The coronavirus - labour law issues (updated 24 March)
We have compiled our assessments of certain practical issues for employers related to the coronavirus situation. The situation is subject to rapid development, and everyone should stay oriented about what applies to each specific business.
In the current situation, all parties in labour life must act responsibly and be pragmatic and solution-focused.
Duty to safeguard a fully proper working environment
The employer has a general duty to provide a fully proper working environment, and will, according to the employer's right to manage, have a wide access to take necessary measures to prevent illness in the workplace. The measures must at all times be proportionate in light of the situation and in particular linked to current advice from public authorities.
Use of home office
In the current situation, the recommendation is that as many as possible work from home. In many businesses, there are good possibilities for such solutions. If this is not possible – e.g. in order to maintain critical functions – other measures should be considered, such as extra cleaning, closure of common areas etc. The employer may instruct employees to work from home. Employees may normally not demand to work from home instead of the normal work place. Most situations related to this should be possible to solve by dialogue and flexibility from both parties.
Absence due to child care
Schools and kindergartens are closed, and many employees cannot go to the work place. For employees who cannot work from home, it has now been clarified (in temporary regulations) that such absence will give basis for care benefits (Nw. "omsorgspenger") and statutory leave. Furthermore, it has been decided to double the number of days with care benefits (from 10 to 20 days for parents with one or two children), and reduce the employers liability to cover the first three days (from normally ten days). It remains to be seen how long the closure of schools and kindergartens will endure and whether additional measures will be implemented.
Sickness absence (including quarantine)
COVID-19 or suspicion of COVID-19 gives basis for absence due to sickness. The employer's liability to pay sickness benefits has temporarily been reduced (from 16) to three days. It has also been decided in temporary regulations that self-certification (Nw. "egenmelding") gives basis for sickness benefits during the regular employer's period (16 days). Employers are encouraged to accept self-certification, in order to avoid that the doctors spend their capacity on issuing doctor certificates rather than fighting the virus.
Given the special situation, the employer may in our assessment prohibit the employees from travelling abroad (as the travel will imply that the employee will be quarantined and thus unable to work for a period after return). If an employee has weighty reasons for a travel, the parties should seek to find individual solutions.
An employee can be temporarily laid off when justified reasons make it necessary for the company. A justified reason for the employer to lay off workers will be in cases where an epidemic results in disruptions in operations that hinder the employment of employees in an economically justified way. This may be the case, for example, if the company has to restructure operations due to a lack of necessary components, that customers are absent or that already agreed contracts must be cancelled or postponed. Also, situations in which key employees or a significant proportion of the workforce become ill or quarantined can, depending on the circumstances, justify lay-offs if the situation implies that other employees cannot be utilized in a proper way.
Temporary lay-offs shall normally be effected with at least 14 days' notice, but lay-offs as a result of the coronavirus situation may be an unforeseen event which may give basis for only 2 days' notice. The employer covers unemployment benefits for the period between notice and effectuation and also for the first period of temporary lay-offs (the employer's period). The employer's period is, pursuant to temporary regulations, reduced from 15 to 2 days. The change is effective from 20 March 2020, and for lay-offs already effectuated, the government (NAV) will take over the liability if the lay-offs have been effective for more than two days. Furthermore, it has been decided to temporarily increase the unemployment benefits from NAV from day 3 to 20. For these 18 days, the employees shall receive full salary (capped at 6 G, currently approx. NOK 600,000).
If an employee's full-time position has been reduced by at least 40 % as a result of a temporary lay-off, he or she will normally be entitled to unemployment benefits (Nw. "dagpenger"). The minimum requirement for entitlement to unemployment benefits has been temporarily reduced; an employer must now have had a minimum income of 0.75 times the National insurance basic amount ("G") during the last 12 months or 2.25G during the last 36 months. The employee must personally apply for unemployment benefits from NAV.
Unemployment benefits will as a maximum constitute 80 % of the annual salary up to 3G, and 62.4 % of the annual salary between 3G and 6G. The calculation is based on the average of the salary the past 12 or 36 months, depending on what gives the highest amount. Unemployment benefits are treated as taxable income and the maximum possible payment is approximately NOK 8,200 per week before tax.
Lay-off, pension and insurance
As a main rule, temporarily laid-off employees remain members of the employer's insurance schemes. For membership in the employer's collective pension scheme, the starting point pursuant to the background law will be the opposite, but the rules of the company-specific scheme may include provisions stating that the membership shall continue during temporary lay-off. In such case, the employer's payment obligations also continue to run. It is important to consider these conditions in the event of temporary lay-offs, as the right to pension in the event of disability can also depend on how this is regulated in the employer's insurance contracts. The life insurance industry is working to find solutions that can address costs related to keeping temporarily laid-off employees in pension and insurance schemes. Employers who consider temporary lay-offs are encouraged to take a look at what applies to their schemes.