To succeed in business in Denmark, it is vital for both employers and employees to have a strong understanding of the business culture.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Danish work culture, we want to support your global expansion plans.
Therefore, we will address all aspects of the work culture in Denmark to start your expansion well-informed.
Work Culture in Denmark
Denmark is one of European Union’s strongest economies and most attractive locations for companies launching expansion among the EU’s 27 nations.
Denmark welcomes foreign investment and international companies and is ranked as the 36th strongest economy in the world, based on GDP predicted to exceed 392 billion US dollars in 2021. The World Bank rates Denmark No. 1 out of 190 nations for ease of trading across borders, fourth in the world and the best in Europe for ease of doing business, although only 45th for ease of starting a business.
Industry and the service sector employ the vast majority of Denmark’s workforce, in education, engineering, IT, medicine and healthcare, pharmaceuticals, shipping, iron and steel, renewable energy, electronics, food products, clothing and textiles. Small to medium sized enterprises (SMEs) dominate the market.
Danes have also earned the title of the world’s happiest people, but the laid-back work culture is bound to present new challenges for companies moving into the Danish economy.
We have listed a few tips on taking the right steps and avoiding the pitfalls, to make your orientation into the work culture of Denmark smoother:
- Language: Danes are realistic regarding the small number of Danish speakers globally, around six million. Even so an interpreter is advisable if you are not fluent in Danish and cannot be sure your counterparts are fluent in English.
- Contact: When making an appointment, it is recommended to confirm it in writing – best not just ‘drop in’.
- Business Meetings: Provide an agenda, as Danes will expect to stick to it. Present organized and factual proposals, with facts, figures, and charts. Expect direct questions and be ready to answer them.
- Business Environment: Managers expect staff to show initiative and take responsibility for their role. Danish offices do not generally feature a steep hierarchical structure, rather a gentle incline between staff and managers.
- Negotiations: Humor is a welcome antidote to defusing any stress – even with a touch of irony or sarcasm. Danes are ready to laugh at themselves.
- Punctuality: Be on time for meetings! Danes like to stick to a schedule and are not that laid back. Even if you expect to be only 10 minutes late, call to advise.
- Greetings: Firm, brief handshakes, maintain eye contact. Introductions with title and surname, but first names will quickly follow.
- Business Cards: Expected, with name, title, and full office address.
- Dress Code: Dress smartly, but this is not an overridingly important issue, as modern businesses are embodying more of a “smart casual” dress code, especially amongst younger companies.
- Sealing the Deal: There will a lot of consultation and opinion-sharing after the meeting – do not expect to walk away with a decision.
Denmark Minimum Wage
Denmark does not have a mandatory national minimum wage, with rates negotiated between employer associations, trade unions and CBAs. The monthly average minimum for 2021 was around DKK 40,600 (€5,456, US$6,350).
Probation Periods in Denmark
No legislation covers probationary periods but up to three months is allowed for white-collar workers under the Salaried Employees Act (Funktionærloven). Employers should give 14 days’ notice if employment is terminated during probation although employees need not give notice, unless previously agreed. Hourly-paid (blue collar employees) and CEOs have no maximum trial period unless covered by a collective bargaining agreement.
Working Hours in Denmark
Typically, a working week averages 37 hours over five days, usually covered by collective or contractual agreements and should include a 30-minute rest daily. The EU’s Working Time Directive which is applied in Denmark by the Working Environment Act, decrees that the average working week cannot exceed 48 hours (including overtime) averaged over four weeks.
The Act also stipulates that:
- A minimum 11 hours’ daily rest away from work, with a break for a shift exceeding six hours
- No more than six workdays between two days off
- Night workers must not average more than eight hours each 24-hour period
There are exceptions and some industries may apply different working hours and breaks, for example, agricultural workers and those caring for people, animals, or plants.
Overtime in Denmark
There is no mandatory regulation to pay employees overtime in private businesses and generally employees are expected to work without extra payment unless contractually agreed. Blue collar workers are usually covered by collective agreements for paid overtime or given time off as recompense.
Employers contractually agreeing to overtime generally pay 1.5 times the normal hourly rate for the first three hours, then twice the rate for extra hours or working on weekends or public holidays.
Notice Periods in Denmark
Notice periods apply to both employer and employee as agreed in the employment contract or Collective Bargaining Agreements (CBA). Notice periods are also governed by years of service from one month for the first year, up to six months for over nine years’ service during which they receive their salary.
Individuals not covered by the Salaried Employees Act or a CBA are still entitled to receive a reasonable period of notice and notice pay, depending on type of work and their length of service. Employees who resign must give at least one month’s notice.
Redundancy, Termination / Severance in Denmark
There is no statutory law on severance pay.
Those covered by the Salaried Employees Act (Funktionærloven) who have been in continuous employment for between 12 to 17 years are entitled to a severance payment of between one to three months' salary if dismissed by the employer.
Some Collective Bargaining Agreements (CBAs) provide for improved terms. Redundancy only applies if several employees are affected, and certain conditions apply under the Act of Collective Redundancies.
