Background Checks

Background checks are permissible in Denmark; however, they are subject to the rules contained within the General Data Protection Regulation (GDPR) and the Danish Data Protection Act.

• Specific background checks such as criminal record checks and credit checks are permitted in specific circumstances, subject always to GDPR compliance, and regardless of whether the check is undertaken by the employer or a third party.

Credit checks are only permitted if they are relevant to the employee’s position, and the employee’s consent is always required to carry out a credit check.

Verification and New Hire Reporting

A new hiring report typically includes:

• Personal Information: Name, address, CPR number (Central Person Register number), and contact details
• Job Details: Position, department, start date, and salary
• Verification Results: Summarized findings from background checks, including employment and education verification
• Compliance Confirmation: Ensuring all legal requirements, such as work permits for non-EU/EEA citizens, are met

Submission: Employers may need to submit new hiring reports to relevant authorities, such as tax and social security agencies, to ensure compliance with local regulations

Onboarding Process & Documentation

Collecting Required Documentation

• Employees must provide valid identification, such as a passport or national ID card
• Social security, including the employee’s CPR number (Central Person Register number)
• If the employee is a non-EU/EEA citizen, a valid work permit is required

Providing Employee Rights and Obligations

• Legal requirements for employment contracts
• Collective agreement obligations
• Employee rights (leave, safety, equality)
• GDPR compliance
• Immigration and posting of workers updates

Healthcare

Denmark has a universal healthcare system, ensuring all residents have access to medical services.

• Residents are divided into two health insurance groups, with Group 1 members having a designated GP and Group 2 members having more flexibility in choosing healthcare providers.
• Some employers offer additional health insurance to cover services not included in the universal healthcare system.

Retirement

• Universal Pension: Provides income to individuals over the age of 67, regardless of contributions, if they have lived in Denmark for at least 40 years between ages 15 and 65
• Social Disability Pension: Supports individuals who cannot work due to social or medical reasons

Occupational Pension:

• Covers around 90% of the workforce
• Established through collective bargaining agreements
• Contributions: Employees contribute approximately 9% to 17% of their salary; employers cover the remaining two-thirds

Labor Market Supplementary Pension (ATP):

• Largest supplementary pension scheme in Denmark.
• Mandatory for anyone working more than nine hours a week and aged between 16 and 65.
• Depends on contributions made over the years.

Social Security

Social Security Contributions: Employers must contribute to social security schemes, including ATP (Labor Market Supplementary Pension), maternity fund, industrial injuries insurance, and public social security schemes.

Employment Contract Details

The employment contract must adhere to legal requirements and be presented within a specified period following the acceptance of an offer.

Provide a written employment contract for the new hire within one month of employment start, outlining key terms such as:

• Essential Details: Include employee’s job title, salary, start date, and job responsibilities. Contracts must also note working hours and any probation period.
• Signatures: Both employer and employee need to sign the contract to indicate acceptance and understanding.
• Amendments: Any changes to contract terms must be agreed upon by both parties and documented in writing.

Types of employment contracts:

• Permanent employment contracts: Apply to full-time employees working 37 hours per week with five weeks of annual leave.
• Part-time employment contracts: Employees are offered to work part-time with fewer weekly work hours below 37.
• Temporary employment contracts: You can hire an employee to work for a fixed term, for which you must mention the duration of the work in the agreement.
• Freelancing/consulting: You may hire independent contractors for a particular project or period. However, no statutory obligations exist for hiring independent workers under any contract employment law in Denmark.

Probation Period

The contract may include a probation period of up to three months, during which either party can terminate with shorter notice without reason.

Visas

Types of Visas:

• Schengen Short-Stay Visa (Type C): For stays up to 90 days for business, tourism, or family visits.
• National Long-Stay Visa (Type D): For stays longer than 90 days for work, study, or family reunification.
• Work Permit Requirements
• Eligibility: Valid job offer or intra-company transfer.
• Permit Options: Includes Pay Limit Scheme, Positive List, and EU Blue Card.

Application Process:

• Collect Documentation: Employment offer, proof of qualifications, valid passport, photos, and application fee.
• Submit Application: Online through the Danish Agency for International Recruitment and Integration (SIRI).
• Await Decision: Processing times vary.

Important Considerations:

• Visa Processing Time: Check timelines early.
• Renewal and Extensions: Possible for certain situations.
• Legal Compliance: Adhere to Danish immigration laws and report any significant changes.

Independent Contractors

The following factors would be considered by the courts in determining the nature of the relationship:

• Mutuality of obligation: in an employment relationship the employer is obliged to offer work, and the employee is obliged to undertake work. In an independent contractor relationship, the company will have no obligation to offer work, and the contractor will have discretion to accept or reject work.
• Personal service: this is a feature of an employment relationship, whereas an independent contractor will normally be able to appoint a substitute. An unfettered right of substitution is a compelling indicator of independent contractor status; however, it is not determinative.
• Amount of control: in an employment relationship an employer will determine the way the work should be performed, the hours of work, etc, and managers will actively manage the performance of employees. A contractor will, on the other hand, be free to decide when and how the work will be undertaken.
• Provision of equipment and uniform: in an employment relationship the company will provide all the necessary equipment for the employee to undertake the role. A contractor would be responsible for providing their own equipment.
• Holiday entitlement: employees will accrue and be paid for holidays, whereas independent contractors will not.

