Hiring guide in Sweden

Legal framework

Types of employment contracts

According to the labour law in Sweden, an employment contract is for full-time work by default. This means the contract is valid on a full-time basis unless there is a specific agreement for part-time work.

A written contract must explicitly state whether employment is temporary or fixed-term, and the employer must prove that it is time-limited. If only a few hours of work are needed each week, an employee can be hired on a part-time basis, such as 25% of a full-time position. Part-time employment can be either permanent or temporary.

There’s also hourly employment which isn’t a distinct type of employment but a pay method. Hourly employees are paid by the hour, but their employment status must be either permanent or temporary.

Content of an employment contract

Employment contracts must include certain elements to ensure the employee is well-informed. These elements are the names and addresses of both the employer and employee, the start date and work location, the job title and description, and the type of employment (whether permanent or temporary), along with relevant notice periods. 

In addition, the contract must specify the salary and benefits, pay frequency, working hours, annual leave, training, and termination procedures. Social security contributions, collective agreements, and conditions for working abroad, if applicable, must also be included.

Download a free employment contract for Sweden through Native Teams.

Oral, written or electronic employment contracts

Employers must supply written information to employees within 7 days of their start date, covering crucial aspects such as job responsibilities, employment type, salary, and termination conditions. Although written employment contracts are the most prevalent, electronic contracts are equally valid as long as they meet the criteria outlined in the general contract law.

Working hours

A standard work week, as specified by the Working Hours Act, should not exceed 40 hours. Employers and unions have the ability to negotiate collective agreements that can modify or entirely replace the provisions of the Working Hours Act. These agreements can tailor specific regulations to better meet their needs.

The Act is also aligned with mandatory EU regulations on working hours, which establish minimum standards for weekly rest, daily rest, and overall weekly working time.

Night work

A “night worker” is defined as an employee who regularly works at least 3 hours of their shift at night, which is defined as the period from 22:00 to 06:00.

Night workers’ working hours must not exceed an average of 8 hours in any 24-hour period, averaged over a reference period of up to 4 months. When calculating this average, one 24-hour period should be subtracted for each commenced 7-day period within the reference period.

Types of leaves and breaks

The Swedish Working Hours Act requires that employees working more than 5 hours must have a break long enough for rest and meals. The Act also mandates a minimum daily rest period of 11 uninterrupted hours and a continuous weekly rest period of at least 36 hours, ensuring employees get sufficient downtime.

Although the minimum break duration isn’t specifically defined and may vary based on collective agreements or individual contracts, there are specific rules for young workers under 18. If a young worker’s daily working time exceeds 4.5 hours, they are entitled to a break, typically longer than that for adults.

Public holidays

In Sweden, a clear distinction is made between public holidays, often referred to as “red days,” and regular non-working days. Each year, Sweden observes 13 public holidays. These include New Year’s Day on January 1 and Epiphany on January 6. Good Friday, the Friday before Easter Sunday, and Easter Sunday itself, which occurs on the Sunday after the first full moon following March 21, are also recognised. The day after Easter Sunday is Easter Monday, followed by Ascension Day, observed on the sixth Thursday after Easter Sunday.

Additionally, May Day is celebrated on May 1, and the Day of Pentecost is observed on the seventh Sunday after Easter Sunday. National Day falls on June 6, and Midsummer Day is celebrated on the Saturday between June 20 and 26. All Saints Day is marked on the Saturday between October 31 and November 6. The year concludes with Christmas Day on December 25 and Boxing Day on December 26.

Salary

In Sweden, the most prevalent form of compensation is a monthly salary, although hourly wages and variable salaries are also common. Piecework, a type of variable salary, compensates employees based on the number of units produced or tasks completed. Another form of variable salary is bonus or commission pay, which is tied to the business’s performance or revenue.

To calculate the salary and taxes in Sweden, click here.

Sick leave

An employee becomes eligible for sick pay upon providing a medical certificate from a doctor or dentist that confirms a reduction in work capacity due to illness. Eligibility for sick pay starts from the first day of employment, as long as the employee has worked continuously for fourteen calendar days. This entitlement lasts throughout the employment period.

During the sick leave period, which covers the day the work capacity is reduced and the following 13 calendar days, the employee is entitled to receive sick pay.

Parental leave

Under the Parental Leave Act, employees are entitled to parental leave. This leave applies not only to biological parents but also to certain other caregivers. This includes legal custodians, individuals providing permanent care and foster care, and those living with a parent under specific conditions.

Parental leave covers 6 categories for child care. Employees who choose not to take parental benefits can reduce their normal working hours by up to a quarter to care for a child under 8 years old or for older children who have not yet completed their first year of school.

Additionally, employers may be bound by collective agreements that allow for reduced working hours until the child reaches 12 years of age.

Paternity and maternity leave

A female employee is entitled to a maternity leave period around the birth of her child. This includes a continuous period of at least 7 weeks before the expected delivery date and extends for 7 weeks after the birth. Regardless of other leave reasons, 2 weeks of this maternity leave are mandatory either before or after childbirth.

Swedish law does not specifically designate paternity leave. Instead, parental leave is intended to be shared between partners. Since 1974, all parents in Sweden, regardless of whether they are birthing or non-birthing parents, have been eligible for paid parental leave benefits.

