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WORK PERMITS

What do we know about Denmark’s plans to relax work permit rules?

In the agreement which formed Denmark's new government, the three coalition parties agreed to “relax access to foreign labour for as long as unemployment is low", meaning easier work permits for skilled foreign labour. How much do we know about the plans?

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The government plans to make it easier for Danish companies to recruit abroad. Photo: Headway, Unsplash

In the coalition policy platform “Responsibility for Denmark“, the Social Democrats, Liberal (Venstre) and Moderate Parties agreed on three separate measures to make it easier for Danish companies to import skilled foreign labour:

  • making permanent the three-year agreement signed last year on easier international recruitment;
  • bringing in a new scheme through which so-called ‘certified companies’ can bring in lower wage labour;
  • providing extra funds to Agency for International Recruitment and Integration (SIRI) to speed up the processing of work permit cases. 

The agreement on strengthened international recruitment 

The Social Democrats struck an agreement with seven other political parties in June last year to temporarily loosen work permit requirements to “remedy the shortage of labour” and “support the Danish economy during the current
economic situation”. 

The scheme, which is is expected to be implemented later this year, will allow Danish companies to recruit up to 15,000 highly skilled workers internationally who can be paid as little as 375,000 Danish kronor annually over a period of three years. 

This salary threshold is much lower than for current international recruits, for whom the minimum salary threshold from January 1st this year is a hefty 465,000 Danish kronor. 

According to the agreement, the lower threshold will be automatically adjusted each year to keep pace with rising salaries. Under the deal, the scheme will only remain active so long as seasonally adjusted gross unemployment is below 3.75 per cent.

Residence and work permits obtained under the scheme have a duration of up to five years, but are conditional on the holder not receiving benefits under the Active Social Policy Act or the Integration Act, and also not committing any crimes serious enough to merit deportation. (If they do, then their residence permit ceases to be valid). 

Under the government deal, the idea is that this agreement will now be made permanent. 

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Bringing in a new scheme for ‘certified companies’

On top of the scheme agreed last year, the government plans to launch another scheme for companies which are certified by the Agency for International Recruitment and Integration (SIRI) to hire foreign workers under Denmark’s fast-track scheme. 

Under the scheme, the companies (see list here) will be given an annual quota for an as yet undecided number of international employees who can be recruited “with a lower salary threshold”. This scheme will be reevaluated after two years. 

Providing extra funds to speed up the processing of work permit cases 

The government agreement did not detail how much extra funding would go to the Agency for International Recruitment and Integration to speed up the processing of work permit cases and renewals. 

The parties agreed that funds would be allocated in the next budget (likely to be announced in August), which means anyone hoping for faster processing of their permit will probably have to wait until next year. 

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WORK PERMITS

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

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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