The Swedish government has initiated a process to remove state subsidies for employers who receive compensation for high sick pay costs.
The entitlement has enabled employers to receive compensation for the part of the sick pay costs that exceeds a certain fixed proportion of the wage costs. The purpose of the compensation has been to encourage employers to recruit additional employees.
The compensation will be phased out from 2024 and the last allowance will probably be paid in 2025. The announcement, which has not been received enthusiastically by all, has been criticised for making it more difficult for people with a medical history to enter the labour market and for affecting smaller companies that are more sensitive to high sickness costs.
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