Methods of employment termination

Employment contracts that are valid for an indefinite term can be terminated by either the employer or the employee, provided a specified notice period is followed. Termination must always be in a written form and must be objectively justified. If requested by the employee, the employer must provide the reason for termination.

Employers have the authority to dismiss employees with or without notice, but a dismissal with notice must be based on objective grounds. While objective grounds are not explicitly defined by statute or case law, they can include objective reasons or subjective personal reasons.

Ordinary dismissal by employer

Personal grounds for termination relate to the individual employee, whereas all other reasons fall under redundancy. In both situations, the employer must prove that there are objective grounds for termination.

Personal grounds for termination can include misconduct, unauthorised absence, serious difficulties working with others, and disloyalty. 

Before dismissing an employee for misconduct, the employer must give the employee a minimum of 2 weeks’ notice. At the same time, the employee’s trade union must be notified and provided with relevant information within the same period. The union then has 1 week to request consultations.

Notice period and challenging the dismissal

The notice period depends on the length of the employee’s employment with the company. For employees with less than 2 years of service, the notice period is 1 month. Those employed for 2 to 4 years have a notice period of 2 months. After that, an additional month is added for every 2 years of employment, up to a maximum of 6 months.

When employees resign, they typically need to give at least 1 month’s notice, although this can vary based on their employment contract terms. However, as stated in the Employment Protection Act, employees are not required to provide reasons for their resignation.

An employee has the right to challenge dismissal in a labour court if they believe the termination was unjustified, particularly for subjective reasons.

Probationary period

Many companies start an employment relationship with a probationary period, which by law cannot exceed 6 months unless specified otherwise by a collective agreement. A legitimate reason for probation must be present; for example, an employee cannot shift from a temporary position to a probationary one for the same type of work.

Severance pay

Sweden does not require statutory severance pay. However, if an employer wants to deviate from the “last in, first out” (LIFO) principle during layoffs or terminate an employment contract for subjective reasons without justifiable cause, a settlement is usually necessary, often involving some form of severance compensation.

Intellectual property rights

The transfer of economic rights in an employee’s work can occur through collective agreements or individual employment contracts. If no explicit agreement is in place, the transfer may be implied based on the nature of the employment relationship and customary practices within the sector. Legal principles establish that employers can use works created by employees as part of their job duties or following employer instructions.

Employee data privacy

Data protection legislation imposes significant responsibilities on entities like the Swedish Work Environment Authority, which processes personal data. As the controller of personal data processing within its operations, the Authority must ensure that all data processing activities are lawful, establishing clear purposes and adhering to legal bases for such activities.

Furthermore, the Swedish Work Environment Authority is responsible for processing only the minimum amount of personal data necessary to achieve its objectives.

Prohibition of competition

In Swedish employment law, it is common to include non-competition clauses in employment contracts to regulate and limit the actions of former employees for a specified period after they leave the company. 

There are non-compete clauses, which prevent the employee from working for or engaging in a competing business. There are also non-solicitation clauses, which prevent the employee from persuading the employer’s staff to join another company. Finally, there are customer protection clauses, which prohibit the employee from contacting the employer’s clients to divert their business.

Remote working policy

Remote work is common in Swedish employment practices, but there is no specific legislation dedicated to it. Instead, the existing employment laws apply to remote work arrangements. These are further supported by remote work employment contracts, collective agreements, and judicial precedents to address any gaps.

Employees from the EU or EEA can work remotely in Sweden without a residence permit for up to 3 months. After this period, they need to apply for a residence permit and obtain a tax number. On the other hand, non-EU citizens, including Swiss nationals, must secure a work permit and residence visa to work legally in Sweden, whether remotely or on-site. However, Sweden does not offer a digital nomad visa.

Responsibilities within a remote work arrangement 

Employers play a crucial role in creating effective remote work environments and have specific responsibilities to fulfil. Establishing a clear and comprehensive remote work policy is fundamental; this policy should outline eligibility criteria, working hours, communication protocols, and expense reimbursements. 

Providing training on remote work tools, effective communication practices, and time management is essential to empower remote workers to perform efficiently. Setting clear performance expectations and conducting regular performance reviews ensure ongoing productivity and engagement among remote employees.

Health and safety at home

As of March 31, 2016, new provisions regarding the organisational and social work environment have been implemented to foster a positive work environment in Swedish workplaces. These provisions apply to all activities where employees perform work for their employers.

Employers are responsible for ensuring that home workplaces are functional, ergonomic, and suitable for uninterrupted work.

What are the advantages of hiring employees from Sweden vs other countries?

Known for its excellent education system, Sweden has a highly educated workforce. Many Swedes have higher education degrees, often in fields like technology, engineering, and business, which are crucial for various industries.

Moreover, the country has established progressive labour laws and employee benefits, including generous parental leave, health care, and pension schemes. This can influence employee retention and satisfaction. 

Finally, Swedes typically have a high proficiency in English, making communication smooth for international companies. Additionally, the cultural fit is often smooth, as Swedish business practices align well with those of other Western countries.

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• Local support: We can assist you in understanding and complying with the relevant local laws.