Denmark HR Information

Updated on: 2025/03/11 04:48 (UTC)

Overview

Various laws address the relationship between an employer and an employee in Denmark, including the Salaried Employees Act, the Vacation Act, the Act on Maternity Leave and Allowance, the Act on Sickness Benefits, the Act on Workers’ Compensation and the Act on Working Hours.

Denmark is a member of the European Union, and its legislation and regulations conform to EU standards on almost all issues.

Hiring

Employment Contracts

A written employment contract is required under Danish law and must be finalized no later than one month after the commencement of employment.

The Act on the Employer’s Duty to Inform Workers About the Employment Relationship (Danish) requires employers to draft employment certificates describing the most important terms of employment, including the duration of employment, working hours, description of the work, and employees’ rights.

The employment of salaried employees is regulated by the Danish Salaried Employees Act (Danish). A salaried employee is typically a shop assistant or an office worker who is employed for more than eight hours a week on average and occupies a position in which he or she works under the instructions of the employer. The Salaried Employees Act contains mostly mandatory provisions on notice periods, right to severance compensation in connection with dismissal, maternity leave and noncompetition and nonsolicitation clauses.

The employment of blue-collar workers is mainly regulated by collective bargaining agreements. A large group of blue-collar employees is covered by the Collective Bargaining Agreement for Industry entered into between the Confederation of Danish Industries and the Central Organization of Industrial Employees in Denmark. Among other terms of employment, the collective bargaining agreement contains provisions on wages, pensions, holidays and notice periods.

Unless otherwise agreed, an employee registered as a chief executive officer with the Danish Business Authority is normally not covered by the Salaried Employees Act, the Danish Vacation Act or other mandatory employment law acts.

Remote Work. Effective April 30, 2022, employers must provide tools and technology that allow employees to work remotely if they regularly perform screen work at home for at least two days a week. Specific requirements also must be met regarding chairs, tables, and lighting in the remote workplace.

The Employment Contracts Act implements the EU Directive on transparent and predictable working conditions and comes into force on July 1, 2023. The Act applies to employees with a predetermined or actual working time of an average of three hours per week, based on a four-week reference period. This is a decrease from the previous average of 8 hours per week. It also applies to “zero-hour contracts” (employees with no assigned hours but who are required to be on call).

The Act extends the employer’s current duty of disclosure to include a range of additional information, enumerated within the law, about the terms of the employment relationship within a statutorily determined timeframe. The act also places limits on the duration of probationary periods, which generally cannot exceed six months, as well as the number of hours an employee can be required to be “on call”. Employees are allowed to engage in work outside of their employment contract and cannot be punished for doing so.

Restrictions on Hiring

The minimum age for employment is 15 for full-time work, 13 for part-time.

Recordkeeping

The following information must be kept for each employee for a minimum five years:

• name,
• date of birth,
• tax registration number,
• address,
• records of wages paid (including overtime, bonuses and tax-free reimbursements) and the calculation and withholding/payment of taxes and
• if an employee is terminated, records of employee notification, correspondence with the competent authorities regarding dismissal, outplacement and calculations of termination payments.

Background Checks

There is no statutory regulation on background checks. Under the Danish Data Protection Act, (Danish) however, employers are in some situations restricted in their use of personal data, which can include data about employees and applicants. Under the Danish Act on Use of Health Data in the Labor Market, employers are only entitled to request health data from an applicant to determine whether the applicant suffers from or has suffered from a disease that would adversely affect the applicant’s capacity to perform the job in question.

Some jobs require special knowledge of the employee’s health, and employers are allowed to ask the necessary questions in those cases. Requiring a general medical examination is only allowed in very limited circumstances—for example, for health and safety reasons—to determine whether the applicant can perform the job in question. In those cases, the employer is entitled to reject an applicant who refuses to undergo a medical examination.

Noncompetition Agreements

Denmark adopted new rules on noncompetition clauses in 2016. The statute only applies to contracts entered into after Jan. 1, 2016, and does not require employers to amend existing contracts. Under the rules, noncompetition agreements:

• are limited to one year in duration,
• apply only to highly trusted employees who handle confidential information, and
• cannot be more restrictive than necessary to protect the employer’s business.

The rules also increased the amount of compensation employers must pay employees who sign a noncompete agreement and forbids them from offsetting compensation against the former employee’s new salary.

On June 9, 2018, Denmark passed a new law that implements the Directive of the European Parliament and the Council on Protection of Trade Secrets. The statute imposes a six-month deadline for initiating legal proceedings in case of unlawful use of trade secrets.

