The Corona virus – proposal to extend the lay-off period to 52 weeks

The Corona virus – proposal to extend the lay-off period to 52 weeks

The Government proposes extending the lay-off period to 52 weeks from 1 November 2020.

As a result of the corona pandemic, the government proposes to extend the temporary layoff period to 52 weeks from the first of November. The purpose of the extention is to help the business community financially in an uncertain time.

This implies:

  1. That the period during which the employer is exempted from the wage obligation during temporary layoff is extended from 26 weeks to 52 weeks.
  2. That the period temporarily laid-off employees may be entitled to unemployment benefits is extended from 26 weeks to 52 weeks.

According to the Obligation to Pay Wages during Temporary Redundancy Act, the employer must pay lay-off pay and other remuneration for a given time after the lay-off has been decided (employer period I). From 1 September, this period is 10 days. After the employer-financed period, the employer is exempt from the wage obligation for 26 weeks (the exemption period) under the current scheme. As mentioned, the exemption period has now been proposed extended to 52 weeks.

In addition, the Government proposes an employer period II of 5 days after 30 weeks of temporary lay-off from 1 January 2021. Employer period II will apply to everyone who has been laid off for 30 weeks or more as per 1 January 2021. The purpose of employer period II is for employers to assess whether it is necessary to keep employees temporarily laid off, rather than that other companies in need are gaining access to the necessary supply of labor.

The proposal will have budgetary consequences. The Government will therefore submit a parliamentary bill with a proposal for a budget resolution to Stortinget (Parliament).

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