When an employee becomes ill, the employer must calculate sick pay in accordance with the provisions of the Norwegian National Insurance Act (Folketrygdloven). The calculation is based on the employee’s previous income as reported through the a-ordningen system. During the employer’s payment period, the sick pay base is determined by the current monthly salary, which is generally calculated as the average income from the last three months prior to the employee becoming incapacitated. This ensures that the calculation reflects the employee’s normal level of earnings.
If the employment relationship has lasted less than three months, the sick pay base must be calculated based on the actual income earned during that period. If a permanent salary change has occurred during the calculation period or after the last reported income but before the employee became sick, the new salary must be used. In such cases, the employer must adjust the calculation to ensure the sick pay base reflects the updated income level.
Authorized unpaid absence (for example, holidays, parental leave, or temporary layoff) must not reduce the sick pay base. In these cases, the employer should estimate the income the employee would have earned if they had worked and include this in the calculation. This ensures that the sick pay amount is not artificially reduced.
For example an employee becomes sick on April 12, and the calculation period for sick pay covers January, February, and March. The employee’s monthly salary is NOK 25,000, but in February they took two weeks of unpaid leave and therefore received only NOK 12,500. If the employer does not correct for this absence, the sick pay base will be lower than it should be. The correct approach is to calculate the income as if the employee had worked the entire period.
If the employee has unauthorized unpaid absence, the opposite applies – such absence reduces the sick pay base. In this case, the lower income caused by the absence is used as the basis for calculation, which means the employee will receive a lower sick pay rate throughout the sick leave period. In summary, authorized unpaid absence should not affect the sick pay base, while unauthorized unpaid absence should reduce it. Furthermore, the employer must adjust the calculation when employment has lasted less than three months or if there has been a change in salary. Correct calculation of sick pay is essential to ensure both employer and employee comply with the requirements of the Norwegian National Insurance Act (Folketrygdloven).