Reference Citations

Employment Contracts: Act on the Employer’s Obligation to Inform Workers About Their Employment Conditions, No. 1011 of Aug. 15, 2007, §§ 1-2 (Danish)

Noncompetition Agreements: Act on Employment Clauses, 2015, §§ 5-10 (Danish)

Immigration and Work Permits

In General

Citizens in the Nordic countries, the European Union, the European Economic Area and Switzerland have the right to work in Denmark. Other foreign nationals need to have a residence and work permit before they can begin working, although in certain cases foreign nationals can perform certain work-related activities—e.g., participating in meetings, negotiations, briefings and training—while in Denmark on a visa without holding a residence and work permit.

Visas and Work Permits

Citizens in the Nordic countries—Finland, Iceland, Norway and Sweden—do not need a work permit or visa to work in Denmark. In addition, Denmark subscribes to the principle of free movement of labor in the European Union (EU), under which every EU citizen and Swiss national has the right to work in any EU member country. The EEA includes all EU members, Iceland, Liechtenstein, and Norway.

In most other instances, foreign nationals need to have a residence and work permit before they can begin working. In certain cases, however, foreign nationals can perform work-related activities while in Denmark on a visa without holding a residence and work permit.

If employees will be staying fewer than three months, they are allowed to perform certain types of work-related activity even if they do not have a residence and work permit. Such activities include teaching or attending a course or participating in meetings, negotiations, briefings and training.

Employees will need a residence and work permit if the point of their visit is to create a product, change a product or contribute to the output of a company in any way. If the employer has supplied equipment, machinery, computer programs or the like to a Danish company, relevant employees may fit, install or repair this while in Denmark on a visa stay.

A number of schemes have been designed to make it easier for highly qualified professionals to get residence and work permits in Denmark:

• Pay limit program. This program applies to foreigners offered a job with an annual salary of at least 448,000 kroner. An applicant must be able to produce a written job contract or job offer that specifies salary and employment. Some applicants must produce an additional authorization; for example, doctors must be qualified by the Board of Health. If employees get a residence and work permit on the grounds of an unlimited job contract (that is, a job contract with no expiration date), the duration of the permit will normally be four years. After this, employees can apply for an extension of the permit if they are in the same job.
• Fast-track program. The fast-track scheme enables certified companies with 20 or more employees to hire highly qualified foreign nationals on short notice without having to wait for an application to be processed by the Danish Agency for Labor Market and Recruitment. Foreign nationals can apply under the fast-track scheme if they meet the conditions of the pay-limit program, are employed as researchers, the purpose of the employment is a high-level education stay or the employment is for a short-term stay of no more than three months. Except in cases of a short-term stay, a residence and work permit under the fast-track scheme can be granted for a period of up to four years. A residence and work permit for a short-term stay cannot be extended and the three months cannot be divided into several stays. With a permit under the fast-track scheme, a foreign national can work alternately in Denmark and abroad without the permit lapsing.
• Positive list. The positive list specifies areas of employment currently experiencing a shortage of qualified labor. If the applicant has found work in one of the areas on the list, a residence and work permit will be granted immediately. An applicant must have a written job contract or firm job offer. The duration of the permit will normally be four years.

Note: Effective Dec. 1, 2022, the gross minimum salary requirements will be reduced from 448,000 kroner to 375,000 kroner for both the pay limit and fast-track programs. Also, companies will only need to have 10 employees to be eligible to use the fast -track scheme. These temporary measures will remain valid for three years. No new residence permits will be issued under the temporary measures if the gross unemployment rate in the country exceeds 3.75 percent or more than 15,000 foreign nationals obtain a residence permit under either of these two schemes.

Individuals can also be granted a residence and work permit if professional or labor market considerations warrant it, especially if the job offered is closely linked to their specific qualifications.

Penalties

Employers are responsible for ensuring that their foreign employees have the right to work in the country. Failure to do so can lead to fines and/or imprisonment. The typical fine is 20,000 kroner per month per person illegally employed.

Reference Citations

Visas and Work Permits: Aliens Consolidation Act, No. 863 of June 25, 2013 (Danish)

Nondiscrimination

In General

The Danish Act on Discrimination in the Labor Market prohibits both direct and indirect discrimination on the basis of race, color, religion, political opinion, sexual orientation, age, disability and national, social or ethnic origin. Sexual harassment is prohibited in the workplace and workplace culture should not be a factor in assessing whether a breach has occurred.

Pursuant to the Act, an employer is prohibited from discriminating against employees both in the recruitment process and during employment. For example, an employer is not allowed to advertise for an employee of a certain age or religion or to indicate in the advertisement that it does not wish to employ applicants of a certain race or sexual orientation.

Disability Discrimination

Provided they do not impose a disproportionate burden on the company, an employer is obligated to make necessary accommodations to ensure that a disabled employee can obtain employment.

