Here you are, living in Sweden, and you’ve finally got that elusive job offer. You’re about to accept, but wait! There are several questions you should be asking your employer first. And many of them relate to mysterious ‘collective agreements’.
But what on earth is a collective agreement, we hear you ask?
Collective agreements (kollektivavtal) are a fundamental part of the Swedish model (not to be confused with Malin Åkerman) and, put simply, are an essential component of working life in Sweden.
“The working market in Sweden is not based on law but on the conditions established between trade unions and employers in collective agreements,” says Annika Creutzer, who is one of Sweden’s leading financial journalists and an economics advisor.
So now I know what it is, does this company have a collective agreement?
Chances are your potential employer will have a collective agreement. Approximately 90 percent of employees in Sweden are protected by these agreements and reap the perks such as extra vacation, better sick pay, more generous parental leave and a far bigger pension. All public sector jobs are covered by them and it tends to be generally only start-ups that opt out of them.
This all sounds great, but will I get an annual pay rise?
Yes! A collective agreement means that you are free to negotiate your salary and annual pay rises. In some sectors, the pay increase can be as much as 3 percent year-on-year.
If you're a member of Saco, a politically independent central organisation for 23 unions, you get access to the best salary statistics in Sweden along with advice and information about salary negotiations. This really comes in handy when the time comes to negotiate your own salary, which is something you're always advised to do yourself.
Another good thing to note is that you can also get financial compensation for doing in-service training such as extra courses that often involve exorbitant fees.
So what happens if I slip and break my leg at work? Am I covered?
You get extra compensation if you miss work through illness or get injured in the workplace. Sweden’s Social Insurance Agency (Försäkringskassan) already pays out up to 80 percent of your salary (but only up to a salary of 28,000) and the remaining 20 percent can be topped up with a collective agreement.
What’s more, with a collective agreement you could get around 75-90 percent of your full salary if you’re off work due to sickness or injury. This is just one area where it can really make a difference for people in high earning jobs.
The calculator below helps you work out how much sick pay you would get with a collective agreement compared to without, as well as you how much more compensation you would get if you injure yourself at work.
What’s the parental leave situation here?
Sweden already has a well-envied parental leave system that includes 480 days of paid leave per child. Add in the perks of a collective agreement and you will earn even more money while you are at home with your child.
“You can get 90% of your salary for six months. That is more than under the existing system and it isn’t capped, so if you are a high earner then you will get more,” says Annika Creutzer.
The financial expert adds, “If both parents have a collective agreement then it is recommended that they both take six months each of parental leave.”
The below calculator helps you work out how much additional parental benefit you get with and without a collective agreement.
How much holiday do I get?
In a standard Swedish workplace, you will get 25 days of annual leave. That figure increases as you get older and the more years you are employed in the same job. With a collective agreement, you can negotiate to have an even longer vacation period.
“It is not uncommon to have six or seven weeks holiday as part of a collective agreement,” says Creutzer.
Will I get extra pay if I work overtime?
Absolut! Having a collective agreement means the rules and regulations concerning overtime are established from the outset. Expect better compensation as regards overtime and working unsociable hours. You can also negotiate remuneration to cover travel costs to and from your place of work.
What kind of pension contributions do you make for me?
Working in Sweden means you are guaranteed a state pension, but if you have worked here for 30 odd years then you will likely want to get a bit more than what the government dishes out. And with a collective agreement, you can get more kronor when you turn 65. Far more.
“Your pension is a key part of any collective agreement; that is where you will notice a great difference between what you will only get with a public pension. With a collective agreement, there is no cap if you are a high earner,” says Annika Creutzer.
She adds, “You get much more from the system when you are covered by a collective agreement particularly when it comes to your pension.”
Anything else I need to know?
Most Swedes are familiar with what a collective agreement is, the same can’t be said for new arrivals to Swedish shores. For example, there is no minimum wage in Sweden and not all employers use collective agreements.
“You need to do your homework and find out if your employer has a collective agreement in place before taking any job. You will only benefit from it.”
And remember, regardless of whether or not your workplace has a collective agreement, you should still join an arbetslöshetskassa (A-kassa) to protect your income.
Once you’ve been a member of Akademikernas a-kassa, an unemployment fund specifically for university graduates, for 12 months, you can get income-related benefits up to 910 kronor a day. Compare this to the 365 kronor you’d get from Sweden’s state-funded unemployment insurance fund, and you’ll see why joining an a-kassa is one of the best decisions you can make.
This article was produced by The Local Client Studio and sponsored by Akademikernas A-Kassa & Saco.