Employment Law

Danish Employment Contract

It is not mandatory, but we strongly recommend providing a formal employment contract for all your employees in Denmark. These contracts should be written in Danish, in Danish kroner, and include all relevant details such as maternity leave, holiday allowance, wages/wages, expected working hours, etc.

Many employee rights in Denmark are not centrally delegated but negotiated through a collective bargaining agreement (CBA), so you may need to consult with a trade union or employee representative when writing your employment contract, or adhere to pre-negotiated industry norms.

Working with our Danish PEO, Remoly's team of local experts can provide assistance in drafting strong employment contracts that comply with local regulations.

Regular (up to 24 months)

Indefinite

Danish Working Hours

The standard working week in Denmark is generally limited to 37.5 hours per week, and employees must receive a full 24 hours of rest per week. Overtime pay is stipulated by the CBA, so you must understand your specific situation when recruiting.

The maximum working week, including overtime, is generally 48 hours.

Holiday Policy

Denmark Vacation

Danish employees are entitled to at least 25 days of paid leave per year after one year of employment with their employer. New employees can enjoy 20 days of unpaid leave and can accumulate 2.08 days of paid leave each month. Up to five days of leave may be carried over to the following year.

Danish Sick Leave

Employers in Denmark are required to provide insurance for employees who are absent from work for 14 days due to illness. After 14 days of absence and up to one year, the state will pay a benefit equal to 90% of the normal salary, up to a maximum of more than 3,000 crowns per week.

Parental Leave in Denmark

Danish female employees can enjoy 4 weeks of maternity leave before giving birth and 14 weeks of maternity leave after giving birth, and enjoy 50% of their salary.

Male employees can take two weeks of paternity leave within 14 weeks of the birth of their child, also at 50% of their normal salary.

These payments are made by the national social security system and not by the employer.

After the initial parental leave period, each parent can take up to 32 weeks of leave, and in some cases this can be extended even further.

Danish Taxes

Employees in Denmark must pay a range of taxes and contributions, including social security contributions of 8% of gross income, municipal taxes that vary by location, and a graduated state income tax. These taxes cannot total more than 52.06% (as of 2020), but this does not include several other smaller taxes, such as stock taxes and church taxes.

Health Insurance in Denmark

Healthcare in Denmark is nationalized and of very high standards, so employers are not required to provide private health insurance. However, some people do choose to have it as part of a benefits package.

Dismissal and Redundancy in Denmark

Termination provisions in Denmark may vary depending on individual agreements reached by employees or their representatives. Many people are protected by the Salaried Employees Act, under which:

• Employees up to two years and nine months = three months notice
• Employees up to five years and eight months = four months’ notice
• Employees with a maximum of eight years and seven months = five months notice
• Eight years and seven months or more = six months’ notice

Severance pay is treated similarly, with one month's salary for employees who have been 12 years or older, two months' salary for those who have been 15 years or older, and three months' salary for those who have been 18 years or older.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Horizons’ Danish PEOs can reduce risk for foreign companies and provide guidance during the process.

Salary and Benefits

Danish Compensation Law

There is no national standardized minimum wage in Denmark, but the most common wage across the county is around 110 kroner per hour. This may vary depending on the specific CBA, so it is important to understand the relevant rules that apply to your situation when hiring employees in Denmark.

Benefits Management in Denmark

Many employers in Denmark choose to offer their employees a benefits package, including additional pension contributions, company car allowance, paid time off, holiday bonuses and more. However, setting up a benefits system in Denmark can be difficult if you are not familiar with the country's complex labor laws, language, and administrative regulations.

Remoly can help you simplify this phase of expansion by providing tailor-made Danish PEO and benefits administration outsourcing. Our experts will advise you on the best course of action and take care of the setup and management of your benefits, helping you focus on the important work of your Danish expansion.