Paid Time Off

Employees are entitled to five weeks of paid vacation annually.

• Scheduling: Vacation timing should be mutually agreed upon, with two weeks typically taken consecutively during the main period.

Public Holidays

• New Year’s Day
• Maundy Thursday
• Good Friday
• Easter Sunday
• Easter Monday
• Ascension Day
• Whit Sunday
• Whit Monday
• Christmas Day
• 2nd Day of Christmas

Bereavement

If a child under 18 dies, an employee is entitled to five days’ annual leave.

Maternity Leave

Pregnant women are entitled to four weeks’ pregnancy leave prior to the expected date of birth. However, the mother also has a further entitlement of 24 weeks of maternity leave broken down as follows:

• 2 weeks of parental benefits immediately after childbirth
• 8 weeks of parental benefits before the child reaches 10 weeks of age
• 14 weeks of parental benefits to be used before the child turns one year old (5 weeks of this period can be postponed until the child reaches nine years if specific conditions are met

To qualify for maternity leave or parental leave, employees must work a minimum of 40 hours per month for at least three months.

Female salaried employees are to receive half pay for four weeks before the expected birth date and 14 weeks after the birth. Male employees and employees who are not covered by the Salaried Employees Act, are not legally entitled to any salary from the employer during periods of leave.

Paternity Leave

The father or the co-mother is entitled to two weeks of continuous paternity leave immediately after the birth.

Parental Leave

Parents are eligible for leave, with both individual and shared leave options available for a stipulated period following the birth or adoption of a child.

• The mother and the father then have an additional entitlement to 32 weeks of parental leave each. Parental leave can be extended by 8 or 14 weeks, meaning that 40- or 46-weeks’ parental leave can be taken.

It is mandatory for all companies to pay contributions to a maternity fund.

Sick Leave

Employees (those not covered by a collective agreement or the Salaried Employees Act) may be entitled to sickness benefit paid during the first 30 days of sickness. The employer pays the sickness benefit to the employee and claims reimbursement from the municipality.

Termination Requirements

Regardless of the length of the employment, employees must be given 1 month written notice.

Notice Period

Employers should provide written notice stating the reasons for termination and the notice should be given as follows:

• During the Probation Period = 14 days notice
• 0 – 6 months’ service = 1 month notice
• 6 months – 3 years’ service = 3 months’ notice
• 3 – 6 years’ service = 4 months’ notice
• 6 – 9 years’ service = 5 months’ notice
• 9+ years’ service = 6 months’ notice

Severance Pay

Eligibility and compensation are typically dictated by employment contracts or collective bargaining agreements.

There is no general legislation establishing an employee’s right to severance pay upon termination of employment. Many collective agreements contain severance pay provisions in the event of termination of employment.

Severance payment provisions and salaried employees are entitled to statutory severance payments if they have been continuously employed by the same employer for at least 12 years.

The severance payments are as follows:

• Length of service 12–17 years: two months’ pay
• Length of service 17 years+: three months’ pay

In the case of unjust termination, the courts can award compensation of up to one to six months’ salary (depending on length of service).

Final Payment: Ensure all payments, including outstanding salary and unused leave, are settled promptly after termination.

Unemployment Insurance

• Employees must be a member of an unemployment insurance fund (a-kasse) for at least one year.
• Employees need to have earned a minimum income over the past three years.
  • Worked at least 1,924 hours within the past three years
• Employees must register as unemployed at your local job center from the first day of unemployment.
• Unemployment benefits can be received for up to two years.
• The amount paid depends on employees’ previous income and is capped at a certain level.
• If employee is deemed responsible for their unemployment (e.g., quitting without a valid reason), they may face a three-week quarantine period during which they cannot receive benefits.

Anti-Discrimination Practices

Employers cannot discriminate against employees or applicants directly or indirectly on the grounds of age, disability, race, color, sexual orientation, religious belief, political orientation or national, social or ethnic origin. As of 1 July 2022, it is also prohibited to ask an employee about their age during the recruitment process. Given the general protection against discrimination, there is no legal requirement to take positive action (ie, affirmative action).

• Complaints: Employees can file complaints if they believe their rights to equality or fair treatment have been violated.

Workplace Safety Standards

Safe Environment: Employers must ensure a safe and healthy workplace in accordance with Danish laws and standards.

Reporting Hazards: Employees should report unsafe conditions promptly, facilitating timely remediation.

Workers’ Compensation

See above.

Labor Law Sanctions

Work Permits: Employing a person without a valid work permit can lead to fines and criminal charges.

Holiday Pay: Failure to report and pay holiday pay can result in penalties.

Privacy Violations: Reading private emails or disclosing trade secrets can lead to criminal sanctions.

Anti-Discrimination: Breaching anti-discrimination provisions can result in fines and legal action.

Collective Redundancies: Failure to inform and consult in relation to collective redundancies or business transfers can lead to sanctions.