Hire in Denmark

EOR in Denmark

If a lack of speed or local expertise are among your top concerns when expanding to or employing workers in Denmark, an employer of record may be the best option for achieving your global growth objectives.

An employer of record, sometimes known as an international PEO, enables you to quickly hire and onboard workers in Denmark―often in as little as two weeks―without having to take on the cost and risk of establishing a local entity.

Learn about the hiring, employment, payroll and benefits requirements for workers in Denmark and how our employer of record service, EOR, and local HR experts can help you manage your international employment needs.

Hiring in Denmark

Despite the lack of a minimum wage, Danish employees enjoy some of the highest pay in the world, as well as a very high level of salary equity. Danes prefer letting the market economy reign versus implementing a lot of government protections. As a result, there are fewer protections for workers than in other EU member countries.

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.

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

Employment contracts in Denmark

As you look to hire employees in Denmark, here are some standard regulations you’ll need to know to create a compliant contract, as well as how an employer of record and PEO can provide support for your unique HR needs.

Working hours

The Danish Act on Working Hours states that the average working hours over seven days, when calculated over four months, cannot exceed 48 hours per week, including overtime.

Employees are entitled to one day off per week, which should be Sunday if possible.

Additionally, 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.

Compensation

As you consider the appropriate salary to offer new employees, keep in mind:

• The Danish law does not contain a minimum wage, but most collective bargaining agreements do. It can take the form of a minimum wage (typically used in industry), which sets an absolute minimum for compensation, or it can be a standard wage (typically used in the public sector) that is based on differences in salary steps and job functions.
• Danish law does not contain provisions on overtime pay, which is generally governed by collective agreement.
• Salaried employees receive full pay for working on public holidays. Whether other employees are compensated for holidays depends on the terms of individual or collective employment contracts.

As your employer of record in Denmark, we can provide you with resources and insights about employee compensation, so you are better equipped to make a competitive employment offer.

Bonuses

Danish law does not require employers to pay employees bonuses.

Probationary period

A probationary period usually cannot exceed six months.

Termination and severance

An employer must give notice for termination ranging from one to six months depending on the employment length. Collective bargaining agreements may require as little as no notice at all or as many as 70 days. Employees over the age of 50 are entitled to 90 days’ notice after nine years of employment, and 120 days’ notice after 12 years.

An employee must give one month’s notice unless dictated by a collective agreement, which may require anywhere from no notice up to 28 days.

A salaried employee may request a written explanation of the reasons for termination. In some cases, the employee is entitled to a written warning before they are dismissed.

Salaried employees who have been terminated for cause are entitled to the following:

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

Salaried employees terminated without cause who have been employed for at least one year are also entitled to compensation. Generally, the maximum payout is equivalent to the salary of half of the notice period. Depending on the employee’s age and seniority, this may be increased to as much as six months’ salary.

Employees who are pregnant, on parental leave, or acting as a shop steward or safety representative are typically entitled to substantial compensation if terminated.

As your employer of record in Denmark, we can work with you to quickly handle the unforeseen event of an employee termination, providing legal guidance and a personalized process that ensures you stay out of labor court.

Employee benefits and paid leave in Denmark

When negotiating terms of an employment contract with a candidate in Denmark, here are some of the statutory benefits and paid leave requirements to keep in mind, as well as how an employer of record can support your company’s benefits strategy.

Maternity leave

Under the Maternity Act, Consolidated Act No. 1070 of Nov. 14, 2012 (Danish) a woman is entitled to 18 weeks of maternity leave, with four weeks before the due date and 14 weeks after the birth. Two weeks of leave after 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.

Female salaried employees are entitled to 50% of their salary during maternity leave from four weeks before expected childbirth until 14 weeks after childbirth. Individual contracts or collective bargaining agreements may extend that to full pay for part of maternity leave.

Employees must have been employed for at least 13 weeks and 120 hours to be eligible for maternity benefits.

