Part-time pay for corona-hit companies: here’s how Denmark’s new wage scheme works

Employers in Denmark can apply to send staff home for 20-50 percent of their normal working hours, with wages compensated by the government, under a new scheme to help firms affected by the coronavirus crisis.

Part-time pay for corona-hit companies: here’s how Denmark’s new wage scheme works
Photo: Henning Bagger/Ritzau Scanpix

The new scheme replaces a former wage compensation scheme which expired at the end of August.

READ ALSO: New scheme replaces Danish wage compensation for corona-hit firms

The government, unions and employers' representative organisations have reached a tripartite agreement on a new structure designed to enable companies to keep as many employees on their books as possible despite reduced activity.

A new arrangement termed ‘workload sharing’ (arbejdsfordelingsordning in Danish) forms the basis for the agreement.

By ‘workload sharing’, the scheme enables companies to share available work between employees when there is less to do than under normal circumstances.

That allows, say, two employees to be retained even though operations are only at 50 percent of capacity, because both employees can be sent home 50 percent of the time and receive full pay, with the government scheme covering costs.

As such, working hours can be reduced for employees without the employees losing earnings.

Unemployment insurance benefits (called dagpenge in Danish) are paid out to cover the missing hours of work. These are not the same as regular dagpenge – for which an individual must be a member of a provider and applies themselves when out of work.

Under the scheme, employers apply for their staff to be covered by the send-home pay provided by the new agreement.

The aim of the agreement – which actually expands on an existing provision – is to prevent redundancies in the private sector, DR writes.

How much must I work or not work to qualify for coverage?

In order for a company to use the scheme, an employee must be sent home for at least 20 percent of their regular hours. There is also a maximum limit of 50 percent, so the member of staff must still be working at least half of their normal hours.

If those criteria are fulfilled, the company does not have to pay wages for the ‘missing’ hours – but the employee will not be left completely out of pocket.

It will not be completely free for employers to send staff home part-time under the agreement.

Employers will have to pay some of the unemployment benefits on the days you do not work, specifically three full days of unemployment benefits during the period you are not at work.

This rule is the same as in the regular unemployment benefits system (where it is termed g-dage).

Are there limits on payouts?

Yes, although the rules are more forgiving than for regular unemployment insurance. The maximum monthly benefit under the scheme will be 23,000 kroner, significantly higher than the 19,000 kroner limit which applies for eligible unemployed people.

It’s important to note that if you are entitled to ‘regular’ unemployment insurance (through membership of a provider known as an A-kasse), then this is unaffected by the coronavirus-related scheme.

READ ALSO: Explained: Should I sign up with a Danish union and get unemployment insurance?

Normally, unemployment insurance (dagpenge) can be received for a maximum of two years within a three-year period.

But this rule does not apply under the work-sharing scheme: in other words, you will not be at a disadvantage regarding your regular A-kasse coverage if you are sent home under the work-sharing agreement.

Can anyone be covered by the scheme?

Payouts to A-kasse members, known in Danish as dagpenge, are funded in part by the state and in part by membership fees. If you are not a member, you will normally receive the more basic kontanthjælp should you become unemployed.

But the scheme for coronavirus-hit companies covers all employees, so provided you are an employee of an eligible Danish company, you can receive the wage coverage if sent home part-time.

For how long will the arrangement be in effect?

The new scheme will take effect as soon as possible and will apply until December 31st.

For workload-sharing schemes that are already in place at New Year, the granting of an extension of up to four months into 2021 will be possible.

The signatories to the agreement are scheduled to meet again in November to discuss whether an extension to those dates may be needed.

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What are the hardest things about moving to provincial Denmark as a foreigner?

Foreign residents who have moved to lesser-known regions of the country share their experiences of life in provincial Denmark. 

Provincial regions of Denmark want to attract skilled foreign workers, but what are the biggest challenges faced by relocators?
Provincial regions of Denmark want to attract skilled foreign workers, but what are the biggest challenges faced by relocators? Photo: Signe Goldmann/Ritzau Scanpix

Editor’s note: there are of course also many positives about living in provincial Denmark, and people based in those areas were happy to share those too. Read what they said in this article.

When Lea Cesar moved from Slovenia to the town of Ringkøbing in 2011, she didn’t know much about the region of western Jutland. 

“In the beginning, I didn’t like how difficult it was to find a job as a foreigner in a smaller city,” Cesar told The Local. Back then she didn’t speak Danish, and that made it hard to find a job that matched her skills and qualifications. 

“I later took it as a challenge and started my own company,” Cesar said, opening a cafe and bakery called Baking Sins in central Ringkøbing. Once she’d taken things into her own hands, she thrived and came to love her town. 

“I love the small shops with handcrafted products,” she said, drawing a comparison to the big shops and chain stores of larger cities. “The culture here is totally different. Ringkøbing is a smaller town, but feels big enough for me.”

Considering the pros and cons of a life in lesser-known parts of Denmark has never been more relevant, as the Danish government amps up efforts to decentralise Denmark and municipalities look to internationals to balance out declining populations. 

READ ALSO: Is it easier for foreigners to find a job outside Denmark’s major cities?

There may be fewer job opportunities, depending on your industry and Danish language skills

Fewer job opportunities, Cesar said, is one of the primary differences between living in a town like Ringkøbing versus a larger city. 

“There aren’t as many companies here searching for employees that only speak English,” she said. “I think it’s important to speak at least basic Danish; otherwise it would be hard to come here.”

