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7 August 2020

Wage support program for the laid-off employees

The new governmental support for the companies that have laid-off employees during the coronavirus pandemic starts to apply. The subsidy program will be available only during July and August 2020.

As stated on the government’s statement: “the proposal means that the company receives a cash grant per employee, which is withdrawn from layoffs, so that people return to work faster”. The scheme applies to companies, non-profit organizations and foundations that have laid-off employees as a result of coronavirus pandemic.

The new scheme is designed as a remedy for Norwegian private businesses to stay competitive, as well as for the workers and employees to maintain their jobs.

When?

The provisions are valid for July and August, 2020. It’s projected as a temporary form of financial help. Note that a dialogue with the social partners takes place regarding prolongation of the wage support scheme. The government is considering the need for the new arrangements during the autumn.

As for the current support scheme, the application portal – fully automated site that will ensure timely payments – is said to be opened during September this year.

Who qualifies?

Although every company, foundation and voluntary organization can apply for the support program, only those with decrease in turnover above 10 percent points can qualify.

The support will apply for every employee withdrawn from layoffs at the beginning of July and August if the employee:

  • was laid-off from the same company that apply for support;
  • is taken back in at least as high a fraction of positions as before the layoffs;
  • was registered with NAV as laid-off as of May 28th, 2020 before the scheme was launched.

The employee for whom support is sought cannot be laid-off again during the support period, nor can the company lay off other employees during the period. Companies that retire their employees during the life of the scheme will not be eligible.

Calculating subsidy amount

The subsidy will be calculated on the basis of revenue declines compared to the same month in 2019. Also, the amounts will be adjusted according to the employee’s position and severance pay.

It is possible to receive up to 15,000 NOK per month per employee if the value of turnover decrease in the company is equal or higher than 30 percent. For other instances, it depends on the value of drop in the company’s turnover after the pandemic outbreak.

General formula for calculating the payout amount for companies with a turnover drop less than 30 percent: amount of support in NOK per person = (Decrease in turnover – 10 percentage points) * 75,000.

When the turnover drop cannot be calculated (i.e. for non-profit organizations, obviously), the support is set at NOK 10,000 per employee per month. Remember that for companies with less than 10 percent in turnover decrease, the governmental wage support has not been provided.

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