Danish Labor Law aspects you need to be aware of
Danish Labor Law aspects you need to be aware of
With the abolition of Great Prayer Day, salaried employees have received supplements on their pay slips, but the legal interpretation remains unclear. At the same time, requirements for daily working hour registration are introduced, though not for certain self-regulators. The government proposes changes to the Aliens Act, including exceptions to the wage payment requirement and expansion of the job change rule. Get the overview here.
Uncertainties regarding the interpretation of the Great Prayer Day supplement
In connection to the abolition of Great Prayer Day, since January 1st, 2024, employees who are on a fixed salary and who have had their working hours extended have had a Great Prayer Day supplement of 0.45% of their fixed salary calculated on their payslips. The payroll system automatically calculates the supplement according to their own calculation model, so it is not always entered manually by the payroll provider in question. As the interpretation of the law is still unclear, there are differences in how each payroll system calculates the supplement. We therefore expect that in some cases, there may be a minor readjustment in the future when there is future practice that can contribute to how the exact calculation should be made.
Registration of working time is adopted
The Amendment Act to the Working Hours Act will enter into force on 1st of July 2024 and is a consequence of the European Court of Justice's decision of 14th of May 2019 (Deutsche Bank), where it was established that member states are obliged to introduce a requirement to register the daily working hours of each employee.The purpose of the working time registration requirement is to ensure compliance with existing rules on daily and weekly rest periods and maximum weekly working hours.
In accordance with the Act, the employer has freedom of method in relation to how the daily working hours are registered, as long as the time registration is objective, reliable and accessible.
However, the Minister of Employment has confirmed that the obligation to register only concerns the daily working hours, and thus there is no requirement to register the time of day when the work is performed. The Minister of Employment has also stated that it is sufficient to only register deviations from the agreed and/or scheduled working hours.
The registration requirement applies to all employees, unless the individual employee's working hours cannot be measured or determined in advance, and the employee can make independent decisions or has managerial functions. These employees are referred to in the law as self-organizers. It should be noted that the term should be understood in a limited sense, as it deprives employees of some health and safety rights.
Companies should remember that when an employee is considered to be a self-organizer, it must be stated in the employment contract or in an addendum to the employment contract.
Bill on relaxation of rules for foreign labour going out for consultation
At the end of January 2024, the Danish government submitted a legislative proposal to amend the Danish Aliens Act for consultation. The bill contains, among other things, a change to the existing requirement that salary must be paid into a Danish bank account for special business schemes. At the same time, the bill contains an extension of the job change rule. It is expected that the bill will be presented in the spring of 2024 and become effective on 1 July 2024.
Relaxation of the requirement for a Danish bank account
It applies to most business arrangements that the foreign employee must have the salary paid into a Danish bank account. As the rules currently stand, the employee has 90 days to set up a Danish bank account after a valid work and residence permit has been granted. In the bill, it is proposed that this period be increased to 180 days.The bill provides that the foreign employee on the following business schemes will be excluded from the requirement to set up a Danish bank account for payment of the salary.
- Researchers (referring to actual researchers and not high-paid individuals known from the expat tax scheme).
- Pay Limit track on the fast-track scheme.
- Researcher track on the fast-track scheme.
- Education track on the fast-track scheme.
- Short-term track on the fast-track scheme.
As stated above, it is mainly a requirement that the company is certified for the fast-track scheme. Afterwards, it is no longer a requirement for the foreign employee to set up a Danish bank account in connection with employment in Denmark.
Extension of the job change rule
The job change rule allows third-country citizens the opportunity to start a new term of employment before the citizens have obtained a new residence and work permit. Thus, it is possible to start a new term of employment while the application for a new work and residence permit is being processed by the authorities. Currently, this only applies to job changes from one employer to another.If the foreign worker wishes to change the basis of the residence within the same term of employment without changing job or employer, this creates challenges for the worker. Therefore, it is proposed in the bill that the job change rule should be extended, so it also includes situations where a foreign worker wishes to change the basis of residence under the existing term of employment. This will enable foreign workers to continue working in their current employment while the Agency for International Recruitment and Integration (SIRI) processes for the application for a new work and residence permit.
We follow the legislative process and ensure to provide updates when there is news regarding the bill.