Employer of Record in Denmark
Skuad's Denmark EOR (Employer of Record) solution helps your business expand into Denmark without the need for an entity setup. Our unified and automated global HR platform enables you to expedite the onboarding of your remote team, manage their payroll, benefits, etc. compliantly. We help you streamline the global expansion process with the able assistance of our international network.
Skuad provides you access to the best of Danish talent at all levels of experience. Through its local network and global infrastructure, Skuad can undertake activities such as hiring, management of contracts and payrolls, onboarding, and employee record management so that you can focus on your organization’s core business activities. Learn more about Skuad’s customized EOR solutions.
Denmark at a Glance
Estimated Population: 58.1 million
Currency: DKK Danish Krone
Languages spoken: Danish, English
GDP: USD 350.1 billion
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Employment in Denmark
What You Must Know Before Employing in Denmark
Employment in Denmark is based on the European concept of flexicurity, meaning flexibility with security. Similar to other European economies, the employment system in Denmark is highly flexible. All members of the working population have access to employment. Denmark’s labor force comprises nearly 50% of the Danish population (a higher percentage than most other countries. Danish employees are free to participate in welfare programs and are given benefits in case of unemployment.
The three main types of employees in Denmark are white-collar employees, blue-collar employees, and managers and self-employed. While some common laws and regulations apply to all three categories, several specific laws exist for each of the categories.
All workers employed in Denmark come under the jurisdiction of Danish employment and labor laws. Rae and labor unions are also active and prominent in Denmark. If you are looking to hire in bulk, you might need to engage with these unions.
The knowledge of labor and employment laws in Denmark can provide companies with a significant edge over the competition and expedite the expansion process. Connect with Skuad to know more.
Some of the provisions of Employment Laws to note before hiring in Denmark are as follows:
Timings, Holidays, And Leave Policies in Denmark
Book a Demo with Skuad experts to know about tailor-made solutions for your business needs.
Contractors vs. Full-time Employees
Every young person in Denmark goes to university as education is free up to graduation for citizens. Therefore, the employee pool in Denmark accounts for a rather substantial percentage of the population.
Remote work was on the rise in Denmark since much before it was introduced or began to get traction in several other parts of the world. Internet and telecommunication connectivity in Denmark covers nearly the entire country, and hence there are seldom any issues in setting up remote work infrastructure. Hence, when a significant proportion of the world started working remotely in 2020, Denmark was able to hit the ground running, thanks to its world-class infrastructure and foresight.
Labor and employment laws in Denmark recognize all kinds of employment. Full-time workers in Denmark who work the required number of hours for at least a month are entitled to a contract that extends benefits and provisions to them under the Danish Salaried Employees Act.
In addition to this, part-time, temporary, and agency workers are also recognized in Denmark. Under Danish law, these workers should be accorded the same benefits and provisions as full-time employees. Danish Law does not make a significant distinction among these different types of employment in this regard.
Scope of Negotiating Terms
Employees hired at any level have the right to negotiate their compensation with their employers. Discussions on the compensation for a role are generally a fixed step of any recruitment process. The last round of this process requires the candidates to express their preferences regarding the compensation and benefits.
It is also essential to note here that the higher the corporate ladder or hierarchy, the greater is the leverage for employees. Like any other employee force, the number of highly skilled workers for top-level employment is less in Denmark. Companies choose to consider what candidates prefer especially when hiring for higher positions. Call Skuad experts to know more about the specifics of employment types in Hong Kong.
Hiring in Denmark
The process of recruitment of new candidates has become almost similar across countries over the past few years. The main reason for this has been the proliferation of access to the Internet and of hiring candidates online. A swarm of job portals on the Internet and social media websites help companies in hiring candidates. In Denmark, too, many websites contain repositories of candidates for HR teams to sieve through and find the best person for the job.
The first step toward hiring a candidate will generally be the development of a job description. As easy as this might seem, the HR team and the team that needs to hire a candidate come together over days to develop that perfect job description for a role. Once the job description is ready, it is posted on the Careers page of the company website and also on job portals and professional websites like LinkedIn.
Next, the HR team will go over the applications it has received, this may be done as applications come, known as rolling review, or once the submission deadline is over. After the initial screening, the shortlisted candidates are invited for further rounds of the hiring process.
If the number of shortlisted candidates is high, companies will generally choose to administer a written test as the first round. The candidates selected after the written test will then move on to interview rounds. These may include technical interviews as well as interviews with HR teams and the senior management. For higher posts, the number of formal interviews will typically be lower.
