- Overview: Denmark
- Global PEO and Payroll
- Global HR Compliance
- Work Permit for Hiring Expats via Global EOR
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Denmark
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Denmark Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Denmark and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Denmark as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Denmark instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Denmark .
We are experts in global workforce employment in Denmark, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Denmark.
See Hiring and Firing Workforce in Denmark Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Denmark or would like to get more details.
Hiring and Firing Workforce in Denmark Guide
Denmark with its high-income economy is a sure place for business activities. Denmark is considered as one of the least difficult and in fact, the best place to do business in. The country has a very high living standard, highly educated and ambitious workforce, top-notch IT/ITC infrastructure and whatnot.
Acumen International is determined to help you harness the incomparable benefits of doing business in Denmark, hence has provided a workable solution that can help you easily expand your business there at almost stress zero level and in a compliant manner.
Before we go ahead to explore how Acumen International can help you expand to and succeed in Denmark, we will first consider a few fundamental things about employment in the country.
# Employment Contracts
Employees who work a minimum of average 8 hours a week and whose employments are meant to last a minimum of one month are entitled to a written contract from their employers. For such employees, their contracts of employment must be given to them within the first month of commencing work. A contract of employment must contain the main terms and conditions of an employment relationship: job description, employees position and duties, work site, official employment start/day date, daily/weekly working hours, salary and payment dates, paid leave entitlements, terms of notice of termination and relevant collective agreement.
Minimum statutory employment rights
# Hours of work
The number of daily/weekly regular hours an employee may work is governed by the relevant collective agreement or individual contract, in the case of the absence of collective agreement. According to the Act regulating employment in Denmark, employees must not be allowed to work more than 48 hours on average over a 4 months reference period.
A normal working week runs from Monday to Friday and office hours are usually between 8 a.m. or 8.30 a.m. and 5 p.m. Most collective bargaining agreements contain rules on working hours, and the normal number of working hours is 37-37½ per week.
# Probation period
There is no national legislation on probationary period. Salaried workers, however, usually use up to 3 months’ probation period when necessary. An employee and/or the employer have the right to end their employment relationship during the probation period. This can be done after an earlier 14 days’ notice has been given.
# Annual leave
Employees in Denmark have the right to observe the 12 public holidays in the country: New Year’s Day; Maundy Thursday; Good Friday; Easter; Easter Monday; Common Prayer Day; Ascension; Pentecost; Whit Monday; Boxing Day (Dec. 26). Additional holidays might be provided for by a collective agreement. Employees are entitled to 25 working days of annual paid leave accumulated in the preceding calendar years of a public holiday on a monthly basis – 2.08 days per month of service. Salaried employees are entitled to their complete regular pay while on leave, whereas hourly paid workers are entitled to an allowance that is equal to 12.5 percent of their hourly pay.
The holiday year runs from 1 May to 30 April.
# Parental leave
Females employees are entitled to 18 weeks of maternity leave, 4 weeks during pregnancy and 14 weeks afterwards. It is important to note that only two weeks out of the statutory postnatal leave is mandatory. Male employees have the right to a 2-week parental leave during the first 14 days of child birth.
Afterwards, both parents are entitled to split 32 weeks of parental leave, which can be further extended by another 14 weeks.
According to the law, parents can receive a total of 52 weeks of paid leave per child from the government. The amount that the parents are entitled to is less than the amount of a full salary. However, many companies are likely to have an employee agreement in place in which they pay your full salary for a period of time. Many private companies in Denmark have this kind of arrangement. In this situation, the amount paid by the government is reimbursed to the company, which in turn pays the parent’s full salary. At the point in which the employee’s right to full salary during maternity/parental leave at the company stops, the government benefits are then paid directly to the employee.
There is no prohibition as such against terminating the employment of a pregnant employee or an employee on leave; however, the employer is not allowed to let the pregnancy/birth have any influence on the decision to terminate the employment. The burden of proof rests with the employer and is in fact very difficult to satisfy. In conclusion, you should always be careful about giving notice of termination to a pregnant
employee or an employee on leave without consulting your legal advisor beforehand. An employer who is not able to prove that the termination was in no way related to the pregnancy/birth will be liable to pay compensation. Such compensation will at least amount to 6-9 months’ salary, possibly a higher amount.
Employees are entitled to take leave of absence when they are ill and in some cases, are allowed to take time off when their child is sick. An employee who desires to take a sick leave is required to inform his employer about that from the onset of sickness. Under the Danish Sickness Benefit Act, sickness benefits are paid to the employee for the first 14 days of the employee’s absence. After 14 days, the sickness benefits are paid by the local authority. This rule may not apply to blue-collar workers whose sick benefits are paid according to what is required by the collective agreement.
The number of overtime an employee can work, as well as its rate of compensation is regulated by a collective agreement.
# State minimum salary
None; instead, negotiated between unions and employer associations; the average minimum wage for all private and public sector collective bargaining agreements was approximately DKK 110 (nominally $16) per hour, exclusive of pension benefits.
Employees can be remunerated on an hourly, weekly, bi-weekly or monthly basis. Whichever be the case, an employer is obligated to pay his employees a sum that must not be less than the pay rate provided by the trade union agreement.
# Employment termination
Compared to many other jurisdictions, the Danish rules on termination of employment are relatively uncomplicated. The notice period is normally determined by the Salaried Employees Act, collective bargaining agreement or the individual employment contract.
Salaried employees are entitled to a notice period of 1-6 months, depending on the length of employment. In some cases the statutory notice period has been prolonged by individual agreement. The notice periods contained in the collective bargaining agreements vary a great deal, but are typically shorter than those of the Salaried Employees Act.
In relation to some employees, the termination must be reasonably justified either in the conduct of the employee or the circumstances of the employer. Unjustified terminations may cause the employer to become liable to pay compensation to the employee. Before effecting a notice of termination it should be clarified whether the termination will be lawful and the possible consequences of a termination.
At the termination of an employment relationship, white-collar employees are entitled to a cash compensation that varies in amount depending on the length of service. An employee who is more than 30 years of age may be paid up to their 3 months’ salary. An employee who has worked for his employer for a minimum of 10 years is eligible to get up to his 4 months’ salary. An employee who has worked for a minimum of 15 years has the right to up to his 4 months’ salary.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Denmark by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.