Changes to the PAYE tax return, grandparents gaining parental leave rights, and stricter pay survey requirements. A lot is happening in the payroll and HR world right now. We’ve compiled a list of eight essential developments regarding new laws, proposed legislation, and other significant updates you need to be aware of.
1. Support for High Sick Pay Costs Removed
Have you heard about the recent changes concerning compensation for sick pay costs? When an employee falls ill, you, as the employer, are responsible for paying sick pay for up to 14 days. If these costs have been exceptionally high, you’ve been able to receive compensation from the Swedish Social Insurance Agency after reporting this in the PAYE tax return. However, this is about to change. The financial support will be removed entirely, meaning you will no longer report sick pay costs in the PAYE tax return. This change is effective from July 1, 2024.
Read more about changes in sick pay and the PAYE tax return here.
2. Labour Market Entry Agreement – A New Employment Form for the Long-Term Unemployed and Newly Arrived
Introduced in January 2024, this new employment form aims to help newly arrived immigrants and the long-term unemployed enter the job market.
In short, as an employer, you can receive financial support from the government to hire these individuals, alleviating the burden of the total wage cost. The employment can last for a maximum of two years and should typically transition into a permanent position. The opportunity to hire through the Labour Market Entry Agreement takes effect on January 1, 2024, and will be available for the next five years.
Learn more about Labour Market Entry Agreement at the Swedish Public Employment Service (Arbetsförmedlingen).
3. Government Proposal: Combatting Welfare Fraud with PAYE tax return
Could the PAYE tax return (AGI) be used to stop fraud? The government believes so and has proposed that the Social Insurance Agency should have access to more information from employers to improve oversight of payouts (particularly parental benefits) to combat welfare fraud. The proposal requires employers to report employee absences that may qualify for parental benefits in conjunction with the employer declaration. This information will be sent to the Swedish Tax Agency, which will then forward it to the Swedish Social Insurance Agency for verification.
These changes are not yet finalized but are expected to take effect on January 1, 2025.
Read more in the government’s press release (in Swedish).
4. CSRD – Stricter Requirements for Corporate Sustainability Reporting
New regulations are on the horizon for how companies report their impact on the environment and society. On July 1 of this year, the EU Directive CSRD (Corporate Sustainability Reporting Directive) became Swedish law. But don’t panic just yet! Fortunately, there’s still some time to prepare for what’s coming. The requirements for sustainability reporting in the new format will be gradually introduced over the coming years, depending on factors like the size of the company.
5. EU Directive for Transparent and Equal Pay
The days of salary secrecy are ending with stricter requirements for companies to conduct pay surveys. The new EU Pay Transparency Directive, aimed at closing the gender pay gap within the EU, is on track to become Swedish law. The new requirements will mean, among other things, that you, as an employer, must provide information about salary levels and criteria for wage development, and job applicants have the right to receive information about starting salaries in job advertisements (or at least well before employment begins). Regular pay surveys will become more critical than ever – and must also be reported to the Equality Ombudsman (Diskrimineringsombudsmannen).
The deadline for fully implementing the Pay Transparency Directive in each member state, including Sweden, is June 7, 2026.
Learn more about what the pay transparency directive entails.
P.S. Want to dive deeper? Don’t miss our webinar where we guide you through the new directive requirements and offer tips on simplifying your pay survey process. Read more and register here.
6. New EU Regulations on Minimum Wages
Another EU directive in the pipeline is the The Minimum Wage Directive, which, as the name suggests, concerns regulating minimum wage levels within the EU to ensure a decent standard of living. However, it's reassuring to know that The Minimum Wage Directive (unlike the CSRD and the Pay Transparency Directive) is not expected to lead to significant changes in Sweden. Here, about 90 percent of the labor market is covered by collective agreements that already establish minimum wage levels, meeting the EU’s standards.
The proposal is that the changes will take effect on November 15, 2024, but there is no government decision in place yet.
Read more about the Minimum Wage Directive on the Government’s website (in Swedish).
7. Changes in Parental Leave
2024 is a year of change for the Swedish parental insurance system, affecting both employees and employers.
- Since July 1, parents can transfer parental leave days to another close adult in the child's life who is not a parent, such as a grandparent, sibling, or friend. In other words, it’s not only employees who have children themselves who will be able to apply for parental leave.
- At the same time, the number of double days (when both parents can be on leave simultaneously with the child) has been significantly increased from 30 to 60 days.
Read more about the new parental leave regulations here.
8. Goodbye to Paper Receipts!
Finally, we can say goodbye to piles of crumpled receipts! A much-anticipated change is that the hassle of keeping paper receipts is now eliminated. As long as you ensure that the receipt is transferred to a digital format (for example, by photographing or scanning it), you can then discard or destroy it. The new rules came into effect on July 1 this year.
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