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Overview: The Norwegian government’s aid package for corona-affected companies and employees

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calendar 20 March 2020
globus Norway

Several companies are currently experiencing serious economic challenges due to the corona outbreak and the consequential restrictions both nationally and internationally. The Norwegian krone is historically weak, the price of oil is sinking, and several companies are experiencing fall in turnover. The government has proposed a number of measures to remedy the financial consequence to aid both companies and employees.

Due to the consequences of the corona virus, the government has issued a crisis package to aid companies and employees financially. Several of the proposed measures have already been adopted by the parliament, while measures in connection with taxes will be considered on 19 March 2020. The crisis package is intended to ensure that Norwegian business and industry is kept going, and that employees still have a workplace to come back to when the crisis is over.

Temporary changes to the rules on temporary layoffs

Companies have the possibility to partly or fully temporarily lay off employees as a result of company conditions when the company cannot provide work tasks to employees in an economically sound manner. Under normal conditions, the affected employees are to be notified 14 days prior to implementation and the company will have to pay full salary for 15 days. Under the current conditions, parliament has adopted a measure allowing companies to notify employees two days prior to implementation and to pay salary for the two first days after implementation.

The employer period in relation to sick leave and care allowance

The company’s duty to pay salary in the instance of an employee’s illness have also been temporarily reduced due to the corona virus. Normally, the company will have to pay salary the first 16 calendar days og absence when an employer is on sick leave and will be refunded by NAV for salary paid after the 17th day. On 16 March 2020, parliament adopted a temporary measure where the employer period is reduced to 3 days.

The Norwegian kindergartens and schools are currently closed. In relation to this, NAV has announced that parents who have to stay at home due to this closure will be entitled to care allowance. Normally, the employer period for care allowance will be paid salary the first 10 days, where companies can receive a refund from NAV from the 11th day when the parent is entitled to further care days. On 16 March 2020, parliament adopted a temporary measure where the employer period is reduced to 3 days, and the employee’s entitlement to care days are doubled.

Further measures

In addition to measures to aid companies costs in relation to employees, parliament has adopted several measures to aid companies in relation to other costs:

  • Payment of VAT and payment of second instalment for advance tax will be postponed.
  • The employer's national insurance contributions are reduced by 4 percentage points for two months
  • The government wants to deposit NOK 100 billion for guarantee and loan schemes for companies
  • Self-employed persons will receive sick pay from day 3 and care allowance from day 4
  • Self-employed persons will receive compensation for income loss from day 17

IUNO’s opinion

During the present situation, things have and will change consecutively. The government has further proposed a law that will give the government an extended authorization to issue measures without prior consideration in the parliament. Practically, it can therefore be difficult for companies to know how to act.

IUNO recommends that companies seek legal advisement when in doubt on how to implement the governments measures.

Due to the consequences of the corona virus, the government has issued a crisis package to aid companies and employees financially. Several of the proposed measures have already been adopted by the parliament, while measures in connection with taxes will be considered on 19 March 2020. The crisis package is intended to ensure that Norwegian business and industry is kept going, and that employees still have a workplace to come back to when the crisis is over.

Temporary changes to the rules on temporary layoffs

Companies have the possibility to partly or fully temporarily lay off employees as a result of company conditions when the company cannot provide work tasks to employees in an economically sound manner. Under normal conditions, the affected employees are to be notified 14 days prior to implementation and the company will have to pay full salary for 15 days. Under the current conditions, parliament has adopted a measure allowing companies to notify employees two days prior to implementation and to pay salary for the two first days after implementation.

The employer period in relation to sick leave and care allowance

The company’s duty to pay salary in the instance of an employee’s illness have also been temporarily reduced due to the corona virus. Normally, the company will have to pay salary the first 16 calendar days og absence when an employer is on sick leave and will be refunded by NAV for salary paid after the 17th day. On 16 March 2020, parliament adopted a temporary measure where the employer period is reduced to 3 days.

The Norwegian kindergartens and schools are currently closed. In relation to this, NAV has announced that parents who have to stay at home due to this closure will be entitled to care allowance. Normally, the employer period for care allowance will be paid salary the first 10 days, where companies can receive a refund from NAV from the 11th day when the parent is entitled to further care days. On 16 March 2020, parliament adopted a temporary measure where the employer period is reduced to 3 days, and the employee’s entitlement to care days are doubled.

Further measures

In addition to measures to aid companies costs in relation to employees, parliament has adopted several measures to aid companies in relation to other costs:

  • Payment of VAT and payment of second instalment for advance tax will be postponed.
  • The employer's national insurance contributions are reduced by 4 percentage points for two months
  • The government wants to deposit NOK 100 billion for guarantee and loan schemes for companies
  • Self-employed persons will receive sick pay from day 3 and care allowance from day 4
  • Self-employed persons will receive compensation for income loss from day 17

IUNO’s opinion

During the present situation, things have and will change consecutively. The government has further proposed a law that will give the government an extended authorization to issue measures without prior consideration in the parliament. Practically, it can therefore be difficult for companies to know how to act.

IUNO recommends that companies seek legal advisement when in doubt on how to implement the governments measures.

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Anders

Etgen Reitz

Partner

Sofie

Aurora Braut Bache

Associate

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