Six things Denmark could change to make getting work permits smoother
Denmark's government parties are currently negotiating on changes to the work permit system to make it easier for companies to bring in much-needed foreign labour. We asked Rikke Wolfsen, the country lead of EY's local immigration practice, for some changes she'd like to see.
In the agreement that formed Denmark's new three-party coalition, the parties agreed to “relax access to foreign labour for as long as unemployment is low", making an existing deal to boost international recruitment permanent, and bringing in a new scheme with lower pay limits [beløbsordninger] for certified companies which are encompassed by controlled wage and working conditions.
Wolfsen told The Local that Denmark's business lobby should make the most of the current broad political support for making it easier for companies to hire foreign workers.
"We've been screaming for focus on this for years and years, and now the focus seems to be where we want it to be, to try to reduce the bureaucratic hurdles," she said.
"We're trying to make the most of it while the public focus is actually here, because we know from experience that soon focus will be on something else, and the political will to change anything will most likely not be there any longer."
With that in mind, here are six of her proposals to make the system work more smoothly.
1. Amend or remove the Danish bank account requirement
Aside from lowering the salary threshold for work permits, this is the reform that has so far received the most coverage in the Danish media, with the Confederation of Danish Employers, the Confederation of Danish Industry, and the Danish Chamber of Commerce all calling for the new government to remove, or at least amend the requirement.
READ ALSO: Why Danish businesses want to scrap bank account work permit rule
The rule, originally brought in by the Liberal Party (Venstre) in 2017, but expanded by the Social Democrats in 2020, requires all foreign hires that come to Denmark on a work permit to be paid their salaries into a Danish bank account.
Opening a bank account in Denmark generally requires a residency permit, a CPR number, a Danish address, access to the MitID digital identification service, and a health insurance card, so the process can take months, during which time foreign employees need to survive without pay.
"In the industry, we often hear from international employees who have relocated to Denmark that had they known that they would risk not getting paid for several months they would have reconsidered even relocation here – I heard this as late as today," Wolfsen said.
The Danish Agency for International Recruitment and Integration (SIRI) can already check that employees are in fact being paid the promised salary through the Danish Tax Agency’s digital reporting system, eIndkomst, making the extra security of requiring Danish bank accounts unnecessary.
They also have the option of requesting copies of salary slips and other documentation to support both the amount and payment of the salary to an employee.
2. Burn This Disco Out
The international recruitment agency recently introduced a requirement that applications for all work permits must now include a so-called "Disco code" for the job being offered.
DISCO-08 is the official Danish version of the international classification of job titles, International Standard Classification of Occupations (ISCO-08), and is designed to make it possible to compare employees by job title regardless of their education level or years of experience.
For a lot of companies, Wolfsen said it was not easy to find the code, let along then check the salary tied to the code in the official Danish statistical overview of salaries to ensure that the authorities would approve it.
Many companies, she said, operated only with very high-level codes when reporting salaries and did not use the codes at as detailed a level as the immigration authorities intended and expected them to do.
"The companies simply aren’t entirely sure how to do this; and the salary will often end up being much higher than the salary they pay their Danish employees in similar or identical roles," she said.
She said that the authorities were also struggling with the codes, adding that they had made the immigration landscape in Denmark harder to navigate for ordinary Danish companies, particularly smaller ones who are hiring international employees for the first time.
She said that the main purpose of the codes -- making it easier for the authorities to check that employment terms for non-EU nationals were the same as Danish terms -- could be achieved by simpler means.
3. Refine the statistical salary overview
Another problem Danish employers face is checking the salary required to be paid to a particular international employee in the official Danish statistical overview of salaries to make sure it is approved by the authorities.
The overview is based on the educational background of the individual, the job in Denmark and the prior experience held. When checking the statistical overview, the number of years of prior experience when having 5 years of prior experience or more is divided into spans of 4 years, e.g. 5-9, 10-14, etc.
"That means if you have five years of prior relevant experience, the salary that you need to meet would be the amount for five to nine years because there is only one amount for the entire span – and so you risk increasing the salary artificially for some people," Wolfsen complained.
She called for the salary overview to be refined so that it is broken down by each year of experience.
"If the government or the political parties wish to maintain this method, they should take some responsibility to make sure that we then adhere to, in terms of salary, reflects the actual truth."
4. It might not be enough to lower salary threshold to 375,000 kroner
Wolfsen warned that the proposal to lower the salary threshold for a work permit to 375,000 kroner for some companies in some situations ignored the fact that the allowable salary level was also set by the statistical salary overview.
"I'm very mindful that the applications under this potential new scheme, even though the lower threshold is applied, will still be subject to the same rules in terms of DISCO codes and referring to the salary overview," Wolfsen said. "So even if the lower threshold will be set to 375,000 [kroner], they might still need to pay a much higher salary if the statistical overview warrants a higher salary for that particular individual, given the educational background and prior experience."
5. Tie family member applications to work permits
Although Denmark's fast-track scheme for certified companies means work permits are often processed quickly, the fast-track scheme does not extend to family member applications.
"If a given employee is to work in Denmark and has, say, a wife and two children, the processing time can be up to two months for the family members," Wolfsen said. "Post-Covid, what we see is that most of the employees that we help are not willing to move across the globe without their family members."
The immigration authorities have recently reduced the processing time of family members and have said they are already looking into how to better tie work permit applications and family member applications more closely together.
