Layoffs – New rules from the Norwegian Parliament

The extent of Layoffs has skyrocketed since the corona eruption. According to new rules, employees, unemployed and employers now receive more compensation.

Labour

The outbreak of the coronavirus (Covid-19) has major and acute consequences for labour in Norway. Many businesses are required to shut down, and the ripple effects of measures to limit infections are significant. This has resulted in a very high number of layoffs in a number of industries.

 

In order to meet the large layoff needs, and to reduce the damage to both companies and employees, a united Norwegian Parliament has adopted the following temporary changes in the regulations relating to layoffs. The new approved regulation have effect from today Friday, 20 March.

 

Laid off employees are guaranteed 100 per cent salary up to 6G (1G = NOK 99 858,-) from day 3 through day 20. The changes will take effect on 20 March, but further provisions will be formally in place next week. Employees will be postpaid the difference, once the technical solutions are in place and The Norwegian Labour and Welfare Organization has processed the application. Those who are laid off and still receive salary from the employer will switch to the new scheme from 20 March. The employer period (the days when the employer pays full salary to the laid off) is reduced from 15 to 2 days. The Government then takes over the income protection of the laid off. This means that employers who have already paid two or more days of payroll duty at the time, are released from several days of payroll duty. The Government will take over the payment responsibility from 20 March. Benefits for laidoff employees and those who become unemployed are adjusted upwards and shall constitute 80 per cent of the unemployment benefit up to 3G, and 62.4 per cent of the part of the unemployment benefit that is between 3G and 6G.

 

The employer period (the days when the employer pays full salary to the laid off) is reduced from 15 to 2 days. The Government then takes over the income protection of the laid off. This means that employers who have already paid two or more days of payroll duty at the time, are released from several days of payroll duty. The Government will take over the payment responsibility from 20 March.

 

Benefits for laidoff employees and those who become unemployed are adjusted upwards and shall constitute 80 per cent of the unemployment benefit up to 3G, and 62.4 per cent of the part of the unemployment benefit that is between 3G and 6G. 

 

The lower income limit for entitlement to unemployment benefit is lowered to 0.75G over the past 12 months or 2.25G over the past 36 months. The rules will apply to both laidoff employees and unemployed.

 

The provision for a three-day waiting period before the unemployment benefit payments start is repealed. This implies that those who are laid off does not have to go three days without any income. The change also applies to those who are dismissed and must apply for unemployment benefit. 

 

The requirement for reduced working hours for entitlement to unemployment benefits during layoffs changes from a minimum of 50 percent to a minimum of 40 percent. The change means that, for example, a full-time employee who is laid off only two working days a week will be entitled to unemployment benefits. By facilitating more use of “rolling layoffs”, the financial burden on individual employees is reduced.

 

Facts about the changes in the layoff and unemployment benefit regulations

The unemployment benefit is calculated on the basis of gross income for the last 12 or 36 months, whichever is the higher payment. 

 

Employees who are laid off may receive unemployment benefits for up to 26 weeks during a period of 18 months, in full or in part, by the same employer. The Ministry may, in regulations, grant access to extend the period laid down entitled to unemployment benefit.

Author

John Steffen Gulbrandsen

  • Partner | Lawyer (H)

Rune Andersen

  • Partner | Lawyer