COUNTRY

Written Agreements

Employers of Danish citizens are obligated to provide a written contract containing all material terms to employees working for at least a month and more than 8 hours per week. If a collective bargaining agreement regulates the general terms of employment, the contract must include a specific reference to the agreement.

Employers have the right to establish restrictive covenants with their employees, offering them options such as a non-competition clause, which prevents employees from competing with their employer, a non-solicitation of customers' clause, which prohibits employees from engaging in business with the employer's customers or associates, or a combination of both clauses. The maximum term of such clauses is 12 months. Such clauses are valid only if the employee has been informed in writing.

Oral Agreements

An employer is required to provide the employee with written information about the essential employment conditions within 1 month of employment if the employee works for at least 8 hours of work per week. If an employer fails to provide the terms of the agreement in writing to the employee, the employer will be liable for damages.

Implied Agreements

In Denmark, there are no specific provisions on implied employment contracts. However, an employer is required to provide the employee with written information about the essential employment conditions within 1 month of employment if the employee works for at least 8 hours of work per week.

In addition, a duty of loyalty is implied in all employment relationships, which requires an employee to refrain from actions that harm the employer or compete with the employer.

Per the labor law of Denmark, an employee's weekly working time must not exceed 48 hours on average over a period of 4 months, including overtime. Periods of annual paid leave and periods of sick leave are not included in or are neutral in relation to the calculation of the average. From July 1, 2024, employers are allowed to enter into individual agreements with certain employees to work more than 48 hours. This applies only to employees who are covered by collective agreement provisions on on-call shifts and who perform critical functions within the areas.

Employers must give a rest period of at least 11 consecutive hours within every period of 24 hours. There must be at least one 24-hour rest period per week. The employer must do their best to ensure that this period falls on a Sunday and that all employees take this rest at the same time.

The regular daily working hours for night workers must not exceed an average of 8 hours over a period of 4 months. Where a night worker is employed for particularly hazardous work or for work that involves a significant physical or mental strain, no more than 8 hours shall be worked in a 24-hour period during which night work is performed.

The official public holidays in Denmark are those recognized by the Church of Denmark. For 2024, these are:

• April 6: Maundy Thursday
• April 7: Good Friday
• 10 April: 2nd Easter Sunday
• May 5: Great day of prayer
• May 18: Ascension Day
• 19 May: Bank closure day
• 29 May: 2nd Pentecost
• 5 June: Bank closure day
• 25 December: Christmas Day
• 26 December: Boxing Day

Under Denmark's Holiday Act, employees are entitled to 5 weeks of paid leave per year. Leave is earned continuously from September 1 to August 31 of the following year (12 months), and 2.08 days of paid leave are earned for each month of employment. For periods of employment of less than 1 month, the holiday is earned in proportion to the length of employment. Employees can earn and take their leave at the same time over a 16-month period.

The right to paid annual leave does not accrue during periods in which the employee participates in a strike or lockout or during paid maternity or sick leave.

Employees who are unable to work due to illness or injury are entitled to sickness benefits under Denmark's Act on Sickness Benefits. Employees qualify for sickness benefits if they have been employed for at least 240 hours in the past 6 months, and for at least 40 hours in at least 5 of these months. The employer pays sickness benefits to employees on sick leave for 30 calendar days from the first day of absence. After the first 30 calendar days of sickness, the municipality will pay the employee sickness benefits.

Salaried employees are entitled to full pay from their employer for the first 30 days of sick leave absence, while most collective agreements provide the same for hourly employees.

Denmark's Maternity Act grants pregnant employees four weeks of maternity leave prior to birth and 14 weeks of maternity leave after delivery. After the first 14 weeks of maternity leave, each parent has the right to parental leave of up to 32 weeks. Additionally, employed parents may extend their leave by up to 14 weeks, although the maternity benefit amount will be decreased. The law also allows parents to resume working and postpone up to 32 weeks of parental leave (it can be used until the child has turned nine years of age). However, parents who extended their leave by an additional 14 weeks cannot postpone it.

In Denmark, after the first 10 weeks of maternity leave, each parent has the right to parental leave of up to 32 weeks. Additionally, employed parents may extend their leave by up to 14 weeks. The law also allows parents to resume working and postpone up to 32 weeks of parental leave and use it until the child has turned 9 years of age. However, parents who extended their leave by an additional 14 weeks cannot postpone it. Both parents are entitled to receive the statutory maternity leave pay throughout the leave period unless stated otherwise in the employment contract.

