‘One in four’ Danish companies reliant on foreign labour

More than half Danish companies employ foreign labour and one in four say they could not run their company without them, according to a member survey of 1,255 company managers by the Lederne management union.

'One in four' Danish companies reliant on foreign labour
Computer programmers and managers at the Copenhagen startup AthGene back in 2015. Photo: David Leth Williams/Ritzau Scanpix

Of the 1,255 members who replied to the survey, 759 said they employed foreign workers and 354, more than one in four, said that these workers were essential to their business.

“This tells us that we cannot run Denmark without foreign labour, so it is not a discussion whether we need foreign labor or not. We have it, and we need more of it,” Bodil Nordestgaard Ismiris, the union’s managing director, told the Politiken newspaper.

“That’s why the message from us is that we must do away with all these weird rules which mean that today in Denmark we actually expel many well-functioning, well-integrated people because of some very strange arguments. We have to understand in Denmark that every time we do that, we shoot ourselves in the foot,” she said.

In November, there were 365,031 foreign nationals employed in Denmark, nearly double the 181,567 who were working in the country ten years ago. 

According to Nordestgaard Ismiris, more than 60,000 job offers have had to be withdrawn in Denmark over the past six months because the positions could not be filled. 

Denmark’s three-party centre coalition has announced that it wants to lower the minimum salary threshold for work permits, so long as unemployment is low.

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

Danish companies are currently reporting record numbers of unfilled positions, with an analysis by the Economic Council of the Labour Movement predicting that if current trends continue Denmark will be short of 99,000 skilled workers. 

Despite this, Employment Minister Ane Halsboe-Jørgensen, from the Social Democrats is concerned that loosening Denmark’s strict work permit rules too much risks unemployed people in Denmark being kept out of jobs by foreign labour, telling Politiken she would prioritise getting people already in Denmark who are unemployed into jobs.

The rules would only be loosened, she said, at times when unemployment is particularly low. 

Mohammad Rona, immigration spokesperson for the Social Democrat’s government partners, the Moderates, wants to launch a broader critical review of Danish work permit rules.

“There are some rules in this country where logic does not prevail, unfortunately. It is my opinion that we should have looked at – and potentially tightened up – rules that prevent good companies from keeping their good employees”, he has told Politiken.

Discussions over the bill are ongoing behind the scenes, and the new work permit bill is expected to be finalised in February. 

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Danish parliament set to vote through relaxed work permit rules

Denmark's parliament is expected to vote on Thursday to make changes to Denmark's foreigners law designed to make it easier to for companies to hire internationally.

Danish parliament set to vote through relaxed work permit rules

The bill went through its second reading on Monday without any Danish MPs making objections or calling for changes, suggesting it is likely to be voted through on Thursday without any serious opposition. 

The bill, which was submitted to parliament in February by Denmark’s immigration minister Kaare Dybvad Bek, will permanently reduce the minimum wage required under the Pay Limit Scheme (Beløbsordning), making it easier for companies to recruit skilled workers from non-EU countries.

It will also open up the country’s fast-track work permit certification scheme to companies with as few as ten employees, extend the job search period for foreign graduates of Danish universities to three years, add more job titles to the Positive List for People with Higher Education, and extend the Start-up Denmark scheme for entrepreneurs. 

“This may be a game changer for the smaller companies hiring employees within industries with lower salary thresholds where the new hire has only a few years of experience,” Rikke Wolfsen, country manager for EY’s Danish Global Immigration practice, said of the lower salary thresholds. 

The amendments, which should come into force on April 1st, will mean that non-EU citizens hired to work in Denmark will need to earn a minimum of only 375,000 kroner per year, down from 448,000 kroner under the old rules.

Wolfsen warned that jobs given to non-EU citizens hired internationally would still be subject to DISCO, the Danish version of the international classification of job titles, International Standard Classification of Occupations (ISCO-08). 

This means that if the role being hired for was normally paid 425,000 kroner, for example, employers will still have to pay this level, and not the 375,000 kroner minimum. 

“In general, third-country nationals employed by Danish companies must earn a salary that corresponds to that paid to Danish nationals in similar positions with similar educational backgrounds and work experience,” EY wrote in a tax alert

A temporary version of lower salary threshold was part of a political agreement on strengthened international recruitment reached in June last year between a majority of parties in the Danish parliament. 

The reduction was set to remain in place for an initial three-year period. However, the proposal was never passed into law because Prime Minister Mette Frederiksen called an election before it was voted on in parliament. The renewed government proposal makes the reduction to the Pay Limit minimum wage permanent, rather than introducing it on a temporary basis.

Some parties had been pushing for the bill to also change an unpopular rule that requires the salaries of foreign hires to be paid into a Danish bank account requirement, but this has not made it into the current text of the bill.