Changes to the rules for temporary layoffs and unemployment benefits
Published under: Solberg's Government
Publisher: Ministry of Labour and Social Affairs
Press release | No: 07/20 | Date: 21/03/2020
The number of people being laid off temporarily has shot up since the beginning of the coronavirus outbreak. Both people who are laid off or lose their jobs and employers will receive more compensation under new rules.
The outbreak of coronavirus (Covid-19) is having major, acute impacts on working life in Norway. Many businesses have been ordered to close, and measures to limit the spread of infection are having serious repercussions. As a result, large numbers of people in many different branches are being laid off.
To make it possible to cope with these large numbers and reduce the consequences for both companies and individual employees, all the parties in the Storting (Norwegian parliament) have agreed on temporary amendments to the rules on unemployment benefit for people who are laid off from their jobs. These were approved by the King in Council on Friday 20 March and entered into force on the same date.
- Employees will retain 100 % of their pay up to 6G (G = the National Insurance basic amount. 1G is NOK 99 858 per May 1 2019) from day 3 up to and including day 20 of the layoff period. The changes are effective from 20 March, but further details will not be formally in place until next week. Employees will receive any money they are owed once the technical solutions are available and NAV has processed their applications. Employees who have been laid off and are still receiving pay from their employers will be transferred to the new system from 20 March inclusive.
- The employer-financed period (the period during which the employer must pay laid-off workers their full pay) has been reduced from 15 to 2 days. After this, the state will take over responsibility for income security for employees who are laid off. This means that any employer who has already been paying laid-off workers for two days or more can stop any further payments. The amendment is effective from 20 March, and the state will take over responsibility for further payments from 20 March inclusive.
- The rate of unemployment benefit for people who are laid off and for those who lose their jobs has been raised to 80 % of their income (this is the income calculated by NAV as a basis for paying benefits) for an income of up to 3G and 62.4 % of income between 3G and 6G. This also enters into force on 20 March.
- The minimum income entitling someone to unemployment benefit has been reduced to 0.75G in the last 12 months or 2.25G over the last 36 months, with effect from 20 March. These rules apply both to people who are laid off and to those who are unemployed.
- The provision on a three-day waiting period before unemployment benefits are started has been repealed. This means that people who are laid off do not have to cope with three days without any income. This amendment also applies to people who are fired and have to apply for unemployment benefit, and is effective from 20 March.
- The minimum reduction in working hours entitling employees to unemployment benefit has been reduced from 50 % to 40 % with effect from 20 March. This means for example that a full-time employee who is only laid off for two days a week will be entitled to unemployment benefit. This makes it easier to use a system of 'rolling layoffs' and reduce the burden on individual employees.
‘With these changes, the Government and the Storting are seeking to save Norwegian jobs and secure an income for employees in this very difficult situation. We want people to have jobs to go back to once the crisis is over and an income that allows them to make ends meet during the crisis,’ said Minister of Labour and Social Affairs Torbjørn Røe Isaksen.
‘NAV personnel are doing everything they can to process a huge number of applications and put in place new rules. You will all receive what you are owed, but it will take a while before everything is in place,’ said Mr Isaksen.
NAV calculates unemployment benefits on the basis of gross income in the past 12 or 36 months, depending on which gives the highest payments.
An employee who is laid off is entitled to unemployment benefit for up to 26 weeks during an 18-month period, if wholly or partially laid off by the same employer. The Ministry of Labour and Social Affairs may adopt regulations authorising extensions to the period during which laid-off employees are entitled to unemployment benefits.
Layoffs that have already started
The changes to the employer-financed period also apply to layoffs that have already started, so that employers who have paid employees for at least two days of the layoff period when the new rules come into effect have no obligation to pay them further.