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WORKING IN DENMARK

‘One in two’ tax inspections found social dumping at Danish companies

Visits by inspectors uncovered the practice of social dumping at over half of companies checked in Denmark last year, the Ministry of Tax said on Friday.

Published: 17 March 2023 15:52 CET
'One in two' tax inspections found social dumping at Danish companies
Workers protest at a Copenhagen construction site where accusations of social dumping were made in 2019. File photo: Ida Guldbæk Arentsen/Ritzau Scanpix

Inspections in 2022 at workplaces including restaurants, construction sites and agricultural and cleaning businesses turned up a large number of cases of social dumping.

Some 3,343 inspections were conducted during the year, scrutinising working environments and tax payments along with staff work and residence permits, the Danish Tax Agency (Skattestyrelsen) said.

Social dumping is defined by the EU as the practice whereby “workers are given pay and/or working and living conditions which are sub-standard compared to those specified by law or collective agreements in the relevant labour market, or otherwise prevalent there.”

This means that, in cases where the Danish authorities detected social dumping, foreign staff were working under poorer conditions than the law or relevant collective bargaining agreement provides for Danish nationals. This saves employers money because the labour costs them less.

The Tax Agency is responsible for checking Danish tax rules are properly complied with. As such, the checks by the Tax Agency checked tax aspects of potential social dumping breaches, with other authorities responsible for other areas.

The Tax Agency can detect social dumping by, for example, checking the amount of income tax or VAT (moms in Danish) paid at a company.

Companies were asked to regulate their tax payments at more than one in two inspections in 2022, according to the tax ministry.

“The new report from the Tax Agency clearly shows that there is an issue here and that the joint efforts from authorities are paying off,” Tax Minister Jeppe Bruus said in the statement.

Some 1.9 billion kroner has been raised by the state in tax demands made as a result of social dumping inspections since 2015.

Last year’s inspections enabled tax authorities to demand 317 million kroner, the highest figure since structured control of social dumping began in 2012. The prior year, 2021, saw demands for 311 million kroner issued as a result of the inspections.

“It’s crucial for the economy and cohesion in society that there is respect for the playing rules of the Danish labour market,” Bruus said.

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WORKING IN DENMARK

How will Denmark’s new rules on recording working hours affect you?

From July this year, all people working in Denmark will have to document any deviations from their agreed working hours. Here's how it's going to work.

Published: 13 May 2024 13:13 CEST
Updated: 13 May 2024 15:14 CEST
How will Denmark's new rules on recording working hours affect you?

On January 23rd, Denmark’s parliament voted through a law that, among other things, requires all Danish employers to introduce a working hours registration system that makes it possible to measure the daily working hours of each individual employee. 

The requirement, which comes into force on July 1st, implements a 2019 judgement of the EU Court, which stated that all member states needed to bring in laws requiring employers to record how many hours per week each employee is working.

The bill is built on an agreement reached on June 30th last year between the Confederation of Danish Employers, the Danish Trade Union Confederation, and Denmark’s white collar union, the Danish Confederation of Professional Associations. 

Will everyone working in Denmark now need to keep a detailed record of the hours they put in each day? 

No. Workers will only need to register any deviations from the working hours they have already agreed or been scheduled. So long as they stick to their scheduled hours, they never need to open the app, website, or other time registration system their organisation has set up. 

If they have to come in early for an interview, however, or do a bit of preparation for a meeting the next day in the evening, they will be expected to log those extra hours. 

Similarly, if they pop out for a dentist’s appointment, or to get a haircut, those reductions in working hours should all be noted down. 

What do employers need to do? 

All employers need to set up and maintain a detailed record of the actual hours worked by their employees, but the law gives them a lot of flexibility over how to do this, insisting only that the record be “objective, reliable and accessible”. 

They could do it in the old-fashioned way using a shared Excel spreadsheet, or, as most probably will, use an app such as Timetastic from the UK, ConnectTeam from the US, or Denmark’s zTime or Timelog.

To make it easier for their employees, employers can fill their scheduled hours into the time registration system in advance, so that workers only need to make a log of any deviations.  

Under the law, employers are required to keep these records for five years.

Employees empowered to set their own schedule — so called self-organisers — are exempt from the law, but as the law states that such people should be able to reorganise their own working time “in its entirety” and that this power should be enshrined in their contracts, this is only expected to apply to the most senior tier of executives. 

Who will be able to see my working hours? 

Each employee should only have access to their own data, which is covered by the General Data Protection Regulation (GDPR), and should not be able to see a detailed record of hours worked by their colleagues. 

Managers, however, will have access to the working hours records made by their subordinates. 

Will the legislation put limits on how many hours I can work? 

Yes, but in theory those hours already are limited for almost all employees by collective bargaining agreements. 

The new rule is intended to make sure that employees do not work more than 48 hours per week on average over a period of four months, the minimum standard under EU law, known as the 48-hour rule.

People in certain professions can, however, work longer than the 48-hours if they are covered by a so-called “opt-out”. 

Won’t it just be an additional hassle? 

The Danish Business Authority, the government agency which is supposed to support businesses in Denmark, estimates that keeping the time registration system up to date will only take between one to three minutes of employees’ time. 

In addition, it estimates that as much as 80 percent of employees in the country already keep a record of their time. 

Henrik Baagøe Fredelykke, a union official at Lego, said in an article on the website of the HK union, that he believed that the records could serve as an “eye-opener” about unrecorded overtime. 

What was crucial, he said, was that the system was used primarily to ensure that there was no systemic deviation from working hours and not to police employees. 

“It must not be used for monitoring by the management, who can come and say ‘whoa, why didn’t you work 7.4 hours yesterday?’,” Fredelykke said.

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