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The prospect of hiring in Denmark can be incredibly exciting and daunting for those new to the labour market. Before starting the hiring process, it’s essential to gain a deep understanding of the country’s employment contracts, taxes, work permit system, and labour regulations.
Employers must comply with anti-discrimination legislation and offer attractive salaries and advancement opportunities to discover and retain top talent. To facilitate strong bonds and loyalty among Danish employees, it’s also crucial to adhere to cultural norms and local business practices.
Denmark is an attractive choice for businesses to tap into the talented remote workforce for several reasons. Firstly, the country produces a steady stream of qualified professionals in many fields, including IT, design, engineering, and more.
In addition, Danish people have a high level of English proficiency. This significantly eases communication and collaboration with foreign clients and team members.
The nation’s work culture values work-life balance and flexible work arrangements, which boost employees’ productivity levels and satisfaction. Finally, Denmark’s high environmental standards, excellent healthcare system, and strong social support make the country a desirable location for remote workers.
Native Teams’ Employer of Record services help you hire and pay your team through an owned infrastructure in Denmark. We handle everything from legal employment to ensuring your team is paid and managed compliantly and with care, without any third parties involved.
Hire your first Danish employee with Native Teams.
To hire employees from Denmark, employers must follow a few essential laws and regulations to ensure a fully compliant employment process.
Employment law covers various aspects of the employment relationship, including working hours, holiday entitlements, and parental leave rights. However, these statutory provisions generally apply to employees who are not covered by a collective agreement.
Collective agreements may provide rights and protections that are equivalent to or more favourable than those established by statutory regulations. For employees covered by a collective agreement, their rights and benefits may therefore be governed primarily by the terms negotiated between the employer and the relevant trade union. These agreements can provide employees with protections and entitlements that meet or exceed statutory requirements.
For employees who are not covered by a collective agreement, the individual employment agreement serves as the primary legal framework governing the employment relationship. However, the terms of an individual employment agreement must comply with applicable statutory provisions.
An indefinite-term employment contract is the standard form of employment and provides for ongoing employment without a predetermined end date.
A fixed-term employment contract is concluded for a specific period and automatically expires when that period ends, unless the contract is renewed or converted into an indefinite-term contract. Fixed-term contracts are commonly used for temporary projects or seasonal work.
Employers must provide employees with clear and comprehensive information about their employment terms where their scheduled or actual working hours amount to at least three hours per week, calculated on average over a four-week period.
This requirement also applies to employees working under zero-hours contracts, where the amount of work is not guaranteed in advance before the employment relationship begins.
The statutory requirement ensures that employees receive clear information about the terms governing their employment, promoting transparency and fairness in the workplace.
Download a free employment contract for Denmark through Native Teams.
Within seven days of the start of employment, employers must provide employees with key information about their employment relationship, including:
Within one month of employment commencing, employers must provide additional information, including the expected duration of employment, where applicable, leave entitlements, notice periods, and any training provisions.
The Act on Implementation of Parts of the Working Time Directive establishes an average working time limit of 48 hours per week, including overtime, calculated over a four-month reference period.
An employee is classified as a night worker if they work at least 300 hours during the night-time period over a 12-month period. The night-time period must cover at least seven hours and must include the period between midnight and 5 am. Unless otherwise provided, the night-time period is generally defined as 10 pm to 5 am.
Employees who work more than six hours per day are entitled to a rest break. The legislation does not specify a fixed duration for the break; instead, its length may vary depending on the purpose of the break.
Employees are entitled to a minimum daily rest period of 11 consecutive hours within each 24-hour period. For shift workers, where changes between shifts make it impossible to maintain an 11-hour rest period, the minimum daily rest may be reduced to eight hours.
Employees must receive a minimum uninterrupted weekly rest period of 24 hours, in addition to their daily rest period. This results in a total minimum weekly rest period of 35 hours.
Ideally, the 24-hour weekly rest period should fall on a Sunday and should be scheduled at the same time for all employees within the enterprise.
Employees accrue paid annual leave at a rate of 2.08 days for each month of employment during the leave year, which runs from 1 September to 31 August. Annual leave is generally intended to be taken during the holiday period, which consists of the leave year and the following four months.
Employees have a fundamental right to receive their agreed salary. Salaries are generally paid monthly, with employers required to make payments on the same day each month and ensure that employees receive their wages before the end of the month.
Employers must ensure equal pay for women and men performing equal work or work of equal value. This requirement applies to all elements and conditions of remuneration.
For these purposes, remuneration includes the employee’s standard basic or minimum pay, as well as any additional benefits received as a result of the employment relationship, whether provided in cash or in kind, and directly or indirectly.
To calculate the salary and taxes in Denmark, click here.
Employees who are unable to work due to illness or injury may be entitled to sickness benefits under the Sickness Benefits Act.
To qualify, employees must have:
Employees are not required to provide a medical certificate to their employer unless the employer specifically requests one. If the employer requests medical documentation, the employee must provide it. The employer is responsible for covering the costs associated with obtaining the medical certificate.
Under the Act on Entitlement to Leave and Benefits in the Event of Childbirth, biological and adoptive parents are entitled to 32 weeks of parental leave for each child. Each parent may take parental leave individually.
Parental leave generally begins 10 weeks after the child’s birth or adoption. However, biological fathers, co-mothers, and mothers who have transferred part of their non-compulsory maternity leave to the father or co-mother may begin parental leave earlier.