Antoniya Petkov, originally from Bulgaria, faced similar challenges finding work when she moved to Ringkøbing several years ago after her husband accepted a job at a wind energy company in the area. 

“Most of the job opportunities in my field in the area require a high level of Danish language, which I am still working toward,” Petkov told The Local. 

In the meantime, she continues to commute to Aarhus, where she works as a technical recruiter in systematics at a large Danish software firm. “However, there are a lot more opportunities for developers, engineers and people with a technical job profile where Danish isn’t required,” Petkov said.

Even in technical roles, Danish proficiency helps. 

Victor Balaban, originally from Moldova, moved to Vejle while working at Siemens Gamesa. Although he said there are plenty of job opportunities in the region, Balaban said his options would be significantly more limited if he didn’t speak Danish.

Candice Progler-Thomsen, an American living in Lolland, said Danish proficiency is “almost essential” to find a job in the municipality. “There will be greater job opportunities here for individuals who learn Danish,” she told The Local. 

And, because it’s a smaller area with fewer employers, Progler-Thomsen said people may need to be willing to commute or otherwise expand their job search.

READ ALSO: Why (and how) Danish provincial areas want to hire skilled foreign workers

On the other hand, there may also be less competition for jobs in lesser-known parts of Denmark, said Mariola Kajkowska. 

Originally from Poland, Kajkowska moved to Vejle in 2019, where she works as an employee retention consultant. “There are often fewer applicants for each job, which increases your chance to be selected for the position,” she said.

Speaking Danish is important, professionally and socially

When Petkov first moved to Ringkøbing, it was challenging that she didn’t speak Danish. It was hard to do daily tasks, like communicate with workers at her children’s daycare or chat with her neighbours.

“People were distant at first when we bought our house in a typical Danish neighbourhood,” she said. 

It was very different from Aarhus, where they had lived before moving to Ringkøbing. “Aarhus has a huge international community,” she said. “We were always able to find friends and it was easy to get by speaking English.”

Petkov also missed the variety of English events and activities available in Aarhus. “But, we compensate by going to international events in the municipality,” she said.

Balaban, who established baseball clubs in both Herning and Vejle, said being a part of the community and getting involved is integral to building a social network and making friends in Vejle. “You have to be an active part of society,” he said.

Although learning Danish was a challenge, Petkov also saw it as an opportunity. “I’m not sure I would have learned Danish if we were living in Copenhagen or Aarhus,” she said. “You just don’t need it much there.”

Now, she’s learned enough Danish to engage in small talk with her neighbours. “Once people got used to us, we felt very welcome,” Petkov said, “though I don’t think we will ever blend completely.”

Chris Wantia, also a resident of Ringkøbing-Skjern Municipality, has found Danish to be integral to life in rural Denmark. 

He lives in the village of Bork Havn, population 300. “When I walk out of my house, I don’t expect my 65-year-old Danish neighbour to speak to me in English,” Wantia told The Local.

“English may be fine in the big cities, but speaking Danish here is important,” he said, adding that it would have been very challenging to purchase and renovate the two homes he and his wife, Janine, own in the municipality if he didn’t speak Danish. 

A second silver lining Petkov has identified is that living in Ringkøbing has also enabled her family to engage more deeply with Danes and Danish culture, adding that most of her friends are Danish. 

“If you really want to dive into Danish culture, a place like Ringkøbing is amazing,” she said.

There’s less to do, depending on your interests (and you might need to drive)

“You can count on one hand the number of good restaurants within 50 kilometres of Bork Havn,” Wantia told The Local. Although that wasn’t a dealbreaker for him and his wife, Janine, it might be worth some consideration before moving to a village like Bork Havn. 

“If you want many restaurants, parties, or meeting new people all the time, this isn’t the place for you,” he said. “It’s quiet here. Some people might not like that, but it’s perfect for us.”

Vejle, though much larger than Bork Havn with a population of 113,000, also isn’t a very lively city in terms of nightlife, according to Balaban.

“I’d say it’s a mature city,” he said. “It’s a quiet city that attracts a lot of families and people who are more settled down.”

Ultimately, having ‘things to do’ nearby depends on which activities you prefer. 

In Lolland, Progler-Thomsen said it’s “a bit of a sacrifice” to not have easy access to the cultural activities the family had in Copenhagen. 

READ ALSO: Are provincial parts of Denmark a good option for international families?

In exchange, her family has access to activities it enjoys that weren’t available in Copenhagen, including many outdoor activities and sports. “We love the Safari Park that’s only a 7-minute drive from our house,” Progler-Thomsen said. 

That’s something else to consider, though: driving. 

Kajkowska, in Vejle, said driving will play more of a role in one’s life, living in these parts of Denmark. “I was at a party the other night and two cars had driven one and a half hours from Sønderborg to come to the party,” she said.

READ ALSO: What benefits does life in provincial Denmark offer foreign residents?

For the most part, Petkov said she doesn’t feel like she’s missing out by living in Ringkøbing.

She enjoys several favorite cafes in town, an Italian restaurant where they are regulars and enjoy chatting with the owners, exploring the beaches and woods, and escaping to the wellness hotel near their house for mini-breaks. “In the summer, it feels like living at a resort,” Petkov said. 

“Ringkøbing is a great place for our family,” she said. “The benefits outweigh the drawbacks for us.”