Pay Discrimination

The Danish Act on Equal Remuneration prohibits direct and indirect discrimination in remuneration and salary on the grounds of sex. The employer is obligated to give men and women equal pay, including equal pay conditions, for the same work or for work given the same value.

Gender Pay Reporting: Employers with at least 35 employees, of which there are at least 10 of each sex, within the same work function must file annual information on each worker’s salary to the state data collection body Statistics Denmark. Under the amended Equal Pay Act, employers also must consult and inform employees of the wage gaps between men and women in the organization.

EU Pay Transparency Directive: As a member state of the European Union, Denmark has until June 2026 to transpose the minimum requirements of the EU Pay Transparency Directive into its national law or amend any current pay equity laws to conform with the directive, which aims to promote pay equity between men and women. The directive introduces requirements on gender pay gap reporting, salary history bans during the hiring process, and wage disclosure in job vacancy listings. The national law may go beyond the minimum requirements of the directive, but the law may not directly conflict with the directive requirements.

Other Forms of Discrimination

Gender Discrimination. Amendments to the Act on Equal Treatment entered into force on July 1, 2023, and now expressly require employers counteract sexual harassment in the workplace and implement specific measures to remedy any such cases.

Effective January 2022, Act No. 2591 amends the existing regulation on the prohibition of discrimination and the right to equal treatment to clarifying that LGBTI+ persons are protected against discrimination in the existing regulation.

The Danish Act on Protection against Dismissal Due to Organizational Matters protects employees against dismissal due to membership or nonmembership in a specific trade union or other organization.

According to the Danish Act on Part-Time Work, part-time employees may not be treated differently from full-time employees unless this is justified by objective circumstances. Consequently, part-time employees are (for example) generally entitled to bonus and pension contributions on a pro rata basis. They also enjoy special protection in connection with termination of employment.

The Danish Act on Fixed-Term Employment provides that the employer cannot treat a fixed-term employee differently than a comparable permanent employee unless this is justified by objective circumstances. Consequently, fixed-term employees are entitled to receive the same benefits as permanent employees.

The Act on the Use of Health Data provides that during a job interview an employer may generally only ask for health information relating to diseases of significant importance to the performance of the specific job.

Reference Citations

Nondiscrimination: Act on Discrimination in the Labor Market, No. 31 of Jan. 12, 2005, §§ 1-7 (Danish); Act on Equal Treatment of Men and Women as regards Access to Employment

Disability Discrimination: Act on Discrimination in the Labor Market, No. 31 of Jan. 12, 2005, § 2 (Danish)

Pay Discrimination: Equal Pay Act, No. 556 of June 17, 2008 §§ 1-2 (Danish)

Other Forms of Discrimination: Freedom of Association in the Labor Market, No. 443 of June 13, 1990, § 1 (Danish); Act on Fixed-Term Employment, May 28, 2003, §§ 1-3 (Danish); Health Information Act, 1996, §§ 1-3 (Danish); Act on Equal Treatment of Men and Women as regards Access to Employment; Act amending the Act on equal treatment of men and women with regard to employment etc., Act on the working environment and Act on vocational training

Employee Privacy

Employee Data

On May 25, 2018, the General Data Protection Regulation (GDPR) superseded the Data Protection Directive as the primary law governing data privacy in the EU. The GDPR establishes minimum requirements for the processing of employee data and allows EU member nations to introduce more restrictive local legislation. Stricter requirements can also be established in collective bargaining agreements or work contracts. For more information, see the In Focus: International Privacy Laws.

The GDPR was implemented by the Danish Act on Data Protection in 2018. Hence, data protection and processing in Denmark is regulated by the GDPR and supplemented by the Act. The Act allows the processing of sensitive data in the course of personnel administration in the employment context. The Act also establishes that consent may be used as a legal basis for the processing of HR data.

Employee Monitoring and Surveillance

Generally, employers must inform the local Works Council at least six weeks before implementing an employee monitoring program so that opinions and suggestions from employees can be factored into the company’s decision on whether to monitor workers. Monitoring can be implemented before notifying the Works Council if the purpose of the monitoring is lost by waiting or in case of compelling operational considerations.

Under the GDPR, employers can monitor employees only if there is a lawful basis for doing so. Lawful bases can include preventing employee misconduct, deterring crime, and ensuring compliance with health and safety procedures. Employees must be given prior notice, and any data that is collected must be used and kept only to fulfill its original purpose.

Reference Citations

Employee Data: General Data Protection Regulation, 2016; Danish Act on Data Protection, 2018 (Danish)

Employee Monitoring and Surveillance: General Data Protection Regulation, 2016

Compensation

Hours of Work

The Danish Act on Working Hours provides that average working hours in a period of seven days, as calculated over a period of four months, cannot exceed 48 including overtime.