Finally, the last few candidates are made to go through a background check by the HR team. The candidate will then be hired after a round of negotiations.
There are several advantages to hiring candidates using online portals. The greatest advantage among these is that the HR team does not need to step outside the office to hire candidates. Candidates virtually approach the company themselves instead of the HR team having to scout them. The cost of hiring a candidate thus reduces drastically. However, a major disadvantage of hiring candidates online in Denmark is that due to the sheer number of candidates who are qualified for posts, the HR team can often be completely overwhelmed with applications.
This is why having an EOR partner such as Skuad is essential in Denmark. Skuad doesn’t just help you in hiring candidates, but also in contract development, onboarding, and other activities associated with the hiring process. To know more about the hiring process in Denmark, connect with Skuad experts today!
Probation & Termination
When it comes to probation, there are no specific rules in Denmark regarding what the period of probation must be. However, the probationary period is generally mentioned in the contract that is negotiated between the employer and the employee. It seldom stretches out to more than six months.
Denmark is among the countries where it is rather simple to terminate employees, especially if compared with other countries in the European Union. Unless the employees are covered by a fair dismissal clause in their contract, or by a provision of the Salaried Employees Act, there is no protection from dismissal. Employers also do not have to inform a trade union or employment agency in case they terminate an employee.
Among the reasons that termination is simple in Denmark is also that access to unemployment benefits is easy to get. Certain special protections against termination apply to employees who are on parental leave, belong to certain minority groups and communities, or are elected representatives of a union. Book a demo with Skuad to learn more about probation and termination laws in Denmark.
Setting up your business in Denmark involves several obligations. There are certain laws and regulations that you need to take care of, and even a single foul step can put your whole process back by several weeks. An EOR partner in Denmark can put everything in perspective and ensure the smooth expansion of your business leveraging its strong network of local sources and expertise in the employment and labor regulations of Denmark.
Remember, when you work with an Employer of Record, you are not just streamlining your recruitment and hiring process. You are also saving time, and ensuring that you can focus on more integral aspects of your expansion. Learn more about the benefits of EOR solutions from Skuad experts.
Types of Visas in Denmark
People who do not belong to EU countries, especially the Nordic countries, need to apply for a separate work permit to work in Denmark. This work permit is applied for once you have a job offer in hand. For indefinite employment, the work permit is granted for a maximum of four years and is renewable, while for other types a work permit is granted for three months at a time. To know more about work permits in Denmark and how Skuad can secure them for you, speak to Skuad experts today and kick-start your expansion journey.
Payroll & Taxes in Denmark
Setting up payrolls in Denmark must be done completely under local laws and regulations. This includes incorporating all the payroll benefits and provisions that you are legally bound to provide your employees with.
An associated aspect that you also need to pay attention to is taxation. Taxes can vary wildly from country to country and are among the most stringently implemented regulations worldwide. Taxation is one of the most important factors where an EOR partner can be of great help to you, aiding you in setting up your payroll and contributing your share of taxes. Book a demo with Skuad to get an insight into the payroll and taxation system in Denmark.
Although there is no regulation requiring the payment of a 13th salary in Denmark, performance-based bonuses are becoming more popular.
Incorporation: How to Set Up a Subsidiary in Denmark
Opening a subsidiary in Denmark is surprisingly simple and short if you follow the law. The steps to set up a subsidiary are as follows.
- Choose the type of business that you want to establish, whether it will be a partnership, completely private, or public.
- Choose a unique name for the subsidiary.
- Register the company with the Danish Business Authority. Here, you will receive your CVR number.
- If you are going to sell goods or services above a certain threshold of revenue, you must also register for VAT.
- You can now start hiring employees in Denmark!
For setting up a subsidiary in Denmark and finding a bespoke solution for your expansion, get in touch with Skuad experts.
Professional Employer Organization (PEO)
A PEO is very similar to an EOR partner and provides all but the same services. However, one key difference between an EOR and a PEO is that in the case of PEO employees are on the rolls of your company, and therefore all the HR and employee role-related matters need to be taken care of by you. However, an EOR partner has employees on their payrolls and takes relatively trivial activities and processes off your plate.
You can trust Skuad’s EOR solution to take care of all the compliance and HR-related tasks, from onboarding to termination. Talk to Skuad experts to learn more.
An EOR partner such as Skuad should be integral to your plans if you are looking to work with a trusted partner who can take care of your HR needs. Skuad has deep expertise in the labor and employment laws of Denmark. It will also ensure that your HR practices are compliant with the local legal system and you are never on the wrong side of the law.
Contact Skuad today to give your business expansion plans the much-needed boost!