Sweden Increases Company Fines to Bolster Employee Safety

Effective 1 January 2020, Sweden increased the maximum fines that can be imposed on companies from 10 million Krona (SEK) to 500 million SEK. The measure aims to increase the personal and physical safety of workers.

Company fines are regulated in the Swedish Criminal Code and can be imposed on companies that have committed certain crimes. For example, a company can be fined if it does not comply with the duties that are set out in the Work Environment Act. The act requires employers to take all necessary precautions to prevent occupational hazards and accidents and to ensure an overall safe work environment.

A company may be fined if the crime was committed:

• within its scope of activities;
• by someone in a leading position in the company; or
• by someone within the company who is responsible for supervising the activity in question.

Note that a company may not be fined if it has done everything within reason to prevent the crime from occurring.

The higher-level fine was prompted by an increase in work-related deaths and injuries in Sweden. For example, there were 27 work-related deaths in the first half of 2019, an average of 1 worker per week.

However, it should be noted that the higher fine of 500 million SEK may only be imposed on companies of a certain financial standing. In order to fall within this category, the company must either be a listed company, or it must meet more than one of the following requirements:

• The company has had at least 50 employees for at least 2 years.
• The company has had a balance sheet of 40 million SEK or more for at least 2 years.
• The company has had minimum net revenue of 80 million SEK for at least 2 years.

The higher fines are aimed at encouraging employers to follow all required safety measures in the workplace. The previous maximum amount of the fine was not considered to be effective enough to prevent larger companies from deviating from the requirements set out in the Work Environment Act.

Written by Louise Lindahl of Glimstedt and Roger James of Ogletree Deakins

© 2020 Glimstedt and Ogletree, Deakins, Nash, Smoak and Stewart, P.C.