The Danish Act on Working Environment stipulates that employees are entitled to a weekly day off, which if possible should be Sunday.

In addition, working hours should be arranged in such a way that employees are given a period of rest of at least 11 consecutive hours within each period of 24 hours.

Special regulations apply to night work and to work carried out by employees under the age of 18.

Minimum Wage

Danish law does not contain provisions on minimum wage.

Most collective bargaining agreements contain provisions regarding minimum salary, which may take the form of a minimum wage (typically used in industry) establishing an absolute minimum for compensation or a standard wage (typically used in the public sector) based on differences in salary step and job function.

Overtime

Danish law does not contain provisions on overtime pay, which is generally governed by collective agreement.

Wage Payment

Employees may be paid monthly, biweekly or weekly or by the hour for day workers. An employee should receive a payslip that shows taxes withheld, labor market contributions, supplementary pension fund contributions, personal allowance, annual leave pay and net pay.

Mandatory Bonuses

Danish law does not require employers to pay employees bonuses.

Reference Citations

Hours of Work: Danish Working Environment Act, No. 268 of March 18, 2005, §§ 50-51

Benefits

Vacation

An employee is entitled to 25 days of annual leave per year, earning 2.08 days of leave for each completed month of employment. Effective Sept. 1, 2020, the statutory annual leave system also uses a holiday year (ferieår), which runs from Sept. 1 to Aug. 31. Employees may take leave accrued in a holiday year until Dec. 31 of the calendar year in which the holiday year ends. At least 15 days of leave, or all earned days if the employee has earned less than 15 days, must be taken in the period between May 1 and Sept. 30. Previously, the holiday year ran from May 1 to April 30. Annual leave earned in a calendar year could only be taken during the next holiday year, starting May 1 of the following calendar year.

The employee is entitled to take three consecutive weeks of vacation during the holiday year. If the employer prefers that the main part of the vacation be taken outside this period, it must enter into an agreement to that effect with the employee. Generally, the employer has to accommodate the employee’s wish to take the main part of the vacation during his or her child’s school vacation.

Up to one week of vacation may be carried over to the following year.

Employees who are entitled to one month’s notice or more and who are entitled to paid time off on public holidays and during sick leave must receive their full salary during vacation periods. In addition, these employees are entitled to an annual vacation bonus of 1 percent of salary. Employees paid on an hourly basis are entitled to a vacation allowance corresponding to 12.5 percent of salary.

The employer is required to pay the vacation allowance to the Danish Vacation Pay Fund on a quarterly basis, and employees receive their allowances from the fund when they take their vacations.

Some employment agreements and most collective bargaining agreements provide for an additional five special days off. Generally, these special days off are regulated by contract and do not follow the rules of the Danish Vacation Act.

Holidays

There are 11 public holidays in Denmark:

• Jan. 1: New Year’s Day
• Maundy Thursday
• Good Friday
• Easter Sunday
• Easter Monday
• Great Prayer Day (In 2024, holiday status will be revoked.)
• Ascension
• Whitsun
• Whit Monday/Pentecost
• Dec. 25: Christmas Day
• Dec. 26: Boxing Day

Employees generally do not work on public holidays. Salaried employees receive full pay for these days off. Whether other employees are compensated for holidays depends on the terms of individual or collective employment contracts. Effective Jan. 1, 2024, Denmark will abolish its Great Prayer Day public holiday—the fourth Friday after Easter—changing it to a normal working day.

A public holiday that falls on a weekend is not moved to another date.

Maternity Leave

A woman is entitled to 18 weeks of maternity leave, with four weeks before the due date and 14 weeks after the birth, under the Maternity Act, Consolidated Act No. 1070 of Nov. 14, 2012 (Danish). Two weeks of leave after the birth are compulsory. She may take an additional 32 weeks of parental leave after the 14th week, but the total amount of parental leave may not exceed 32 weeks per family that must be taken before the child’s ninth birthday.

Single mothers are entitled to 46 weeks of maternity leave.

Female salaried employees are entitled to 50 percent of their salary during maternity leave from four weeks before expected childbirth until 14 weeks after childbirth. Based on individual employment agreements or collective bargaining agreements, employees may be entitled to full salary during some of their maternity leave. An employer that pays salary during maternity leave may be entitled to reimbursement from the public authority Udbetaling Danmark.

Employees who are not entitled to any payment from their employers may be entitled to maternity/paternity pay from Udbetaling Danmark.