Pension Plans in Denmark
There are various ways to receive a pension upon retirement in Denmark – Statutory, individual pensions, labor market and occupational pensions. They can be split like so:
- Public Sector or Statutory Pensions: include the state and disability pensions as well as schemes such as ATP Lifelong Pension scheme. A state pension (Folkepension) will depend on a person’s work experience, age, marriage status. To receive a full pension, people must have spent 40 years in Denmark between the age of 15 to retirement age and any less is termed a ‘fractional pension’. ATP Scheme is paid 66% by the employer and 33% by the employee, to which most people contribute by law and is paid at retirement age.
- Labor Market Pensions or ‘Company Pension’: set up alongside employers as part of the employment contract. Not everyone is covered. The scheme can include insurance, savings, or group life insurance and typically the employer pays around two-thirds to the employee’s one-third. Conditions apply and these need to be included in the contract.
- Individual Pensions: privately set up through banks or pension companies.
- Occupational Pension Schemes: set up through the Confederation of Trade Unions or the Confederation of Danish Employers. Employer/employees pay two-thirds/one-third, respectively. Generally, employees pay around 12% of their salary.
Public Holidays in Denmark
- New Year’s Day - January 1
- Palm Sunday - March / April
- Maundy Thursday - March / April
- Good Friday - March / April
- Easter Sunday - March / April
- Easter Monday - March / April
- Prayer Day - April / May
- Constitution Day - June 5 (not official – usually half day off)
- Ascension Day - 40 days after Easter Sunday
- Whit Sunday - 50 days after Easter
- Whit Monday - 51 days after Easter
- Christmas Day - 25 December
- 2nd Day of Christmas - 26 December
Sick Leave in Denmark
The employment contract should detail what entitlement an employee is due when ill. If not, the employers typically pay full salary for 30 days from the first day of illness but require a doctor’s certificate. Subsequently, benefit is paid by the relevant municipality subject to certain restrictions:
- Must have worked minimum 240 hours in previous six months and at least 40 hours per month for five of those months
- Would have qualified for unemployment benefit if not taking sick leave
Benefits are generally restricted to a total of 22 weeks, and are calculated on weekly hours worked and average hourly pay over previous three months. The maximum benefit is DKK 4,460 (€600, US$696) divided by 37 (hours) for a maximum of DKK 120 (€16, US$19) per hour.
Vacations/Holidays in Denmark
Vacation days accrued in the ‘holiday year,’ which runs from September 1 until 31 August, can be taken up to December 31 of the following year. Annual leave is calculated at 2.08 days for every month worked equating to five weeks annual holiday a year, although some employers will increase this by 5 days.
Four weeks can be used in one holiday period of 16 months with the fifth week carried forward to the next holiday period, or the days can be used immediately as per the Holiday Act. Employees are entitled to take 15 days consecutively. Non-qualifying workers receive a holiday allowance of 12.5% of their pay.
There are also 12 public holidays each year plus a half day for Constitution Day.
Maternity/Paternity Leave in Denmark
Parents receive 52 weeks paid leave in total which is made up of maternity and parental leave and benefit. There are four stages of leave and benefit due:
- Four weeks pre-natal are taken by the mother
- 14 weeks post-natal taken by the mother
- Father/co-parent can also take two weeks after the baby is born or during the first 14 weeks post-natal which will be agreed by the employer
- Remaining 32 weeks benefit can be shared by the parents
Note: Each parent is entitled to 32 weeks parental leave (total 64 weeks) however, only 32 weeks are paid.
If the employee is entitled to ‘paid leave’ then maternity and parental benefits are paid by the employer. This can then be reimbursed to the employer when they report the leave. If they take ‘unpaid leave’ then the parents are entitled to apply for benefit.
The employer notifies Udbetaling Danmark (UD) online so maternity / paternity and parental benefits can be applied for, but only if the employee is not receiving a salary.
The maximum benefit paid (2021) is DKK 4,460 (€600, US$696) per week (before tax) which is an hourly rate of approximately DKK 120 (US$19). Benefits depend on the employment contract or collective agreements in force.
Bonuses in Denmark
Bonuses in Denmark can either be written into the employment contract or collective bargaining agreement or can be left to the discretion of the employer and may be linked to productivity.
If there is an agreement on bonuses, section 17a of the Danish Salaried Employees Act guarantees that upon the employee’s resignation they are entitled to a proportional share of the payment they would have received had they continued to work for that employer.
Salaries are paid by calendar month and there is no legal requirement for a ‘13th month salary’ to be offered by employers, though some may do so as an incentive.
Car Allowance in Denmark
The mileage allowance for employees using their own vehicle is DKK 1.90 (€0.26, US$0.31) per kilometer for 25-120km; DKK 0.95 (€0.13, US$0.15) over 120km. Employees living in outlying districts may receive DKK 1.90 for every kilometer regardless of distance driven.
Do Not Suffer Culture Shock, Call Us!
The complexities of Danish tax, payroll and employment laws are part of a business system that poses questions for your international expansion. Bradford Jacobs remove the mysteries of all these issues – freeing your staff to concentrate on growing your business, while our on-call HR advisers help with adjusting to the workplace environment and understanding a new culture.
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