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Employment in Sweden

Swedish employment law appears complex and confusing when looking from outside view although in some ways there are many similarities to other countries. Other factors that complicate matters include the differences between regions and an inconsistent approach to adherence to laws in different cities.   For example, there are differences between minimum wages and welfare contribution amounts in different cities.  For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Sweden.

Swedish employment law is highly regulated, particularly with regards to termination. The majority of Swedish workplaces have collective agreements in place between employers and unions to cover the regulation of wages, working conditions and insurance. Employers are free to offer better conditions than those stipulated by collective agreements. Personal agreements which create working conditions below those set out in the relevant collective agreement are illegal.

Key points on employment in Sweden

There are several key areas to be aware of within Sweden’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department.  These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the local laws and rules for both local employees as well as foreign nationals.

Employee Entitlements

Information Explanation
Working on Sundays ?

Working days and hours are regulated by The Working Hours Act, with Collective and tie-in agreements

Disclosure and Confidentiality of Personal Information ?

Protected disclosures – Disclosures of information in relation to legal obligations, health, safety etc.

Employee Protection and Anti-discrimination Rights ?

Protection from suffering detriment in employment – An employee has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer on various grounds.

Time Off Work ?

The employee’s right to have time off work depends on the reason for absence. Due to several different laws with Collective and tie-in agreements regulates, the time is paid or not paid. All employees have a statutory right to take time off work for the following:

  • to carry out duties as a trade union official
  • to carry out duties as a safety delegate
  • to look for work faced with redundancy
  • to under certain circumstances have leave of absence or permission
  • for various kinds of parental leave
  • for annual leave
Medical Leave ?

All employees are qualified to get Statutory Sick Pay, from the first day of employment, with special regulations if the period of employment is less than a month. The first day of illness is a waiting day and the employee does not receive any sick pay. The employer is responsible for the cost for the two first weeks. After the fourteenth day, the employee receives sickness benefit from the Swedish Social Insurance Agency, but the employers often have additional obligations due to Collective and tie-in agreements regulates.

Employment Termination

Information Explanation
Severance / Redundancy Pay ?

There is a right to offer alternative work if suspension from work is because of medical grounds.

Termination of Employment ?

This is regulated in several employment related laws and is a complex matter. The basic right is that an employment is indefinite, so to employ temporarily must be clear from a written agreement in order to apply. Notice is required to be given to an employer to terminate the contract of employment of a person who has been continuously employed more than 12 months during a tre-year-long period. Contracts can only be terminated by the employer when there is a reasonable cause for dismissal.
Employers must give notice corresponding to the amount of time the employee has been working for during the notice period; the employee is entitled to receive all employment benefits due during his or her regular period of employment. Fixed-term contracts end on a specific date or on completion of a task. These contracts can last a maximum of two years within a five-year period, after that the employment becomes indefinite.


Probation periods may be included at the start of an employment contract, and, if either the employee or the employer wishes to terminate the employment, notice must be given before or upon the expiry of the probation period.

Outsourcing Employment Through a GEO Employer of Record Service

Compliance with local employment requirements is just one of the issues foreign companies face when employing staff in Sweden. For companies which intend to employ their staff directly through their incorporated Swedish entity, professional legal advice is recommended. Shield GEO provides an alternative path for companies to outsource the employment of their staff in Sweden.

As a Global Employer Organization (GEO), Shield GEO acts as the Employer of Record and ensures the employment is compliant with host country regulations regarding employment. In addition Shield GEO will handle payroll processing, tax and immigration. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Sweden.

The Shield GEO solution is an attractive alternative where

– the company is looking to employ staff quickly

– the company doesn’t have an appropriately incorporated entity in Sweden

– the company wants to work within a defined budget

– the company wants to limit its initial commitment in Sweden

– the company needs help with tax, employment, immigration and payroll compliance in Sweden

Shield GEO can contract directly with the company to employ and payroll their staff in Sweden. Shield GEO supplies local employment contracts for the staff which ensure that local statutory requirements are met covering issues such as termination, probation periods, leave entitlements and statutory benefits.  Shield GEO is able to advise companies how to cover local employment regulations whilst still providing consistent global employment policies. Understand more about outsourced employment through Shield GEO.



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