Denmark reinstates wage compensation for Covid-19-hit businesses

Nightlife in Copenhagen in September 2020. A wage compensation package has been reinstated for businesses who send staff home due to new Covid-19 restrictions.
Nightlife in Copenhagen in September 2020. A wage compensation package has been reinstated for businesses who send staff home due to new Covid-19 restrictions. Photo: Ólafur Steinar Rye Gestsson/Ritzau Scanpix
Companies who send staff home due to Covid-19 restrictions will be able to claim compensation from the state to wages can be paid, the government said on Friday.

A deal between the government, trade union and employer representatives provides for the wage compensation, which resembles a scheme used to compensate workers affected by business closures earlier in the pandemic.

The deal aims to prevent companies in the hospitality sector – which is the sector primarily impacted by restrictions announced this week – from laying off staff due to revenue losses.

Restrictions announced on Wednesday require nightclubs to close and ban alcohol sales between midnight and 5am. Companies were also advised to cancel Christmas parties and staff to work at home where possible.

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“The government has today, along with unions and employer associations, reached an agreement that protects both staff and companies which will be impacted by the restrictions and recommendations which the government has announced,” acting business minister Mattias Tesfaye said in a statement.

Specifically, the deal gives affected companies – including companies whose business model involves arranging Christmas parties for other businesses – access to wage compensation if they are required to send more than 30 percent of staff home.

The leader of the Danish Trade Union Confederation (Fagbevægelsens Hovedorganisation, FH), Lizette Risgaard, said the deal was an important step.

“The provision means that workers in vulnerable sectors can retain their incomes and their associations with their employers instead of being let go,” Risgaard said.

A Covid-19 wage compensation scheme was first introduced in Denmark in March 2020. The structure of the scheme has since been updated and adapted on several occasions.

The new agreement is effective until January 15th.


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