Employees must have been employed for at least 13 weeks and 120 hours to be eligible for maternity benefits. Employees on maternity leave are entitled to return to either their previous job or an equivalent job.

Note: From Aug. 2, 2022, mothers continue to have the right (Danish) to four weeks of prenatal leave and two weeks of maternity leave once the baby is born. In addition, mothers are entitled to 22 weeks of parental leave, 13 of which can be transferred to the other parent. (Of these 13 weeks, eight weeks can be taken before the child reaches age one and five weeks may be taken prior to the child reaching age nine.) The remaining nine weeks of parental leave cannot be transferred to another parent and are available until the child reaches the age of one.

From Jan. 1, 2024, single parents are entitled to 46 weeks of parental leave and may transfer part of their leave to a close family member, such as a sibling or grandparent. In addition, LGBT+ families may share family leave weeks with “social parents” of the child, which can include the legal parent’s spouse, the cohabitant partner of the legal parent of the child, or a known donor’s spouse.

Paternity Leave

Biological fathers and employees (male or female) who are legally, though not biologically, the child’s parent, are entitled to two consecutive weeks of paternity leave within 14 weeks after childbirth and to an additional 32 weeks of parental leave.

Fathers and nonbirth mothers are able to take their leave in nonconsecutive periods, as long as the leave is taken within the first 14 weeks after the birth and has been agreed with the employer.

Employees must have been employed for at least 13 weeks and 120 hours to be eligible for paternity benefits. Employees on paternity leave are entitled to return to either their previous job or an equivalent job.

Based on individual employment agreements or collective bargaining agreements, employees may be entitled to full salary during some of their paternity or parental leave.

Note: Effective Aug. 2, 2022, fathers continue to be entitled (Danish) to two weeks of paternity leave once the baby is born. In addition, fathers have the right to 22 weeks of parental leave, 13 of which can be transferred to the other parent. (Of these 13 weeks, eight weeks can be taken before the child reaches age one and five weeks may be taken prior to the child reaching age nine.) The remaining nine weeks of parental leave cannot be transferred to another parent and are available until the child reaches the age of one.

From Jan. 1, 2024, single parents are entitled to 46 weeks of parental leave and may transfer part of their leave to a close family member, such as a sibling or grandparent. In addition, LGBT+ families may share family leave weeks with “social parents” of the child, which can include the legal parent’s spouse, the cohabitant partner of the legal parent of the child, or a known donor’s spouse.

Sick Leave

Pursuant to the Salaried Employees Act, salaried employees are entitled to full salary, including bonuses, during sick leave.

An employer pays salary during the first 30 days of sick leave, after which the employer is entitled to reimbursement from the municipality. As a general rule, the employer’s right to reimbursement does not affect the employee’s right to full pay during sick leave.

Sick leave benefits generally are not available for more than 52 weeks during a period of 18 months. The amount an employee is entitled to depends on the employee’s hourly pay and weekly working hours.

An employee not covered by the Salaried Employees Act may be entitled to pay during sick leave under the relevant collective bargaining agreement or pursuant to the individual employment agreement. If the employee is not entitled to pay during sick leave, the employee may be entitled to sickness benefits under the Danish Act on Sickness Benefits.

Other Leave

Adoption Leave. Adoptive parents are entitled to a total of 32 weeks’ leave, which can be shared equally between them. Both adoptive parents receiving a child abroad are entitled to paid leave for up to four weeks prior to the reception. The four weeks may be extended by up to another four weeks if the reception of the child lasts longer than the expected four weeks, provided that the delay is not due to the adoptive parents’ circumstances. The adoptive parents are entitled to paid leave for 14 weeks after reception of the child. The parents can share the 14 weeks of leave between them, but they can only take leave one at a time. Employees on adoption leave are entitled to return to either their previous job or an equivalent job.

Bereavement Leave. From Jan. 1 2021, parents whose child passes away before it reaches the age of 18 are entitled to 26 weeks of paid bereavement leave (Danish).

Compassionate Leave. An employee is entitled to take unpaid leave if the employee’s immediate presence is urgently needed due to a relative’s sickness or an accident.

Parents of Twins Leave. Denmark granted additional parental leave to parents of twins under a law, effective May 1, 2024. The amendments to the Maternity Act, which covers maternity and paternity leave and benefits, allow 13 additional weeks of leave for each parent after the birth or adoption of twins. The leave must be taken within a year of birth or adoption.

Pensions and Social Security

Danish citizens with permanent residence in Denmark are entitled to old age pensions payable by the state in accordance with the provisions of the Danish Act on Social Pensions. The old-age pension is currently payable from the age of 65 for persons born before Jan. 1, 1954; 65 and one-half for persons born from Jan. 1, 1954, to June 30, 1954; 66 for persons born from July 1, 1954, to Dec. 31, 1954; 66 and one-half for persons born from Jan. 1, 1955, to June 30, 1955; and 67 for persons born after June 30, 1955.

