According to the World Bank, Denmark is not only the easiest country to do business in Europe, but is also ranked fourth easiest in the world. In this post, we provide information on employing a worker in Denmark.
Capital GES created this postcard series to help businesses that are considering expansion and hiring global staff. In this postcard series, members of our sales and business development team provide helpful tips on international employment. Below, we provide information on employment law in Denmark.
Denmark Overview
According to the World Bank, Denmark is not only the easiest country to do business in Europe, but is also ranked fourth easiest in the world. Its stable economy, flexible labour market, and advantageous geographical location (gateway to Europe and access to the other Nordic regions) offer many opportunities for investors and companies looking to expand their business globally.
Employing a worker in Denmark – Employment Laws to know
While hiring in Denmark is considered relatively straightforward, it is important to understand that there are some complex issues foreign companies face when employing staff in Denmark. Below we discuss several key points on employment law and statutory benefits that international companies may need to know when considering hiring staff (local or expat) in Denmark.
1. Contracts
Can I trial a worker using a fixed-term employment contract, as I am not sure whether it will work out in the long-term?
In Denmark, fixed-term contracts need to have a valid justification. Furthermore, a fixed-term contract must not exceed 24 months and may be renewed only twice. To ensure your worker stays fully compliant in Denmark, it is best to discuss your contract options with a local partner.
2. Termination Rules and Costs
What do I need to know about termination and severance pay in Denmark?
The notice period varies in length depending on if you are an employer or an employee. The employer can terminate an employee by giving a minimum of one month’s notice when the employment relationship has lasted up to six months, and then increasing according to the length of employment. On the other hand, employees must give one month’s notice regardless of their length of employment.
In all cases, a justification for dismissal must exist; otherwise, the employee can challenge the dismissal in court.
The second important aspect is severance pay. Severance pay varies according to tenure and can go from a minimum of one month’s salary after 12 years of employment to a maximum of three months’ salary for employment relationships lasting more than 18 years.
3. Statutory Employee Benefits
What are the statutory employee benefits in Denmark?
Statutory paid holiday
The statutory paid holiday entitlement in Denmark is 25 days per year. Employees are entitled to a statutory holiday allowance of 1% of their gross salary and additional remuneration elements, to be paid as a lump sum in May.
Parental leave
Maternity
Maternity leave in Denmark starts four weeks before birth and extends up to 14 weeks after the baby is born. During maternity leave, employees receive 50% of their salary throughout the entire leave. This is funded and paid for by the local authorities.
Female employees are also entitled to paid time off in connection with pregnancy-related health examinations that cannot take place outside working hours. This is funded by the employer.
Paternity
Fathers are entitled to two weeks of paternity leave following the birth of the child. There is no statutory right to paid leave. Employees are entitled to receive leave benefits from the Danish authorities if the relevant conditions are met.
Parental
Maternity and paternity leave entitlements are subject to various employment history requirements. In addition, all employees are entitled to varying amounts of maternity/paternity leave during the first years of the child’s life.
Each parent is entitled to 32 weeks leave, with the possibility of extending the leave up to 46 weeks. This leave is paid for 32 weeks by the Danish authorities provided that the relevant conditions are met. The employer is not required to pay the employee during parental leave periods. Additionally, parents are entitled to return to the same job they were on before they took parental leave.
Sick Pay
In Denmark, employees are entitled to sick pay from day one. This is paid by the employer. From day 15, employees must provide a medical certificate. From day 30, the employer is entitled to partial reimbursement by the municipality where the employee resides.
How Capital GES Can Help You Expand and Employ Workers in Denmark
If you are considering expanding into Denmark, Capital GES can help. For further information, you can contact our European office on +41 32 732 9700 or email us at sales@capital-ges.com to see how you can expand your business and hire workers in Denmark.
