New Temporary Rules On Layoffs In Light Of Covid-19

Many Norwegian employees have been (temporarily) laid off due to Covid-19. The rules related to layoffs are generally based on non-statutory law, similar to principles agreed upon in collective wage agreements. An employer may, as a general rule, temporarily lay off its employees for a period of up to six months, if there are reasonable grounds for the layoff. A reasonable cause will typically be a temporary shortage of work due to industry shutdowns (e.g., hairdressers and beauty salons), but also due to cancellation of orders, delayed supply of goods, etc. During the layoff period, the employer is obliged to pay full salary for a certain number of days (the employer period), before the employee will be entitled to unemployment benefits from the National Insurance Scheme.

In order to mitigate the economic consequences of the extensive layoffs we now see due to Covid-19, the Norwegian parliament has adopted several new rules pertaining to layoffs:

Employees who are temporarily laid off are guaranteed full pay up to 6G1 (NOK 599,148) through day 20 of the layoff period. The employer's duty to pay wages upon temporary layoff is reduced from 15 to two days. The state assumes responsibility for paying employee wages for the last 18 days. After day 20 of the layoff period, the employees who are temporarily laid off are secured an income of 80 percent of the unemployment benefit basis (normally the...