Multiple kinds of leave apply during and after pregnancy:

• Pregnancy and childbirth leave begin four weeks before the due date
• Maternity leave lasting until 14 weeks after childbirth
• Parental leave of 32 weeks following the 14th week after childbirth

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

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 which runs from September 1 to August 31. Vacation can be taken as it is accrued and for four months after, e.g., between September 1 and December 31 of the following year. Up to one week of vacation may be carried over to the following year.

Employees are entitled to 25 days of vacation a year, either paid (if eligible) or unpaid. Employees who are eligible for paid vacation are those who are also entitled to one month’s notice or more upon termination as well as paid sick leave and paid holidays. These employees are also entitled to an annual vacation bonus equal to 1% of their salary.

Employees paid on an hourly basis are entitled to a vacation allowance equal to 12.5% of their salary. Employers must pay the vacation allowance to the Danish Vacation Pay Fund every quarter, and employees receive their allowance when they take their vacation.

Employees are entitled to three consecutive weeks of vacation during the holiday year. Employers generally must accommodate an employee’s wish to take the bulk of vacation during their child’s school vacation.

Some employment agreements and most collective bargaining agreements provide for an additional five days off.

Holidays

These are the following public holidays in Denmark:

• New Year’s Day
• Maundy Thursday
• Good Friday
• Easter Sunday
• Easter Monday
• Great Prayer Day
• Ascension
• Whitsun
• Whit Monday/Pentecost
• Christmas Day
• Boxing Day

Employees generally do not work on public holidays. A public holiday that falls on a weekend is not moved to another date.

Sick leave

According 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. Generally, 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 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 a sick leave under the relevant collective bargaining agreement or 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.

Health coverage

Danish citizens with permanent residence in Denmark are entitled to old age pensions payable by the state under the provisions of the Danish Act on Social Pensions. The old-age pension is currently payable from 65 years for people born before January 1, 1954; 65 and one-half for people born from January 1, 1954, to June 30, 1954; 66 for people born from July 1, 1954, to December 31, 1954; 66 and one-half for people born from January 1, 1955, to June 30, 1955; and 67 for people born after June 30, 1955.une 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 most 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 hourly, weekly or monthly.

Additional benefits

In addition to healthcare benefits, employees in Denmark are entitled to pension, which is funded by government tax revenues, as well as workers compensation, which is covered through mandated employer insurance.

Employer social costs will cover a large portion of employee benefits in Denmark, but we can consult with you about supplemental coverage options, such as additional pension contributions or life insurance if needed.

Updated: February 09, 2024

Employee onboarding with an employer of record in Denmark

We write and validate all local employment contracts, streamlining the onboarding process for you and your Danish employees—all you have to do is provide relevant information and review and approve the employment agreement. As your employer of record in Denmark, we will:

• Schedule a welcome call to discuss HR and employment information for Denmark, as well as answer any questions
• Prepare a customized employment contract in English and Danish (or other local language)
• Share the employment contract and benefits information with the new employee for signature and review
• Gather tax and banking information from the employee to set up payroll
• Provide a local point of contact to the employee to answer any questions regarding their employment, local HR or payroll

The entire onboarding process for the employee is often completed in as little as two weeks.

Partner with Safeguard Global as your employer of record and PEO in Denmark

With over a decade of service, we are the longest-serving employer of record and PEO provider in the international market. Organizations around the world rely on EOR, our employer of record solution to expand and hire in over 170+ countries around the world, quickly and compliantly.

We’ve seen just about every global employment circumstance imaginable—and with our extensive knowledge of local law and culture, we know what it takes to get employment right in Denmark. We provide written contracts in the local language, salaries in the local currency and HR support in your employees’ time zone.

Additionally, as a global payroll provider, we support payroll administration—including payments, filings and other calculations— all around the world and can accommodate the payroll outsourcing needs of any size organization.

Whether you’re looking to hire as part of a strategic expansion or to meet specific talent needs, our global solutions advisors can walk you through your international hiring options so you can make the right choice for your organization. Contact us today.

Disclaimer

The information provided on or through this website is for informational purposes only and does not constitute legal advice. Safeguard Global expressly disclaims any liability with respect to warranty or representation concerning the information contained herein, including the lost essence, interpretation, accuracy and/or completeness of the information in transit and language translation.