NOTE! Klarna is NOT laying people off in Sweden (yet). Language is IMPORTANT. Right now Klarna are testing the waters to see how many permanent employees they can “buy out” (köpa ut). This means Klarna gets to circumvent Swedish labour laws, like LAS (last in, first out), and instead get to pick and choose who to “agree to terminate”.
If you are a permanent employee of Klarna (tillsvidareanställd) and reject the severance package you will, for the time being, remain employed by Klarna. What happens down the line we don’t know. Klarna could be forced to start an actual layoff process (now LAS comes into play) and you could still lose your job (without a severance now) or you get to keep it. What it means to keep a role/job there “was no room for in the new organisation” we can’t answer. But Klarna can’t legally reduce your salary, but they can change your role/move you around inside the org. And you might not like where you end up, but at least you’re still employed and paid and can calmly look for new work.
This FAQ applies ONLY to employees in Sweden. For employees in Germany, please contact the Works Council (#berlin-work-council-election-board) for advice. We can’t offer any guidance to employees in other locales, but if you have information that would be useful, please share it on #k-union.
What to do if you’re called for an HR meeting
- You are entitled to have a representative with you in this meeting.
- If you are a Unionen member, or interested in becoming one today, contact klarna.unionen@gmail.com
- If you are a member of a SACO union (Akademikerna, Sveriges Ingenjörer for example), or interested in becoming one today, contact may.el-tabaa@klarna.com
- Do not agree to or sign anything in the meeting! Always take the time to review what you are being offered and understand the ramifications of it before making your decision. If you are a member of a union, call their contact number and get advice on the specifics of the offer you have.
- You are entitled to record the meeting. You do not need to have the consent of the other participants in the meeting (regulated in Swedish law).
Probation period
- If you’re still in your probation period at Klarna not all things in this document apply. This is because employees in their probationary period are not yet protected by “Lagen om anställningsskydd”, LAS (last in, first out). Instead both you and your employer are at liberty to terminate your employment with 2 weeks notice (when there’s no collective bargaining agreement, CBA, in place that says otherwise).
NOTE! Information about sjukpenninggrundande inkomst, SGI, (sickness income index) and A-kassa (unemployment insurance) are still relevant!
PARENTAL LEAVE
- Being on parental leave in Sweden means you are extra protected. So if you reject the severance now (while on parental leave) and Klarna is later forced to start a real layoff process, and you are then deemed to be “last in, first out” your notice period (3 months) doesn’t start ticking until you are back from parental leave.
- If you’re not yet on your parental leave, the question you need to ask yourself (and the union!) is: do you think Klarna can start and finish an actual layoff process before you start your parental leave and how likely are you to be affected then (last in, first out)?
Sebastian himself said such a process takes 6 months, which is a minimum if the layoff affects 100+ employees, in such a case it must be reported to the Unemployment agency (Arbetsförmedlingen) six (6) months in advance. If the layoff affects less than 100 people it’ll still probably take months to carry out, but it no longer requires a 6 month heads-up to the Unemployment agency.
So if you’ll be on parental leave by the time a layoff would happen, and you don’t like the severance deal they’re offering, staying employed on parental leave for 12+ months (or however long you were planning) is definitely worth considering.
This protection of employees on parental leave is regulated in chapter 11 § 3 (paragraph 3) of Lagen om anställningsskydd (LAS).
Scenario A: Employee currently on parental leave
You are currently on parental leave, you are offered severance and you reject it. Later, in October 2022 Klarna declares actual layoffs and it turns out you are affected. However, you are still on your parental leave, which protects you from being impacted right now, instead you continue on with your parental leave until 1st September 2023 (the date you planned to be back at work).Once you’re back on 1st Sep 2023 your 3 months notice starts ticking.During this whole time you will count as a full time employee of Klarna, your SGI will be safe (see FAQ on SGI), your RSUs will vest and you’ll collect pension deposits.
Scenario B: Employee about to go on parental leave
You’ve planned to start your parental leave sometime in the coming 1-2 moths. Let’s say 20th of June. You’re given severance. You reject it. 20th of June comes around, you’re still employed by Klarna and all is well. You start your parental leave. Later, in October 2022 Klarna declares actual layoffs and it turns out you are affected. However, you are still on your parental leave, which protects you from being impacted right now, instead you continue on with your parental leave until 1st September 2023 (the date you planned to be back at work). Once you’re back on 1st Sep 2023 your 3 months notice starts ticking.During this whole time you will count as a full time employee of Klarna, your SGI will be safe (see FAQ on SGI), your RSUs will vest and you’ll collect pension deposits.
Last in, first out (turordningsregler and LAS)
- Normally with layoffs the principle “last in, first out” applies (this is regulated in the Swedish law “Lagen om anställningsskydd”, LAS). However, when buyouts with severance packages (avgångsvederlag) are involved LAS can be circumvented by the employer “agreeing” with the employee to terminate their employment (by “buying them out”). In these cases LAS does not apply.
Notice period (uppsägningstid)
- All permanent employees have a notice period regulated in their contract. Normally 3 months. During this period you are still considered en employee of Klarna. This notice period still applies even when you’re being “bought out”. It’s also common to be exempted from work during your notice period (with full pay!) because of the nature of these buyouts. Read the fineprint!
WORK VISA
- Your 3 months timer to find a new job in Sweden to renew/take over your work VISA starts from your last day as employed by Klarna. Which is NOT when you sign the agreement, it’s the last day of your notice period. Meaning if you’re a permanent employee at Klarna you have approx 6 months (3 months notice + 3 months unemployment) to find a new job. Or, in the case of probation employees, you have 2 weeks + 3 months from the day you sign the agreement.
Severance packages (avgångsvederlag)
- Avgångsvederlag (severance package) counts as salary in Sweden. Meaning after your notice period (3 months or 2 weeks on probation) + the severance package months (= severance package/your average salary last year) are up, you are eligible for unemployment insurance (A-kassa) if:
- you are a member of an A-kassa
- you fulfill the requirements for receiving unemployment insurance (differ between A-kassor)
- Normally severance packages are paid out at the end of your notice period as a lump sum.
- Severance packages (and other one time payouts) are taxed with a standard percentage north of 50% (depends on our income level). This is to make sure you don’t inadvertently end up paying too little tax the year you receive the severance. Once you finish your income tax declaration (deklaration) the following year you’ll receive a lot of it back. Normally the % diff between whatever you were taxed (50%+) and your regular income tax %.
Unemployment insurance (A-kassa)
- Membership in A-kassa is union-based (Unionen/Sveriges Ingenjörer etc) and the requirements to be eligible for unemployment insurance differ between A-kassa providers. To receive the highest compensation from Unionen (for example) you need to have been a member for 12+ months and worked at least 60 hours/month for 6 out of the last 12 months. Please contact your union to find out about their requirements.
- Unionens A-kassa (Unionen)
- Akademikernas A-kassa (Sveriges Ingenjörer)
Sickness insurance income index (sjukpenninggrundande inkomst, SGI)
- Another important thing in Sweden is SGI (“sjukpenninggrundande inkomst”), sickness insurance income index. This is calculated by Försäkringskassan from looking at your taxable income, and is the basis for how much compensation you’ll receive in case of long term sickness or parental leave. When you become unemployed your SGI is “safe” for 3 months, after that it resets and your sickness insurance/parental leave insurance plummets. To make sure this doesn’t happen you must actively register yourself at Arbetsförmedlingen (Swedish Public Employment Service) as “looking for work”. It’s recommended to do so right away on your first day of unemployment. Here’s the link.