In case of adoption, both parents can take up to 4 weeks of paid leave before receiving the child, and each parent has the right to parental leave of up to 32 weeks. Additionally, employed parents may extend their leave by up to 14 weeks.

The father retains this entitlement if the child is stillborn or passes away soon after birth. The father or co-mother enters into the mother's right to leave if the mother dies or becomes unable to care for the child due to illness.

Minimum Wage

There is no statutory minimum wage that applies to all employees in Denmark. Minimum wages are regulated by collective agreements at the sectoral level or negotiated individually between employers and employees.

Payroll frequency

The most common payment systems in Denmark are based on monthly wages, day wages, hourly wages, and piecework wages. Hourly, day, and piecework wages are generally paid once or twice a month, and monthly wages are naturally paid out monthly retrospectively.

Overtime, Holiday & Vacation Pay

There are no statutory provisions for overtime pay in Denmark, although collective agreements generally entitle the employee to compensatory time off or a pay supplement for working overtime hours. The law states that employees' working hours cannot exceed 48 hours in a week, including overtime. On Sundays and public holidays, the rate in collective agreements is usually 200% of the hourly wage. Danish employees are also generally entitled to 5 weeks of paid leave annually.

Notice Period

Denmark's labor law stipulates that employers must give notice before terminating a salaried employee. The termination notice period applicable to both the employee and employer is often stated in the collective agreements for hourly employees. For salaried employees, the notice period is dependent on their years of service, ranging from 1 month to 6 months.

If the employment relationship is temporary and does not exceed 1 month, no notice period is required. If the employment is probationary and does not exceed 3 months, the employer must provide at least 14 days' notice, while the employee is not required to give notice.

Severance Benefits

The law in Denmark entitles dismissed salaried employees to severance pay if the employee has been continuously working for the same company for at least 12 years.

Severance benefits are provided as follows:

• Employees are entitled to 1 month’s salary if they have worked for the same employer between 12 and 15 years.
• Employees are entitled to 2 months’ salary if they have worked for the same employer between 15 and 17 years.
• Employees are entitled to 3 months of salary if they have worked for the same company for 17 years or more.

No severance benefits are paid if the employee receives a retirement pension from the employer upon dismissal.

Pension

In Denmark, people are entitled to retirement income through 3 different pension schemes: a public/state pension (statutory pension), a pension created through employment (labor market pensions), and an individual pension.

To receive the full pension amount, a person must have lived in Denmark for at least 40 years. A person who has lived in Denmark for fewer than 40 years between the ages of 15 and retirement age can receive a partial pension.

The state pension consists of a basic pension and a supplemental pension. If a person earns more than a certain income, they can become ineligible to receive part or all of their basic pension and pension supplement.

Dependents/Survivors Benefits

An employer is required to pay benefits to a surviving spouse and children in case of an employee's death:

• 1 month's salary if the employee has worked for 1 year
• 2 months' salary if the employee has worked for 2 years
• 3 months' salary if the employee has worked for more than 3 years

The Labor Market Business Insurance handles workers' compensation claims. There are 3 possible benefits for survivors who lost someone to a workplace accident or occupational disease: a transitional allowance, compensation for surviving spouse, partner, or children, and special compensation for surviving dependents.

In 2024, the compensation rates are:

• Maximum compensation for surviving dependent, spouse: DKK 191,628
• Compensation for surviving dependent, child, 10% maximum: DKK 38,328
• Compensation for surviving dependent, child, 15% maximum: DKK 57,492
• Compensation for surviving dependent, child, 20% maximum: DKK 76,656

Invalidity Benefits

Denmark's Act on Social Services provides disability assistance for people with permanent physical and mental impairments. The Government of Denmark pays entirely for disability pensions without any contributions from the employees or the employers. Municipalities are responsible for supporting individuals, and district councils decide on the type and amount of assistance.

The application for a pension is to be submitted to the municipal council. To be approved for disability, individuals have to show that their ability to work is substantially and permanently reduced to such a degree that work of any kind is impossible. Applicants must go through a rehabilitation program first to see if their ability to work can improve. A disability application will be denied if the ability to work improves with treatment and activity unless the applicant is within 5 years of retirement age. Disability payments are subject to income tests.

Permanent disability pension payments for work-related injuries are up to DKK 306,600 annually as of 2024. Eligible individuals may be subject to different requirements and amounts. Rates are adjusted annually on January 1 to add 2% to the adjustment percentage for the financial year in consideration of taxing, salary adjustments, interest rates, and mortality.

Persons with permanent disabilities also can apply for other assistance, including supplemental income for additional expenses.