Government measures in key jurisdictions 4th edition - Flipbook - Page 40
Denmark
Employment
The Danish government introduced a temporary wage compensation scheme for employees at
risk of being laid-off. The temporary compensation scheme was available to all companies from 9
What financial
March 2020 to 29 August 2020 and has been extended until 31 October 2020 for companies that
support is the government are prohibited from opening.
providing to businesses
The compensation scheme applies to all private Danish companies regardless of size (if the
and to individuals on •
company is prohibited from opening), however, it is a requirement that the company is materially
employment issues?
adversely affected financially by Covid-19 and are facing having to lay-off at least 30 per cent of
its employees or more than 50 employees. If this is the case, the company can apply for state
salary compensation whereby the Danish state will compensate 75 per cent of the salaries of the
employees concerned, but a maximum of DKK 30,000 per employee per month. For hourly wage
earners, the state wage compensation amounts to 90 per cent of the salaries of the employees
concerned, but a maximum of DKK 30,000 per employee per month.
•
•
It is a condition for receiving compensation under this scheme that the employees are sent home
with full salary and that they do not work during the period for which compensation is received.
Furthermore, as a starting point, employees are obliged to take holidays and/or take time off in
lieu of overtime amounting to a total of five days in connection with the compensation period.
•
Companies receiving compensation under this scheme undertake not to lay-off
employees due to financial reasons during the period in which they receive the
compensation. If employees are laid-off during the compensation period, compensation
of wages will cease as per the date of the dismissals.
•
In addition to the compensation scheme, the Danish government has adopted amendments to
the Danish Act on Active Social Policy, the Danish Act on Unemployment Insurance and the
Danish Act on Sickness Benefit due to Covid-19. Pursuant to the amendments, certain periods
are extended for the benefit of the persons covered by the acts, i.e. the period under which the
persons covered by the Danish Act on Sickness Benefit are entitled to sickness benefits.
Furthermore, the Danish government has introduced easier access to unemployment benefits
for self-employed, freelancers or artists, who was previously entitled to compensation under a
compensation scheme (which has now been phased out).
•
In addition, the Danish government has on 20 May 2020 adopted another amendment to the
Danish Act on Sickness Benefit, which entitles employees who themselves are, or who has
relatives that are, significantly at risk of getting infected with COVID-19, to remain home from
work and receive sickness benefit. The Danish government has agreed prolong them
amendment until 31 December 2020. In order to receive sickness benefits, the employee must
fulfil certain criteria in relation to health, and the workplace must be incapable of arranging the
workspace to accommodate the needs of the employee. The employer is from the first day of
the employee’s absence entitled to get a refund of the sickness benefit.
•
Furthermore, the Danish government has introduced a possibility of extending temporary
employment due to Covid-19.
•
On 31 August 2020, the government and the social partners entered into an agreement in
order to help companies and employees in connection with the expiry of the
wage compensation scheme. The agreement introduces initiatives to prevent
redundancies, including division of labour under which the employer can divide the
work between the employees instead of dismissing employees, allowing the employees to
stay partly at home receiving unemployment benefits. At the same time, higher
unemployment benefits are provided.
•
For additional information about the temporary wage compensation scheme, see here.
•
Please note that the period for the application of the temporary wage compensation scheme has
been prolonged after the publication of the newsletter.
Government measures in key jurisdictions
40