Unemployment in Denmark falls to lowest level since pandemic began

Unemployment fell an additional 5,300 people from May to June for a total of 108,600 Danes still unemployed, according to the government agency Statistics Denmark. 

Unemployment in Denmark falls to lowest level since pandemic began
Kroner-pinching will be a thing of the past for some families after 5,700 Danes found jobs in June. Photo: Kristian Djurhuus/Ritzau Scanpix.

This latest unemployment rate of 3.8 percent is the lowest since the pandemic began in March 2020, Danish news agency Ritzau reports. Denmark recovered a total of 20,000 jobs in May and June, and the total Danish workforce is calculated at 2,911,000, according to Statistics Denmark. 

“A fall in unemployment of up to 20,000 in just two months is completely absurd, and it puts a clear picture of how fast it goes,” Jeppe Juul Borre, chief economist at Arbejdernes Landsbank, told Ritzau. 

“Unemployment is centimetres from catching up with what was lost from the crisis,” he added.

The above graph from Statistics Denmark tracks unemployment since 2019. Blue represents out-of-work Danes collecting unemployment benefits (from a union they pay into while employed), green is out-of-work Danes receiving social security from the state, and orange is Danes who are working but still receive unemployment benefits and/or social security (likely due to part-time work or reduced hours). 

The unemployment rates for men and women are the same, Statistics Denmark added. While unemployment fell in June across all age groups, 25-29-year-olds saw the greatest gains. That age bracket still has the highest unemployment rate at 6.7 percent. 

West Jutland has the country’s lowest unemployment rate at 2.7 percent, while Copenhagen has the dubious honor of the highest at 5.2 percent. 

Søren Kristensen, chief economist at Sydbank, told Ritzau he expects the labor market will have fully rebounded within the next several months – and it may have already done so in July. 

“My bid will be that we will spend July and August to catch up on what was lost, and then around September 1, when the summer is over, then we will stand and be able to see that we have made up for all that was lost from the corona crisis,” Kristensen said. 

READ MORE: Denmark releases new list of ‘in-demand’ professions 

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Feriepenge: Denmark’s vacation pay rules explained

If you work for a company in Denmark, your yearly time off is likely to be provided for by the 'feriepenge' accrual system for paid annual leave.

If you work in Denmark, a good understanding of 'feriepenge' (holiday allowance) rules will help you plan time off in the summer and around the calendar.
If you work in Denmark, a good understanding of 'feriepenge' (holiday allowance) rules will help you plan time off in the summer and around the calendar. Photo by Felipe Correia on Unsplash

One of the perks of being a full-time employee in the country, Danish holiday usually adds up to five weeks of vacation annually. There are also nine days of public holidays, which everyone benefits from.

The Danish Holiday Act (Ferieloven) provides the basis for paid holiday through accrued feriepenge (‘vacation money’ or ‘vacation allowance’). This covers most salaried employees, although some people, such as independent consultants or freelancers, are not encompassed.

What is feriepenge?

‘Holiday money’ or feriepenge is a monthly contribution paid out of your salary into a special fund, depending on how much you earn.

You can claim back the money once per year, provided you actually take holiday from work. It is earned at the rate of 2.08 vacation days per month.

If you are employed in Denmark, you will be notified when the money can be paid out (this is in May under normal circumstances) and directed to the website, from where you claim it back from national administrator Udbetaling Danmark.

Anyone who is an employee of a company registered in Denmark and who pays Danish taxes is likely to receive holiday pay, as this means you will be covered by the Danish Holiday Act (ferieloven). You are not an employee if, for example, you are self-employed, are a board member on the company for which you work or are unemployed.

How do I save up time off using feriepenge?

The law, which covers the five standard weeks or (normally 25 days) of paid vacation, states that you are entitled to take vacation during the vacation year period. You earn paid vacation throughout a calendar year at the rate of 2.08 days per month.

You earn vacation time in the period September 1st-August 31st. You can then use your vacation in the same year that you earn it and up to December 31st the subsequent year – in other words, over a 16-month period.

These rules also mean that holiday earned during a given month can be used from the very next month, in what is referred to as concurrent holiday (samtidighedsferie).

So when can I take time off using this accrued vacation?

The Danish vacation year is further broken down so that there is a “main holiday period” which starts on May 1st and ends on September 30th. During this time, you are entitled to take three weeks’ consecutive vacation out of your five weeks.

A lot of people take three weeks in a row while others break it up – which is why you often hear Danish people who work full time wishing each other a “good summer holiday” as if it’s the end of the school term.

Outside of the main holiday period, the remaining 10 days of vacation can be taken whenever you like. You can take up to five days together but may also use the days individually.

If your employer wants to decide when you should take any of your vacation days, they have to let you know at least three months in advance for main holiday, or one month in advance for remaining holiday (barring exceptional circumstances, such as an unforeseen change to the company’s operations or if the company closes for the summer shortly after you begin employment).

If you have not earned paid vacation, you still have the right to take unpaid holiday.

Public Holidays

In addition to the vacation days, there are also public holidays. These are bunched up mostly in the early part of the year and around Christmas. However, the period between June and Christmas includes the above-mentioned main annual leave, so there’s not usually long to wait until you can take time off.

Denmark has public holidays on:’

  • New Year’s Day  
  • Maundy Thursday
  • Good Friday
  • Easter Monday  
  • Great Prayer Day (Store Bededag)
  • Ascension Day
  • Whit Monday
  • Christmas Day
  • Boxing Day

In addition to the usual public holidays, companies can choose to give extra time off, for example on Christmas Eve or New Year’s Eve. There are also differences regarding Labour Day and Constitution Day, depending on where you work, what kind of work you do, or the collective bargaining agreement under which you are employed.

Sometimes you can get a whole day off for these extra holidays, sometimes just a half day. Check with your employer for details.