Employment
Here you can find everything you need to know about employment.
- What is occupational injury insurance?
- What is health insurance?
- What are employee benefits?
- First employee - Important registrations for the employer
- What is an employment contract?
- What is an employee handbook?
- What is a collective agreement?
1. What is occupational injury insurance?
In Denmark, it is mandatory for an employer to take out occupational injury insurance on their employees. As a customer at Azets, you can do this via our company.
An occupational injury insurance ensures that the employee or their survivors receive compensation for accidents or illness caused by work or working conditions. It only covers personal injuries that result in permanent impairment. Both the employer and the public system in Denmark will cover temporary injuries; cf. the rules on sick pay, etc.
Contact us if you want to take out occupational injury insurance.
2. What is health insurance?
Many employers offer their employees’ health insurance. The insurance can be part of the pension scheme or it can be with a third party. The health insurance should provide the employees with emergency assistance in the form of a treatment guarantee for treatment with, for example, physiotherapist, chiropractors or psychologists, as well as access to faster treatment in private hospitals. If the employer pays the entire insurance, the employee is taxed on the value of the agreement.
3. What are employee benefits?
An employee benefit is a benefit that the employer pays or provide for their employee, which the employee can use privately. The value of an employee benefit is equated with salary and must be included in personal income.
The most common employee benefits are; free telephone, computer and internet, health services such as health insurance and treatment, and free car for employees (company car).
Free phone - read more
Tax free car (company car) – read more
4. First employee - Important registrations for the employer
When a company hires its first employee, the company must register as an employer on virk.dk. This is a prerequisite for reporting wage information to SKAT (the Danish tax agency). Within eight days, after the employer has made the first salary payment to the first employee, the company must register as an employer. After that, the employer must register as a user of eIncome in TastSelv Erhverv on skat.dk, in order to report A-tax, and so forth.
On skat.dk, the company registration is updated by adding employees to the company. At the same time, it is indicated that A-tax and AM contributions must be reported. If the employee is 16 years or older and works at least nine hours per week or 39 hours per month, it must also be indicated that ATP (an employee pension plan) should be reported for the employee. You only need to do this, the first time your company registers for employment. The company will receive a new registration certificate from SKAT, once the information has been registered.
Learn more on SKAT (in Danish)
5. What is an employment contract?
An employment contract is a document signed by both the employer and the employee, and it contains the basic terms and conditions of the employment relationship. An employment contract is also known as an employment certificate.
Everyone who works for an employer for more than three hours a week and a reference period of four consecutive weeks, is entitled to an employment contract
If there are changes to the employment, the employee must receive a new employment contract or an addendum to the existing contract, which must also be signed.
If you need help drafting an employment contract, we can assist you with this.
Important. The new Employment Certificate Law comes into force on the 1st of July 2023
The new Employment Certificate Law means that employers must in future provide employees with more information about their terms of employment than before, and it sets a number of minimum requirements for their working conditions. For example, a trial period of more than six months (three months for white-collar employees) may not be agreed. In addition, employees may take parallel employment (side job), as long as this is not incompatible with the existing employment relationship.
The new law comes into force on 1 July 2023, but it does not apply retroactively. This means that employees who are either employed or join before this date do not have to have a new employment certificate or addendum thereto, even if the employment certificate does not fulfill the employer's obligation to provide information based on the rules in the new law.
Employees can, however, request the missing information in the employment certificate, after which you as an employer are obliged to submit it within eight weeks.
Read more about who is covered by the new law and which changes employers must be aware of here.
6. What is an employee handbook?
An employee handbook contains a range of useful information and guidelines, such as rules for handling sickness, procedures for reporting sick leave, guidelines for further education, celebration of milestones, alcohol policy, smoking policy, IT and email policy and travel policy. The employee should be able to find relevant information in the employee handbook, and it should be easy accessible, for example stored digitally on the company’s intranet.
7. What is a collective agreement?
In Denmark, about 75% of all employees are covered by collective agreements, for example, all public employees are covered by a collective agreement. A collective agreement is an agreement based on pay and employment terms that is agreed upon between a union (the employees) and an employer organization. The union represents the employees and negotiates on their behalf. The employer organization negotiates and enters into the agreement on behalf of the companies. Typically, collective agreements are linked to different industries. A company joins a collective agreement by being a member of an employer association. A collective agreement typically runs for 2-4 years before it is applicable for renegotiations.
A collective agreement contains terms that employees must include in their employment. For example, rules on pay, pension, working hours, overtime pay, pay during maternity leave, sickness, further education and termination.
If you, as an employer have joined a collective agreement, you must meet the requirements in the agreement and cannot give your employees worse conditions than those stated in the agreement. However, you are able to give your employees better conditions than the collective agreement states.
An employer can enter into a company collective agreement with a union, join a collective agreement that a union has signed with an employer organization, or join an employer organization that has negotiated an agreement relevant to the company's business area. An employer can also choose not to enter into or join a collective agreement. As a special case, however, an employer must always comply with a collective agreement for apprentices or an employee in, for example, flexible employment, even if the employer has not joined or entered into an agreement.