Collective agreements in Sweden: what foreign employers need to know

Why Swedish pay is set by agreement rather than by law

Many foreign employers look for a Swedish minimum wage and find none. Under the Swedish model, the state leaves pay to the labour market parties. The Working Hours Act limits how much people may work, but it does not say how overtime is paid, and no statute sets unsocial hours supplements. Those amounts come from collective agreements, which the Co-determination Act (MBL) defines as written agreements on employment terms between an employers' organisation or an employer and a trade union. A typical sector agreement covers minimum pay, working time, overtime and supplements, notice periods, probation and annual pay revisions. Agreements are also allowed to deviate from parts of the Employment Protection Act and the Working Hours Act, which can give a bound employer more flexible rules than the statutes offer. Employers bound by an agreement normally apply its terms to everyone doing the covered work, union member or not.

For international companies the agreements matter even when you never sign one. When you recruit from outside the EU/EEA, the Swedish Migration Agency requires salary and insurance on par with collective agreements or what is customary in the occupation. Since 1 June 2026 the salary must also reach at least 90 per cent of the median salary in Sweden. A foreign company that posts its own staff to Sweden for a limited period falls under the Posting of Workers Act, which decides which Swedish terms apply and limits what unions may demand from the foreign employer. And a Swedish client, especially in construction or public procurement, will often ask its suppliers to show a collective agreement or equivalent terms before work starts. Treat the relevant sector agreement as your benchmark from the first budget, not after a union or a client raises it.

Three routes: employers' organisation, hängavtal or no agreement

The most common route for a private company is membership of an employers' organisation that has signed agreements for its sector. The organisation negotiates with the unions, and as a member the company becomes bound by the agreements covering the work it carries out. Membership costs a fee, but it comes with employment law advice, support in negotiations and disputes, and a say in the next bargaining round. Before applying, find out exactly which agreements will apply. A company with both warehouse staff and office employees may need one agreement for blue-collar workers and another for white-collar staff, and a business running several kinds of operations can end up under more than one union's agreement. Ask the organisation to list them in writing. Membership also brings obligations under MBL, such as negotiating with the union before major changes to the business.

A substitute agreement (hängavtal) is signed directly with a union without joining an employers' organisation. The content is usually the sector's standard agreement, so employee terms are the same, but you negotiate alone, cannot influence the text, and the union may charge administrative fees. This route often comes up when a union contacts a company that has staff within its field. The third route is to have no agreement. That is legal and common among small firms, but there is no peace obligation, so a union may use industrial action such as a blockade to press for an agreement. An employer already bound by an agreement for the work is better protected, since 2019 rules restrict industrial action against employers that have one. A bound employer must also negotiate before hiring contractors or agency staff, and the union may in some cases veto the arrangement.

Insurance, pension and staffing agencies with agreements

Insurance is often what persuades a small employer. For private-sector blue-collar workers, collective agreements include insurance with AFA Försäkring covering workplace injury, long-term sickness and death, plus the occupational pension Avtalspension SAF-LO. Fora is the service company that signs the insurance agreements, invoices premiums and administers the pension plan. White-collar employees are covered by the ITP plan, administered by Collectum. A company bound through an employers' organisation must sign an insurance agreement with Fora when it has employees. According to Fora, companies without a collective agreement can also sign one, covering all employees, but the insurances included differ from those that come with an agreement. The statutory work injury insurance applies to all employees regardless, and the agreed insurance adds to it. Sort this out before the first employee starts, because an accident is not the time to discover a gap.

Staffing agencies in Sweden have their own agreements. For blue-collar staff, Bemanningsavtalet is signed between Kompetensföretagen, part of the employers' organisation Almega, and the LO unions, and it follows the employee from one client sector to the next. While on assignment, the worker's pay generally follows the average pay of client employees doing the same job, and permanent employees of the agency are entitled to guaranteed pay between assignments. The Temporary Agency Work Act (lag om uthyrning av arbetstagare) adds equal treatment: during an assignment, agency staff should have at least the basic working conditions they would have had if hired directly by the client, with exceptions the law and collective agreements allow. Talea Work is bound by a collective agreement, and the staff we hire out are our own employees with pension and insurance in place. For a client, that removes the question of which agreement applies, while supervision and the work environment on site remain with you. Call +46 70 090 10 52 to discuss a need.