While employers are not legally obligated to provide pension schemes for their employees, many collective bargaining agreements include pensions covering blue-collar and white-collar employees. In the large majority of cases, these pensions take the form of defined contribution plans.

In the absence of a collective bargaining agreement, a private pension scheme, financed through contributions from the employer and the employee, may be established. Usually, two-thirds of the contribution is paid by the employer and one-third by the employee.

The Danish Act on Labor Market Supplementary Pensions (Danish) provides that all employers and employees must contribute to a supplementary pension, which is paid in addition to the old age pension. Monthly employer and employee contributions depend on hours worked per month and whether the employee is paid on an hourly, weekly or monthly basis.

Workers’ Compensation

Under Danish law, employers are obligated to contribute a fixed amount per year per employee to the Labor Market Industrial Disease Insurance plan. The amount varies depending on the number of industrial diseases in the relevant line of business.

Pursuant to the Danish Act on Workers’ Compensation, employers are required to take out insurance that covers industrial injuries. The law has been expanded to include “temporary” injuries, which are defined as injuries that do not necessarily require treatment to heal. Examples include minor physical wounds or psychological reactions that pass without intervention within a short period of time

Employers are not obliged to provide health insurance to employees, although many do.

Reference Citations

Vacation: Holiday Act, No. 762 of June 27, 2011 (as amended), §§ 8, 14, 24 (Danish)

Holidays: Holiday Act, No. 762 of June 27, 2011 (as amended) (Danish)

Maternity Leave: Right to Leave and Daily Allowances for Maternity, No. 872 (as amended) §§ 6-8 (Danish)

Paternity Leave: Right to Leave and Daily Allowances for Maternity, No. 872 (as amended) §§ 6-8 (Danish)

Sick Leave: Salaried Employees Act, No. 542 of June 24, 2005, § 5 (Danish); Act on Sickness Benefits, No. 48 of January 2016, §§ 1-4 (Danish)

Other Leave: Right to Leave and Daily Allowances for Maternity, No. 872 (as amended) § 8 (Danish)

Pensions and Social Security: Order on Labor Market Supplementary Pension, No. 1110, October 2014 (Danish)

Workers’ Compensation: Danish Workers’ Compensation Act, No. 154 of March 7, 2006, § 48 (Danish)

Labor Relations

In General

Employment laws provide a framework within which collective bargaining agreements set most of the employment terms and conditions, including minimum wage and working hours. Danish law requires that in businesses that employ 35 or more people employees’ representatives be informed in a timely manner of issues of importance to the employees and that they be consulted on the basis of this information.

Following a transfer of ownership, all rights and obligations under individual employment agreements and collective bargaining agreements are automatically transferred from the predecessor employer to its successor.

Right to Organize

The contractual relationship between employer and employee is often governed by collective bargaining agreements in which most of the employment terms and conditions are specified. Employment laws traditionally exist to provide a framework for collective bargaining and to set a minimum standard of employee rights and obligations.

Most trade unions and employers’ associations in the Danish labor market have joined together in large central organizations. The major central employer organization is the Danish Employers’ Confederation (DA). The major central trade unions are the Danish Confederation of Trade Unions (LO), the Salaried Employees’ and Civil Servants’ Confederation (FTF) and the Danish Confederation of Professional Associations (AC).

The central organizations enter into general agreements, which provide a framework for underlying collective bargaining agreements. In 1899, the social partners of the private sector of the Danish labor market—DA and LO—entered into what today is called the General Agreement, which forms the basis of all collective bargaining agreements in the private sector.

Besides collective rights and obligations, a collective bargaining agreement stipulates provisions on employment terms and conditions, including minimum wage and working hours, which are not otherwise regulated under Danish employment law. Collective bargaining agreements also often contain a provision regarding the agreement’s termination. Generally, a collective bargaining agreement does not lapse even if the period covered by the agreement has expired. A collective bargaining agreement lapses only if it has been replaced by a new agreement or if an industrial action terminating the agreement has been initiated.

According to the Danish Act on Information and Consultation of Employees, employees’ representatives must be informed in a timely manner of issues of importance to the employees and must be consulted on the basis of this information. The act applies to businesses that employ at least 35 employees and is not applicable where the employees have access to the information and consultation by way of collective bargaining agreements.

Works Councils

Most collective agreements contain provisions concerning union representatives and cooperation agreements to establish works councils. The purpose is to provide a forum for formalized discussion of issues of general interest to the employees.

