Employ Candidates Compliantly in Sweden

Get Express Quote
  1. Overview: Sweden
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
Other counrtries

Global HR Compliance in Sweden

If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Sweden Guide below will help you understand the nuances of labor legislation in the country.

When the company is planning to enter a new foreign market of Sweden and has a need to employ a local national there, the first question to answer is how it is going to make local hires.

We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.

This solution helps you employ your global sales force in Sweden as well as in other countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.

Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.

So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Sweden instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.

Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.

Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Sweden .

We are experts in global workforce employment in Sweden, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.

Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.

With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Sweden.

Hiring and Firing Workforce in Sweden Guide

Employment Agreements

Fixed-term contracts. An employment contract for a fixed term may be concluded:

  • For a general fixed-term employment
  • For a temporary substitute employment
  • For a seasonal employment and
  • When the employee has attained the age of 67.

Generally, an employee cannot be employed on a temporary basis for more than two years.

Collective agreement. Collective agreements are common in all industries. Employers are also highly organised and the vast majority of Swedish workplaces are bound by collective agreements.

Permanent employment contracts (terms of agreement and time limitations). Employment contract shall contain at least the following particulars:

  1. The names and addresses of the employer and employee, the commencement date of the employment and the workplace
  2. A short specification or description of the employee’s duties, occupational designation or title
  3. Whether the employment is for a fixed or indefinite term or whether it is probationary and
  4. With respect to indefinite-term employment: the periods of notice applicable
  5. With respect to fixed-term employment: the final date of employment or the conditions governing its termination, and what form of fixed-term employment the employment refers to
  6. With respect to probationary employment: the length of the probationary period
  7. The starting rate of pay, other employment benefits and the intervals at which the pay is to be paid
  8. The length of the employee’s paid annual leave and the length of the employee’s normal working day or working week
  9. The collective bargaining agreement applicable, where relevant.

Employment Termination and Severance Pay (Dismissal)

Employees are entitled to resign at any time, for any or no reason, observing the applicable notice period. They are also entitled to resign immediately without notice if the employer has grossly neglected its obligations to the employee.

Employer decision. Dismissals by an employer must be based on objective grounds (so-called “just cause”). Just cause can either be based on:

  • Redundancy: economic, technical, or other organizational grounds or
  • Personal reasons: grounds relating to the individual employee’s performance or behavior, such as serious or repeated misconduct or disloyalty.

There is not just cause if the employer can relocate the employee within the business. The employer does not need to implement a new role even if it is possible, however, the employer must investigate whether there are any vacant positions that the employee can be offered.

Mutual agreement. An employer and employee may terminate the employment relationship by mutual agreement, and no particular statutory requirements apply in such cases.

Differences between terminating cooperation with locals and expats. If foreign employee resigns or gets laid off the following applies: If you resign from your job or get laid off, you are permitted to remain in Sweden and apply for a new job for three months. You will need to have a valid residence permit during that period. If your permit is going to expire soon, you may submit an application for the extension of your residence and work permit. You will need a job offer in order to apply for an extension.

When you apply for work, you need to include copies of documents which show that you have the right to stay and work in Sweden. You must also bring your residence permit card with you. The employer will want to know for how long you have the right to work in Sweden and if there are any limitations to your permit.  Your new employer will require a copy of these documents and will notify the Swedish Tax Agency of your employment.

If you get a new job and have had a work permit for less than 24 months, you must apply for a new work permit. If your new job involves a change of occupation or profession, you will need to submit a new application, no matter how long you have previously held a work permit. Once you have submitted your application, you are permitted to begin working before receiving a decision, provided that you submitted your application before the previous permit expired. Your new employer must have advertised the position in Sweden and within EU/EES and Switzerland before you begin working.

If you are unable to find a new job within three months, the Swedish Migration Agency can revoke your permit.

It is prohibited to dismiss

The employer shall have just cause for dismissal with notice and legal grounds for immediate dismissal (without notice). Employment protection in Sweden is very strong and the risk for the employer is therefore significant in case of wrongful dismissals.

Employees with reduced ability who have enjoyed certain adjustments of work, and employees on parental leave, enjoy special protection in connection with dismissal due to redundancy. The local trade union has a right to protect its elected local representative under certain circumstanced in relation to redundancy dismissals.

Notice period

The employer and the employee can agree upon the notice period, however, it may not be less favorable for the employee then the statutory notice periods provided for in the Employment Protection Act (1982:80).51 The statutory notice periods are one to six months depending on the length of service in accordance with the following:

  • Employed for less than two years: one month’s notice period
  • Employed for at least two years but less than four years: two months’ notice period
  • Employed for at least four years but less than six years: three months’ notice period
  • Employed for at least six years but less than eight years: four months’ notice period.
  • Employed for at least eight years but less than ten years: five months’ notice period
  • Employed for at least ten years: six months’ notice period.

However, individual employment agreement or collective agreements may provide for longer notice periods. In general, employees adhere to notice periods of one to three months.

If employee has been employed for one year or less, employee has a one month notice period if he/she decides to resign. If employee has been employed for more than one year, he/she must give two months’ notice. This applies to employment until further notice.

Severance payments

There are no statutory rights to severance payments. The employee is entitled to normal wages during the notice period.

