In Denmark, every worker is entitled to 5 weeks of vacation annually under the Danish Holiday Act, with 3 of those weeks designated as the ‘Hovedferien’, or main holiday period. This period typically runs from May 1st to September 30th, with July being the peak vacation month.
As of July 2024, during the holiday season, new amendments to the Aliens Act have been implemented, significantly impacting international workers under the Fast Track Scheme. To gain insight into these changes and better understand the implications of the new regulations, Last Week in Denmark spoke with Rikke Gahrn Wolfsen, Head of Denmark Immigration & Director at EY.
1. Thank you for speaking with the Last Week in Denmark newsletter, Rikke. Can you elaborate on the key changes introduced in the new immigration bill passed by the Danish Parliament in July 2024?
Rikke: One of the most important changes when working with business immigration is the relaxation of the requirements concerning receiving the salary into a Danish bank account when covered by the Fast Track rules.
This requirement has posed a significant challenge for Danish companies and their international assignees who are temporarily working in Denmark. Typically, these assignees remain on the payroll of their home country and continue to incur fixed costs there, such as rent, insurance, and social security. Consequently, it was impractical for them to receive their entire salary in a Danish bank account only to transfer it back to their home account for expenses
With the new rules, assignees working in Denmark for a Fast Track certified company or under the researcher scheme are no longer comprised by these rules. They are allowed to receive their salary outside of Denmark in their home bank account.
What is Fast track?
The Fast-track scheme is designed to expedite and add flexibility to the recruitment process for foreign employees by certified companies in Denmark. It allows these employees to work both in Denmark and abroad. To qualify, the Danish company must be Fast-Track certified by the authorities (SIRI) and the assignee or the employment must align with the criteria of one of the scheme’s five specific tracks: The Pay Limit Track, The Supplementary Pay Limit Track, The Short-term Track, The Researcher Track, and The Educational Track.
Each track offers different pathways and benefits tailored to the nature of the employment.
2. How will abolishing the Danish bank account requirement impact employees under the Fast Track schemes?
Rikke: For permanent hires in Denmark, it will allow them more time to set up a bank account in Denmark and not risk violating the rules. Until they have found a place to live in Denmark, have registered for their CPR no. and opened a bank account, they can now receive their salary outside of Denmark.
For assignees to work in Denmark for a limited amount of time, this means much less hassle to open an account in Denmark (as this serves no purpose) and will also relieve them of the costs for transferring the salary to the home country (considering both currency fluctuations and fees in this respect).
For the Danish company – as well as the employer in the home country – the process under the Fast Track Scheme and the researcher scheme has now become much more streamlined and less of a bureaucratic hassle as they need not arrange for Danish payroll and help assignees set up a Danish bank account when this is not required for an assignment.
3. What benefits do you foresee from extending the deadline for setting up a Danish bank account from 90 to 180 days?
Rikke: Setting up a bank account is by no means rocket science – but it can be a lengthy process depending on the circumstances. We have talked to many people who have been frustrated by the timeframe and the risk of violating the rules if the bank account was not set up in time. Extending the period to 180 days will allow them much more time to get settled and sort out the practicalities, including also setting up a bank account.
I must admit, however, that the better outcome here would have been to remove the bank account requirement entirely as it does not serve any real purpose. I know that politicians will claim that the requirement is in place to prevent illegal work in Denmark – but having worked with immigration for close to 17 years, I have to say that this is not what we see. Removing the requirement altogether would not, I believe, result in an increased misuse of the rules – we have, at least, seen no evidence to support this. It is, however, undoubtedly an improvement that the deadline has been extended to 180 days, it is by no means the optimal solution.
International workers in Denmark are setting new records
A new analysis (in Danish) from Dansk Erhverv – Danish Chamber of Commerce, shows that foreign labour contributed DKK 76 billion to GDP in the first three months of 2024, which corresponds to 12 per cent. of Denmark’s total GDP.
“Many foreigners who work in Denmark make a gigantic difference to the Danish economy and to Denmark’s overall prosperity. We are therefore talking about a contribution of a whopping DKK 76 billion to Denmark’s GDP in just three months. These are wild numbers”, says the CEO of Dansk Erhverv, Brian Mikkelsen.
4. Can you explain how the expanded job change rule will affect employees who wish to change work permit types?
Rikke: This is a formalization of the rules used in practice for years – it will not as such change anything. It simply means that even if you will not shift to a new job/role but merely to a new scheme (e.g. from the ordinary pay limit scheme to the fast track pay limit scheme), you are still encompassed by the job change rules and can continue working while the application is being processed.
5. How does the new provision for extending a stay under the Fast-track scheme’s short-term track work?
Rikke: Before the 1st of July, a new first-time application needed to be filed for each new stay under the scheme and biometric features needed to be recorded for each application filed. This meant that biometric features were often registered 10 times or more over a year for a given user of the scheme – a time-consuming and burdensome process for the applicant. After the rule change, an extension can instead be filed – and biometric features need no longer be recorded in this respect.
6. What implications do these changes have for global companies operating in Denmark?
Rikke: The intention is to make the process of hiring non-EU nationals into Denmark more smooth and less hassle-free for companies – and this is an important step in the right direction.
7. How has EY been involved in advocating for these changes?
Rikke: EY has been actively involved in attempting to change the rules since the bank account requirement was established back in 2017. We have worked closely with among others the Confederation of Danish Industry and have also engaged with some of our biggest clients – who are among the biggest and most successful companies in Denmark – to connect directly with the political parties in Denmark, including the current government, to ensure that the politicians understood the need for a change in rules and how this would ultimately benefit Danish economy in the long run.
8. Are there any potential challenges or areas of concern that companies should be aware of with these new regulations?
Rikke: Not as such, no – but I do recommend that companies ensure that they become fast-track certified (if, of course, they meet the requirements to do so) so that they are well prepared to hire non-EU nationals in Denmark in the best possible way and should they need guidance on the rules or regulations, I am always available for a chat.
“It’s a gloomy scenario”
Finans reported that according to a recent forecast from the Danish Chamber of Commerce, 78 of Denmark’s municipalities are expected to experience a decrease in their workforce by 2050. The situation is particularly severe in several municipalities, where the workforce is projected to shrink by over 20 per cent.
Redefining the Family Reunification Law
As of 1st of July 2024, the new changes implemented also redefine the family reunification pathway. Two significant changes affect the Family Reunification process:
- The security deposit required for couples is reduced by half, from the current 114,000 DKK to 57,000 DKK.
- To meet the integration requirements, instead of passing the Danish Test Level 3 (Prøve i Dansk 3), spouses can demonstrate five years of full-time employment involving substantial communication in Danish.
In light of these changes, Maria Clara Medeiros from Last Week in Denmark’s LinkedIn team contacted Liliana N Andersen, a PhD candidate at the Syddansk Universitet – University of Southern Denmark, who has researched the market integration of Latin American women coming to Denmark under the family reunification process. Click hereto read the full article.
