Hire in Denmark

Denmark has no specific legislation regulating overtime. Many contracts for salaried employees state the salary includes payment for overtime. This does not apply for hourly paid workers. Most often, the rules governing overtime payment will be stated in the applicable CBA. The most typical model is 50% additional for the first three hours and 100% additional for subsequent hours. This 100% additional is also offered for work performed on Sundays or public holidays.

According to the EU’s Working Time Directive implemented in Denmark by the Working Environment Act, an employee is not allowed to work more than 48 hours per week, on average, during a four months’ reference period.

Termination is permissible on fair grounds. There is no specific legislation regulating disciplinary procedures. However, in most instances, any dismissal due to the employee’s circumstances (performance issues etc.) will be deemed invalid if the employee has not been issued with a prior written warning.

The employer can place the employee on garden leave during a notice period. However, there is no statutory right for the employer to pay in lieu of notice.

Danish legislation regulating employer-employee relationships is typically more liberal than in many other EU countries. It tends to be more favorable towards the employer. However, certain categories of employees enjoy protections against termination. These include; pregnant employees, those on maternity or paternity leave, health and safety representatives and trade union representatives. Other categories may also enjoy protections.

Employees who have been employed for less than 12 months (and are therefore not covered by the Salaried Employees Act) or those who are not covered by a CBA are not automatically protected against unfair dismissal.

In Denmark, post-employment obligation clauses are regulated by the Danish Act on Restrictive Covenants. The Act includes quite rigid and specific requirements in terms of how the post-employment obligation clause must be drafted in order to be enforceable.

The Act recognizes three types of post-employment obligation clauses:

1) a non-competition clause which may remain in force for either six or 12 months post-employment

2) a non-solicitation of customers clause which may remain in force for either six or 12 months post-employment

3) a combined clause which may only remain in force for six months post-employment.

An employee can only be asked to sign a non-competition clause or a combined clause if the employee holds a particularly trusted position or if the employee has made an invention. A non-solicitation clause may only apply to customers with whom the employee has had a “significant” relationship. The employee must be provided with a list of applicable customers upon termination of employment.

The employee is entitled to compensation during the restricted period of a non-competition clause. Depending on the length of the restricted period, whether it is six or 12 months, the compensation must correspond to either 40% or 60% of the employee’s monthly salary.

A non-competition clause becomes unenforceable in the event the termination is initiated by the employer.

Employers must deduct tax and social security contributions from employees’ salary. This is calculated at the rate indicated by the tax authorities on the employees’ tax card.

Salaried employees are entitled to absence during sickness. The Salaried Employees Act and most CBAs provide that employees are generally entitled to at least 90% of full salary during sickness. Generally, for the first 30 days of sickness, the employer is required to provide the employee with this compensation. After that period, the authorities will continue to fund the sickness benefit. In such cases, the employer will most often pay the compensation and then be refunded by the authorities. As a general rule, employees are entitled to sickness benefits for a maximum of 22 weeks in a nine-month period.

As a rule, sickness is deemed a lawful absence. Therefore, it will not be deemed a fair reason for dismissal. There are exceptions though, such as the case of long-term sickness where the employer cannot determine when the employee will be able to resume work and the work tasks cannot be completed by other colleagues.

• Parents are granted paid leave of absence to care for a sick minor child on the first and second day of illness.
• Parents who lose a child under the age of 18 can take bereavement leave with unemployment benefits for 26 weeks. The leave starts the day after the child is lost. The employee has the option of working fully or partially during the leave and can alternate between work and leave during the 26-week period. The employee will receive a daily allowance for the hours they take leave.
• Employees are entitled to absence from work if they experience “compelling family reasons” related to an illness or accident. This includes a death in the family. In the event of such a force majeure situation, the employer may not deny the employee the right to leave. However, the absence is without pay. In practice, most employers will have a policy for paid leave in the event of a close family bereavement.

• Pregnant women are entitled to four weeks of leave prior to delivery. Thereafter, they have a right to 14 weeks of maternity leave.
• Fathers have the right to two weeks of paternity leave, which must be taken within 14 weeks following the birth of the child.
• After the initial 14 weeks of maternity leave, each parent is entitled to a parental leave of up to 32 weeks. Fathers may start their leave within the first 14 weeks after delivery of the child should they choose.
• Each parent is allowed to extend their parental leave by eight weeks. However, working parents may alternatively extend their leave by up to 14 weeks. If the leave is extended, the daily allowance will be decreased during the period of leave because 32 weeks of daily allowances is the maximum sum that may be paid out.
• Either parent is entitled to defer a portion of the 32 weeks parental leave until any point before the child turns nine years old. However, the leave cannot be deferred if the option to extend has already been taken.
• The same rights for biological parents apply to adoptive parents as well.