Dispute Resolution

Employers and employees are generally free to agree to submit to private arbitration in the event of a dispute, subject to the requirements of the Danish Arbitration Act, including that the agreement between the parties be clear and unambiguous, that the parties have equal representation on the arbitration tribunal and that the arbitrator be independent. There have been examples in case law where the courts have allowed salaried employees to bring disputes before the ordinary courts about whether the employer could set aside certain parts of the Danish Salaried Employees Act, even though the parties had agreed to submit any disputes to private arbitration.

Successorship Clauses

The Danish Act on Transfers of Undertakings provides certain protections to employees in the event of a transfer of a business or part of a business. The act does not apply to share sales.

Pursuant to the act, all rights and obligations under individual employment agreements and collective bargaining agreements are automatically transferred from the predecessor employer to its successor. The successor is considered to have adopted the predecessor’s collective bargaining agreements unless the successor gives notice to the union within a certain period after the acquisition—normally no later than three weeks after the transfer date—that the successor does not want to adopt the agreement(s) to which the predecessor was a party.

Dismissals of employees due to a transfer of a business or part of a business are not considered justified unless required by financial, organizational or technical considerations. An unjustified dismissal following an acquisition or merger may entitle the employee to damages.

Reference Citations

Right to Organize: Act on Information and Consultation of Employees, European Parliament and Council Directive, 2002/14/EC, §§ 1-2 (Danish); Freedom of Association in the Labor Market, No. 443 of June 13, 1990, § 1 (Danish)

Dispute Resolution: Danish Arbitration Act (2005) §§ 18-22 (Danish)

Successorship Clauses: Danish Act on Transfer of Undertakings, No. 441 of June 7, 2001, §§ 1-9 (Danish)

Safety, Health and Security

In General

The Danish Working Environment Act requires employers to maintain safe and healthy working conditions and to advise employees of any dangers that cannot be completely eliminated.

Workplace Safety and Health

The Danish Working Environment Act requires employers to maintain safe and healthy working conditions and to advise employees of any dangers that cannot be completely eliminated. The law requires employees to report safety hazards to company management.

The Danish Working Environment Authority can execute scheduled and surprise inspections of workplaces to determine their compliance with health and safety regulation. Noncompliant operations can be fined and even shut down until compliance is achieved.

Denmark offers a safety certification program that provides benefits for certified employers in hiring and public relations. To win certification, an employer must undergo an initial audit to demonstrate full compliance with health and safety legislation. Approximately 3,000 companies and public bodies are currently accredited.

Drug and Alcohol Use

Smoking is prohibited in workplaces in Denmark, although companies and employees can agree to establish a dedicated room for smoking.

Reference Citations

Workplace Safety and Health: Working Environment Act, No. 268 of March 18, 2005, §§ 1-6 (Danish)

Drug and Alcohol Use: Act on Smoke-Free Environments, §§ 1-6 (Danish)

Termination

Termination by Employer

The Salaried Employees Act stipulates notice periods based on the individual employee’s seniority. The notice to be provided by the employer varies from one month if the employee is terminated within the first five months of employment up to six months if the terminated employee has at least eight years and seven months of employment.

Required notice under collective bargaining agreements is also typically based on the individual employee’s length of service. According to the Collective Bargaining Agreement for Industry, the notice an employer is required to give varies from no notice within the first six months of employment up to 70 days’ notice after six years of employment. For employees who have reached the age of 50, notice periods are 90 days and 120 days following nine and 12 years of employment, respectively.

Dismissal of an employee with less than a year’s service generally needn’t be for cause unless it would violate the antidiscrimination laws. Collective bargaining agreements may require that dismissals of employees with less than one year’s service (but typically at least nine months’) be for cause.

Generally, termination should be reasonably justified by the conduct of the employee—for example, poor performance or lack of cooperation—or by the circumstances of the company—for example, restructuring or cost cutting.

Termination notice is typically issued during a personal meeting and should be confirmed by a written letter of termination. The termination process is very informal, and there are no statutory disciplinary, grievance or dismissal procedures in connection with termination of a single or a few employees. In connection with collective dismissals, the employer should negotiate with the employees or their representatives, and the Regional Employment Council should also be informed.

A salaried employee may request a written explanation of the reasons for dismissal. In some cases, the employee must receive a written warning before he or she is dismissed—for example, if the employee is late arriving at work or is not performing his or her duties in accordance with the guidelines set by the employer.

Several groups of employees enjoy special protection against dismissal. The protection varies, but normally the employee is entitled to substantial compensation if he or she is unfairly dismissed due to (for example) pregnancy, parental leave or the employee’s status as shop steward or safety representative.

