Faroese Tax Authority projects cost of reduced workweek at 280 million DKK

The Faroese Tax Authority has conducted an overall assessment of the financial impact of a reduced workweek on the government and municipalities, specifically concerning wages and related costs. The findings indicate that the shorter workweek will cost the country 280 million DKK. Additionally, both the government and municipalities will see an increase in tax revenue, amounting to 100 million DKK.

However, this projection is contingent upon the absence of efficiencies in the healthcare, social care, and education sectors. It is also expected that employees working reduced hours will maintain their current workload.

Furthermore, the Tax Authority has estimated that if the workweek for employees in the private sector is shortened by three hours, it will impose an additional cost of 500 million DKK in increased salary, pension, and labor market expenses.

In discussions surrounding the shorter workweek, Ingilín D. Strøm, the Minister of Social Affairs, addressed MP Beinir Johannesen regarding the financial implications. When efforts to shorten the workweek began, a tripartite consultation was established, involving key stakeholders from the labor market. Various assessments have been made regarding the costs associated with the reduced workweek; however, significant uncertainty remains throughout these evaluations. The parties involved in this consultation do not agree on the methods for making these calculations.

According to the government agreement, plans are in place to gradually reduce the workweek down to 37 hours.