whether the individual has maintained an essential tie with Sweden after the change of residency, all relevant factors must be weighed on a case-by-case basis. The burden of proof lies with the taxpayer to show no essential tie exists.

Taxable Income

Employment income includes all salaries, wages, pensions, vacation pay, benefits (whether in cash or in kind), bonuses and other payments resulting from the employment relationship. Residents are taxed on their worldwide income.

Special tax regime for key personnel: Foreign experts, researchers, executives and other key persons working in Sweden on temporary assignment can qualify for a 25 percent tax exemption, i.e., only 75 percent of their employment income constitutes taxable income. In addition, certain expenses, such as relocation costs and school fees and tuition paid by the employer, do not constitute benefits in kind and consequently are not taxable items. These special benefits apply to individuals who are not Swedish nationals and who have not been residents of Sweden any time during a five-year period prior to taking up the Swedish assignment. The assignment may not exceed five years and the special regime is limited to the first three years of the assignment.

Tax Rates

Income tax rates are levied on a progressive scale for residents, with rates ranging from zero to 25 percent.

In addition to federal income tax, municipal income taxes are assessed by each municipality of Sweden.

Nonresidents working in Sweden are taxed at a flat rate of 25 percent. A lower flat income tax rate of 15 percent is assessable on eligible nonresident athletes, artists, and sailors.

Employees also are responsible for paying 7 percent of taxable income for pension insurance, as well as less than 0.05 percent of their account values in administrative fees. The maximum calculated contribution is 32,000 krona.

Employers are responsible for contributing social insurance payments. The total social insurance contribution rate that employers are assessed on wages paid to their employees is based on the ages of the employees to whom wages were paid.

Reference Citations

Tax Rates: Tax Tables

Web References

In English unless otherwise noted.

Law and Regulation

Annual Leave Act

Discrimination Act

Employment Protection Act

Foreign Posting of Employees Act (Swedish)

Ordinance on Reporting Foreign Postings (Swedish)

Parental Leave Act

Public Holidays Act (Swedish)

Sick Pay Act (Swedish)

Work Environment Act

Government Websites and Publications

Swedish Employment Exchange Agency (Swedish)

Swedish Labor Court

Swedish Migration Board

Swedish Parliament

Swedish Social Insurance Agency (Swedish)

Swedish Tax Agency (Swedish)

Swedish Work Environment Authority (Swedish)

Other Websites and Publications

Confederation of Swedish Enterprise

Council for Negotiation and Cooperation (Swedish)

Index of Economic Freedom

Public Employees’ Negotiations Council

Swedish Confederation of Professional Associations

Swedish Confederation for Professional Employees (Swedish)

Business Sweden

Swedish Trade Union Confederation