Maternity leave is divided into two distinct periods: pregnancy leave and maternity leave. Pregnancy leave is the period taken before childbirth and typically begins four weeks before the expected due date. Maternity leave begins immediately after childbirth and covers the period of recovery and care for the newborn.
Following childbirth, the mother is required to take two weeks of maternity leave. After this mandatory period, she retains the right to an additional eight weeks of maternity leave.
Fathers and co-mothers of newborns are entitled to specific paternity leave rights. Co-motherhood applies where two women have a child through assisted reproduction. In such cases, the woman who is not the child’s biological mother is recognised as the co-mother.
If the mother is unable to care for the child due to illness or death, the child’s father or co-mother is entitled to take all or part of the maternity leave.
Employment can be terminated through unilateral termination or a mutual termination agreement.
An employee may unilaterally terminate their employment by resigning, subject to the applicable advance notice requirements. An employer may unilaterally terminate an employment contract through dismissal. The employer must provide the employee with written notice of the termination.
The employer and employee may also agree to end the employment relationship through a mutual termination agreement, under which both parties consent to the termination.
The Salaried Employees Act, supplemented by collective agreements, governs dismissal procedures for white-collar workers. On the other hand, blue-collar or hourly-paid employees typically adhere to rules outlined in collective agreements, such as the DA-LO main agreement, which serves as a guiding framework in many private sector industries.
For groups like senior managers, not subject to the Salaried Employees Act or collective agreements, termination provisions are usually outlined solely within the employment contract.
During the probationary period, an employer must provide 14 days’ notice if they decide to terminate the employment contract. Employees are not required to provide notice if they choose to terminate their employment during the probationary period.
After the probationary period, termination of an employment contract for white-collar or salaried employees generally requires notice from both the employer and the employee. An exception applies where the work is temporary, and the employment relationship lasts for less than one month.
The minimum notice periods for termination by the employer are:
In cases of alleged unfair dismissal, where an employee demonstrates circumstances indicating that they were dismissed for exercising their rights under the Act or for making a complaint against the employer concerning those rights, the burden of proof shifts to the employer. The employer must then demonstrate that the dismissal was not based on those grounds.
To get coverage for unemployment, employees have to sign up for a Danish unemployment insurance fund, which is a private organisation. Once an employee is a member, they will have to make regular contributions to the fund to stay covered and protected against unemployment while working in Denmark.
Employees who have worked continuously for the same company for 12 to 17 years are entitled to severance pay equivalent to one month’s salary. Employees with more than 17 years of continuous service are entitled to severance pay equivalent to three months’ salary.
The maximum duration of a probationary period varies depending on the employee’s category and the terms of the employment contract. For white-collar or salaried employees, the statutory maximum probationary period is three months. For other employees, the maximum probationary period is generally six months.
Employers can have a specific right to an employee invention, which remains consistent regardless of whether the invention falls under mission inventions, employment-dependent inventions, or employment-related inventions.
For an employer to claim ownership of an employee invention, three conditions must be met:
EU General Data Protection Regulation (GDPR) for employers revolves around ensuring the lawful, fair, and transparent processing of personal data pertaining to employees and job applicants.
The Data Protection Agency plays a key role in enforcing the regulation and addressing any grievances. It is primarily responsible for overseeing compliance and handling complaints related to the EU General Data Protection Regulation.
The Agency provides guidance on various aspects of the regulation as it pertains to employment practices, covering areas such as recruitment processes, the publication of employee information on company websites, monitoring of email and internet usage by employees, CCTV and GPS surveillance, and the retention of records belonging to former employees.
A non-competition clause is an agreement between an employer and employee under which the employee agrees not to engage in competing business activities or accept employment with a competitor for a specified period after leaving the company.
A non-competition clause is only permitted where the employee:
In addition, the employee must have been employed for a minimum of six months.
The clause may remain in effect for a maximum of 12 months after the employee’s resignation. During this period, the employer must provide the employee with appropriate compensation.
The terms of the non-competition clause must be formally documented, including the reason for the restriction, its duration, and the compensation provided.
Cross-border telework refers to a situation where an employee works in one or more EU Member States other than the country where the employer is based, using information technology connected to the employer’s working environment.
The key characteristic of telework is that the employee performs tasks assigned by the employer. Teleworking should also take place under a formal agreement between the employee and employer.
Under the guidelines issued by the Danish Working Environment Authority, specific requirements apply to screen-based work where an employee regularly performs such work at a workstation for more than two days per week, calculated as an average over a month.
In these circumstances, employers must meet specific requirements relating to:
The principle of employee health, safety and well-being requires employers to provide clear work instructions and ensure that employees participate in applicable safety procedures. Employees are also required to use the protective equipment provided by their employer.
Employers are encouraged to inspect employees’ home offices to ensure that they comply with applicable workplace safety requirements.
Hiring employees from Denmark offers several advantages over hiring employees from other countries.
Thanks to the country’s strong emphasis on education, Danish employees are often highly educated and fluent in English. The country also has a reputation for a strong work ethic and a culture of innovation and creativity, which contribute to a forward-thinking mindset and productivity.
The Danish labour market is also very flexible, making it easier to adjust the workforce in the country to your business model and unique business needs. In addition, Denmark promotes a healthy work-life balance, which contributes to higher job satisfaction and employee retention and makes the country a very attractive place for remote workers and digital nomads.
Native Teams helps you employ and pay your team in Denmark directly through owned entities and infrastructure.
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