Hiring Talent And Managing Payroll In Denmark

Agreements

• An employer is mandated to provide a written contract within a month of hiring a candidate. A verbal contract is considered to be equally binding.
• The language of the contract is not bound to be in any definite language. Translation of the contract is provided if asked by an employee.
• The agreement is legally binding. It must contain all details of both the employer and the employee.
• The agreement must be clear about the type of job, requirements of the job, and type of the contract. Benefits, termination, notice, or any collaboration with a trade union should be mentioned.
• Before entering a contract, a company must get a Central Business Registration (CBR) number from the Danish Business Authority (DBA).
• Employers need to register with the Danish Customs and Tax Administration (SKAT). This is a necessary step before cutting taxes on the employees' salaries.
• All employers in Denmark must have industrial insurance.
• Every employer must contribute to the Danish Labor Market Supplementary Fund (ATP).
• Any contract comes under the Danish Employment Contract Act.

Onboarding Process

• The first step of the hiring process is preparing the description of the job. This is done together by the HR team.
• The description is uploaded on the company's site or hiring portals like LinkedIn.
• People seeking a job start to fill out the application form. Applications are reviewed by the HR team.
• Candidates are shortlisted by the HR team. They are further assessed in other rounds after initial shortlisting.
• The background of the final few candidates is checked.
• The last step includes the negotiation of the working norms.

Minimum Wage

Payroll Cycle

Annual Bonus

Health Benefits

• Health benefits in Denmark are determined by joint bodies of employers or employees.
• The structure of health benefits is usually decided by the size of the company. Larger companies provide two tiers of health benefits. Smaller companies provide one-tier.
• Employees get dental, health, and vision insurance. Mental health support is also provided to employees.

Working Hours and Overtime

• Work hours:An employee needs to work a fixed 37.5 hours per week and 7.5 hours per day. People generally work from Monday to Friday.
• Break: An unpaid break is granted for working longer than 6 hours a day. It may be around 30 mins or so. At least 11 hours of the rest period is provided daily.
• Overtime: Denmark does not have any specific law for overtime pay. If there is any, then the employer mentions the same in the agreement.

Social Security

Taxes for Employees

Termination

• If an employee opts for voluntary termination
• Termination by mutual agreement
• By employer unilaterally based on objective grounds, unsuitability for the job probation period, etc.
• If the contract gets expired.

Severance Pay

Employees or Contractors

• A person who works for a company and gets paid is called an employee.
• An organization or company that hires employees is the employer.
• An employer may have to pay DKK 10,000 or above for the misclassification of an employee as a contractor.
• An employer may have to pay 20 weeks of salary as a penalty if found guilty of grave misclassification.
• Compensation for a non-complete agreement is also paid to the employee.
• The misclassified employee will get a notice period under the Danish Salaried Employees Act.
• The employer may have to pay all legal benefits retrospectively to such a misclassified employee.
• The employer may have to pay all taxes and other contributions on behalf of the employee.

Final Words