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EXPLAINED: Why Danish businesses want to scrap bank account work permit rule

The Confederation of Danish Employers is pushing for an end to a rule that means the salaries of foreign employees must be paid into a Danish bank account.

EXPLAINED: Why Danish businesses want to scrap bank account work permit rule
File photo of a branch of Danish bank Sydbank. Business organisations have called for changes to a rule requiring the salaries of foreign employees to be paid into a Danish bank account. Photo: Henning Bagger/Ritzau Scanpix

What is the background to the banking rule? 

The rule was first introduced in 2017 by the Liberal (Venstre) Party minority government, but was then extended by the Social Democrats to cover practically all employees working in Denmark from outside the European Union. 

When the rule was proposed, the government said requiring all payments to be made to an account in a Danish bank would “strengthen the possibilities for Danish Agency for International Recruitment and Integration (SIRI) to check if an employee is in fact receiving the salary promised in their employment contract”. 

Under the rule, a bank account needs to be set up within 90 days of the residence permit being granted or the employee entering Denmark. 

Why is it a problem? 

It can take months for a new arrival in Denmark to get a Danish bank account, as they first need to get a residency permit, then a CPR number, a Danish address, access to the MitID digital identification service, and a health insurance card. 

As a result, business organisations have argued that bureaucracy means they can sometimes go for months without a salary.

“For employers, it is extremely stressful to have highly educated and highly qualified employees they would like to retain in their new position, but they cannot pay their wages,” Rikke Wolfsen, head of the Danish immigration practice at EY, told the Politiken newspaper. “As for the employees, companies have told us that some just say, ‘well, I can’t do that, this. There are other countries in the EU where I avoid all that hassle’.” 

According to a survey by the Confederation of Danish Industry (DI), 84 percent of Danish companies said that international employees had problems getting a Danish bank account. 

Søren Kjærsgaard Høfler, a consultant at DI, argued in comments to Politiken that SIRI could check that the right salary was being paid through the Danish Tax Agency’s digital reporting system, eIndkomst, making the extra security of requiring Danish bank accounts unnecessary. 

In addition, he said he knew of no other country that had a similar requirement. 

Who wants to get rid of the bank rule? 

Denmark’s three major business organisations, DI, the Confederation of Danish Employers, and the Danish Chamber of Commerce are all calling on the new three-party coalition to remove the rule in reforms to work permits expected to be announced later this month. 

“We have set something up which is quite simply pointless,” Erik Simonsen, deputy director of the Confederation of Danish Employers told Politiken, calling on the government to “remove this sort of thing, which only serves to make life more difficult.” 

Høfler said that DI “supported the companies in saying that we do not see any sense in this rule”. 

The Liberal Party, one of the three parties in Denmark’s new ruling coalition, has given its support to scrapping, or at least reforming, the rule. 

“Of course, we must take the messages we receive from the business community seriously when it comes to the fact that they do not think this makes sense”, Christoffer Aagaard Melson, employment spokesman for the Liberals, told Politiken. 

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WORK PERMITS

‘Tinder for jobs’: EU’s new job scheme for non-EU workers moves step closer

The creation of a common EU Talent Pool platform, in which non-EU nationals can register their profiles and find jobs across the 27 member states, has moved a step closer to reality.

'Tinder for jobs': EU's new job scheme for non-EU workers moves step closer

At a meeting of the Justice and Home Affairs Council in Luxembourg, the EU Council, which includes representatives of each of the 27 member states, agreed a joint position on the proposal, referred to as “Tinder for jobs” by EU Home Affairs Commissioner Ylva Johansson. 

The Council will now begin negotiating with the European Parliament to agree on the final legislative text on the proposal, which is part of the EU’s broader skills and talent mobility package. 

What’s the scheme?

“This will not replace anything but it will be an additional tool to make recruitment from outside the EU easier,” Johannes Kleis, a press officer at the European Council, told The Local. “It should help to overcome some barriers that employers might find if they look for staff outside the EU, and this portal will be an easier entry point for third country jobseekers.” 

In a press release announcing the agreement, the Council said it hoped to reconcile principles of fair recruitment with a secure and comprehensive migration system while also “reinforcing the position of the European Union in the global race for talent”. 

READ ALSO: The new scheme to help non-EU nationals find jobs in Europe

The EU’s Home Affairs Commission Ylva Johansson hsa described the Talent Portal as ‘Tinder for jobs’. Photo: Simon Wohlfahrt/AFP

The idea is to set up an EU-wide online platform where jobseekers from outside the EU can set up profiles detailing their skills, qualifications, work experience and which languages they speak. Employers from all participating member states will then be able to post up jobs to the platform. 

Only job vacancies involving skills or professions where member states or the EU as a whole have declared a labour shortage will be listed on the platform. 

The Talent Pool will be designed to help EU employers overcoming some of the challenges of recruiting internationally by helping ensure the “accuracy, quality and comparability” of the foreign applicants’ qualifications and skills. It will also help applicants overcome some of their current difficulties in “accessing and understanding information about recruitment processes” as well as reducing costs. 

The Talent Pool is not intended to set up a common work permit system, with anyone who gets a job through the platform still having to apply for a regular work permit in the country where they find a job. 

The Council has added several new proposals to the system put forward by the European Commission in November, setting up a withdrawal procedure through which member states can leave the Talent Pool after giving six month’s notice.

The Council also wants to empower member states to be able to decide whether individual employers can post up vacancies, whether private employment agencies can do so, or whether only state-run national employment agencies can do so.   

What happens next?

“We’re at the beginning,” Kleis said. “The European Parliament and the Council will now have to sit together to agree on the legal text, and that will happen after the summer. From the Council side, this is the first step but the legislation has yet to be agreed on. So there a lot more hoops to jump through.”  

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