However, individual agreements can stipulate a right to a severance payment. Collective agreements can also provide for supplementary unemployment benefit (AGE) to employees dismissed due to redundancy. This compensation (referred to as severance compensation) is provided by an insurance system which is collectively financed by the employer community and, therefore, not paid directly by the employer.

Employee Benefits and Contributions

Mandatory benefits required by law to be provided by an employer. Annual leave, sick leave, maternity, paternity and parental leave, public holidays entitlement.

Employers are obligated to pay social security contributions. The social security contributions include contributions to the employees’ state pension, fees for health insurance, and other social benefits.

If bound by a collective bargaining agreement, employers are obligated to provide the employees with supplementary pension in accordance with the agreement.

Non-mandatory benefits that are offered by an employer. It is common that employers provide an occupational pension and insurance plan. Such plans typically include supplementary old-age pension, life insurance, accident insurance, long-term disability insurance, and payment exemption in case of disability.

It is common for employers to offer their employees a fitness benefit, meal vouchers, company cars, stock incentive plans and extra vacation.

Minimum statutory salary

There are no statutory regulations on minimum wages in Sweden. However, minimum wages are often regulated in collective bargaining agreements. If there is no collective bargaining agreement in place, the employer and employee can freely agree upon the salary, subject to nondiscrimination law.

Probationary period

The Employment Protection Act permits probationary periods of up to six months. If the employer does not want the employment to continue after this, the employer must notify the employee, as well as the relevant trade union, at least two weeks prior to the end of the probationary period. No specific reason for the termination needs to be given. If not terminated before the expiration of the probationary period, the employment will automatically turn into an indefinite-term employment relationship.

Overtime

Employee is not allowed to work more than 48 hours overtime over a four-week period, or 50 hours over a calendar month, subject to a maximum of 200 hours per calendar year. This type of overtime is known as general overtime.

However, the total working hours may not average more than 48 hours per week over a period of four months. Under special circumstances, the Swedish Work Environment Authority (Sw. Arbetsmiljöverket) may grant an exemption from the rules mentioned above by, for instance, increasing the permissible maximum amount of working hours.

Employees may be allowed to work extra overtime where extraordinary circumstances exist although a maximum of 150 additional overtime working hours can be requested on an annual basis.

Additional emergency overtime can be worked to the extent a specific situation so demands following an emergency, such as natural disasters or accidents.

Employees are entitled to a daily resting period of at least 11 consecutive hours per each 24-hour period and a weekly resting period of 36 consecutive hours per each seven day period.

The right for an employee to overtime pay is not regulated in Swedish law although it is often regulated in collective bargaining agreements. Salaried employees without any entitlement to overtime pay are often given five extra vacation days per year instead.

Work hours

According to the Working Hours Act, the statutory maximum amount of ordinary working hours is 40 hours per week, excluding lunch. Under special circumstances, ordinary working hours may instead average 40 hours per week over a period of not more than four weeks.

The statutory rules regarding working hours have been replaced, for a large sector of the labor market, by either specific terms contained in collective bargaining agreements or specific collectively agreed working time agreements.

Annual Leave

According to the Annual Leave Act, employees are entitled to a minimum of 25 vacation days per full year of employment, accruing on a pro rata basis. For salaried employees without any entitlement to overtime compensation, 30 days’ vacation may be said to be market practice. The right to vacation pay also accrues pro rata during the vacation year or the year prior thereto (qualifying year) depending on company policy and any applicable collective bargaining agreement. During vacation, an employee is entitled to regular salary and additional supplemental vacation pay. Variable compensation such as bonus also entitles the employee to vacation pay.

The general rule is that vacation must be taken, and the employer cannot make a payment in lieu of vacation accrued, but not used.

Sick Leave

According to the Sick Pay Act, an employee is entitled to sick pay during sickness related absence. Employers are obliged to pay sick pay during the first 14 days of each period of absence due to sickness. However, with respect to the first day of sickness, a statutory deduction shall be made, which equals 20 percent of the employee’s average remuneration paid for one week of work. The sick pay during the first two weeks must amount to at least 80% of the salary and be subject to the aforementioned statutory deduction. After the seventh day of sick leave, the employee may be required to submit a doctor’s certificate to the employer.

Parental Leave

Maternity rights and leaves. Both parents have an equal right to leave. The right to leave includes:

  • The right to full leave in connection with childbirth for female employees. This includes at least seven weeks before the calculated date of delivery and seven weeks after the delivery. A female employee is also entitled to leave for breast-feeding.
  • Full time off for a parent until the child is 18 months or, provided that the parent then has full parental benefits, for the time thereafter. It is possible to take out parental benefit up to and including the day the child turns 12 years old or when the child finishes form/grade 5 in compulsory school. However, after the child has turned four years old, it is only possible to save 96 days (parental benefit is paid out for 480 days in total).
  • Parents also have the right to shorten their working hours by up to a quarter of the normal hours until the child reaches the age of eight.
  • Leave for temporary care of children.

Paternity rights and leaves. Under the Social Insurance Code (2010:110), the father has a right to leave for ten working days in connection with childbirth. This right stretches 60 days from the child’s birth.

Having considered the major setbacks for penetrating or expanding your business activities in Sweden, Acumen International has set up an express global Employer of Record solution that will help to not only set your global expansion plan in train but also to bring it to fruition.

Ready to Get Started?
Get Express Quote