Dismissal of a shop steward must be for compelling reasons, which could include shortage of work, material breach of the employment relationship, illness or breach of duties as a shop steward. A shop steward may only be dismissed as “the last among equals,” meaning that in a group of equally qualified employees, the shop steward should be the last person to be dismissed due to (for example) shortage of work.

Safety stewards, employee representatives on the board of directors and employee representatives under the Danish Act on Information and Consultation of Employees enjoy the same protection against dismissal as shop stewards.

Whistleblowing. Employers with between 50 to 249 workers are required to establish a whistleblower scheme by no later than December 17, 2023. Companies with more than 250 employees must deploy the schemes by December 17, 2021. Under the law (Danish), employees must be able to report theft, fraud, embezzlement, fraud, bribery, violations of the Money Laundering Act, and other criminal offenses without retaliation.

Termination by Employee

Under the Salaried Employees Act, an employee may terminate employment with one month’s notice regardless of seniority. According to the Collective Bargaining Agreement for Industry, the notice to be provided by the employee varies from no notice within the first six months of employment up to 28 days’ notice after nine years of employment.

Plant Closings and Mass Layoffs

Collective dismissals are regulated by the Danish Act on Collective Dismissals, which obligates the employer to inform and negotiate with the employees (or the employees’ representatives) when the number of employees to be dismissed over a period of 30 days is expected to reach the following thresholds:

• at least 10 employees in businesses employing more than 20 and fewer than 100 employees,
• at least 10 percent of the employees in businesses employing at least 100 and fewer than 300 employees or
• at least 30 employees in businesses employing at least 300 employees.

The employer must participate in at least two negotiations with employees to attempt to reduce the number of employees to be dismissed or to alleviate any problems these employees might encounter. Dismissals governed by the Act on Collective Dismissals must be reported to the Regional Employment Council.

Payment on Termination

Salaried employees who have been dismissed are entitled to the following:

• one month’s pay if they have worked for the same employer for at least 12 years and
• three months’ pay if they have worked for the same employer for at least 17 years.

Salaried employees dismissed without cause who have been employed for at least one year also are entitled to compensation. As a general rule, the maximum compensation is an amount equivalent to the salary payable for 50 percent of the statutory notice period. Depending on the employee’s age and seniority, this may be increased up to six months’ salary.

Unemployment Insurance

Unemployment insurance is voluntary in Denmark. Employees must take out an unemployment insurance policy with a private carrier if they wish to be covered.

Reference Citations

Termination by Employer: Salaried Employees Act, No. 542 of June 24, 2005, §§ 2-3 (Danish)

Termination by Employee: Salaried Employees Act, No. 542 of June 24, 2005, § 2 (Danish)

Plant Closings and Mass Layoffs: Act on Collective Dismissals, No. 414 of June 1, 1994, § 1 (Danish)

Payment on Termination: Salaried Employees Act, No. 542 of June 24, 2005, §§ 2(a), 2(b) (Danish); Law Amending the Salaried Employers Act, 2015, § 1 (Danish)

Personal Taxes

Residency Requirements

An individual is regarded as being resident in Denmark for tax purposes if he or she:

• stays in Denmark for more than three consecutive months,
• stays in Denmark for 180 days or more in a 12-month period,
• performs work in Denmark or
• acquires a home in Denmark as a permanent residence.

Taxable Income

Residents of Denmark are subject to income tax on their worldwide income. Nonresidents are subject to income tax only on their Danish source income.

Taxable income includes employment income, fees, business income, pensions and annuities, social security benefits and income from scientific, artistic and literary activities. In addition to wages and salaries, taxable employment income includes bonuses and many benefits, including free housing and company cars.

Gains under an employee stock purchase plan are exempt from income tax up to 10 percent of salary.

Tax Rates

Individuals are subject to a combination of municipal and central government taxes on income. Taxes include national tax, municipal tax, health contributions, labor market contributions, share tax, and an optional church tax.

Denmark’s national tax rates range from zero to 15 percent.

Outstanding tax should be paid by July 1 of the following year (typically around six weeks after the definitive filing date).

Reference Citations

Personal Taxes: Assessment Act, 2016 (Danish)

Web References

In Danish.

Law and Regulation

Act on Collective Dismissals (Danish)

Act on Fixed-Term Employment (Danish)

Act on Sickness Benefits (Danish)

Freedom of Association in the Labor Market (Danish)

Health Information Act (Danish)

Holiday Act (Danish)

Order on Labor Market Supplementary Pension (Danish)

Right to Leave and Daily Allowances for Maternity (Danish)

Salaried Employees Act (Danish)

Workers’ Compensation Act (Danish)

Working Environment Act (Danish)

Government Websites and Publications

In English.

Danish Ministry of Employment