6. More resources for guiding companies in work permit applications
A few years back, SIRI provided guidance to companies at a much more detailed level, offering companies to advise and guide them on the options for them to bring international employees to Denmark.
This guidance has decreased markedly in recent years, Wolfsen said.
"The authorities have removed this most likely because they simply don't have the resources to allocate people to do that," she said. "One of the things we hear from both companies and relocaters is that they really miss being able to go into dialogue with the authorities on the more complex details of a case, with a one-on-one discussion on the options. You can now only do that if you have been awarded a contact person with the authorities – and even then, you can generally only ask questions on specific schemes"
Wolfsen said she realised it was expensive to allocate a group of people to guide outsiders on the rules and options, but she said that for smaller companies or companies new to hiring international employees, it was still very much necessary.
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In the agreement that formed Denmark's new three-party coalition, the parties agreed to “relax access to foreign labour for as long as unemployment is low", making an existing deal to boost international recruitment permanent, and bringing in a new scheme with lower pay limits [beløbsordninger] for certified companies which are encompassed by controlled wage and working conditions.
Wolfsen told The Local that Denmark's business lobby should make the most of the current broad political support for making it easier for companies to hire foreign workers.
"We've been screaming for focus on this for years and years, and now the focus seems to be where we want it to be, to try to reduce the bureaucratic hurdles," she said.
"We're trying to make the most of it while the public focus is actually here, because we know from experience that soon focus will be on something else, and the political will to change anything will most likely not be there any longer."
With that in mind, here are six of her proposals to make the system work more smoothly.
1. Amend or remove the Danish bank account requirement
Aside from lowering the salary threshold for work permits, this is the reform that has so far received the most coverage in the Danish media, with the Confederation of Danish Employers, the Confederation of Danish Industry, and the Danish Chamber of Commerce all calling for the new government to remove, or at least amend the requirement.
READ ALSO: Why Danish businesses want to scrap bank account work permit rule
The rule, originally brought in by the Liberal Party (Venstre) in 2017, but expanded by the Social Democrats in 2020, requires all foreign hires that come to Denmark on a work permit to be paid their salaries into a Danish bank account.
Opening a bank account in Denmark generally requires a residency permit, a CPR number, a Danish address, access to the MitID digital identification service, and a health insurance card, so the process can take months, during which time foreign employees need to survive without pay.
"In the industry, we often hear from international employees who have relocated to Denmark that had they known that they would risk not getting paid for several months they would have reconsidered even relocation here – I heard this as late as today," Wolfsen said.
The Danish Agency for International Recruitment and Integration (SIRI) can already check that employees are in fact being paid the promised salary through the Danish Tax Agency’s digital reporting system, eIndkomst, making the extra security of requiring Danish bank accounts unnecessary.
They also have the option of requesting copies of salary slips and other documentation to support both the amount and payment of the salary to an employee.
2. Burn This Disco Out
The international recruitment agency recently introduced a requirement that applications for all work permits must now include a so-called "Disco code" for the job being offered.
DISCO-08 is the official Danish version of the international classification of job titles, International Standard Classification of Occupations (ISCO-08), and is designed to make it possible to compare employees by job title regardless of their education level or years of experience.
For a lot of companies, Wolfsen said it was not easy to find the code, let along then check the salary tied to the code in the official Danish statistical overview of salaries to ensure that the authorities would approve it.
Many companies, she said, operated only with very high-level codes when reporting salaries and did not use the codes at as detailed a level as the immigration authorities intended and expected them to do.
"The companies simply aren’t entirely sure how to do this; and the salary will often end up being much higher than the salary they pay their Danish employees in similar or identical roles," she said.
She said that the authorities were also struggling with the codes, adding that they had made the immigration landscape in Denmark harder to navigate for ordinary Danish companies, particularly smaller ones who are hiring international employees for the first time.
She said that the main purpose of the codes -- making it easier for the authorities to check that employment terms for non-EU nationals were the same as Danish terms -- could be achieved by simpler means.
3. Refine the statistical salary overview
Another problem Danish employers face is checking the salary required to be paid to a particular international employee in the official Danish statistical overview of salaries to make sure it is approved by the authorities.
The overview is based on the educational background of the individual, the job in Denmark and the prior experience held. When checking the statistical overview, the number of years of prior experience when having 5 years of prior experience or more is divided into spans of 4 years, e.g. 5-9, 10-14, etc.
"That means if you have five years of prior relevant experience, the salary that you need to meet would be the amount for five to nine years because there is only one amount for the entire span – and so you risk increasing the salary artificially for some people," Wolfsen complained.
She called for the salary overview to be refined so that it is broken down by each year of experience.
"If the government or the political parties wish to maintain this method, they should take some responsibility to make sure that we then adhere to, in terms of salary, reflects the actual truth."
4. It might not be enough to lower salary threshold to 375,000 kroner
Wolfsen warned that the proposal to lower the salary threshold for a work permit to 375,000 kroner for some companies in some situations ignored the fact that the allowable salary level was also set by the statistical salary overview.
"I'm very mindful that the applications under this potential new scheme, even though the lower threshold is applied, will still be subject to the same rules in terms of DISCO codes and referring to the salary overview," Wolfsen said. "So even if the lower threshold will be set to 375,000 [kroner], they might still need to pay a much higher salary if the statistical overview warrants a higher salary for that particular individual, given the educational background and prior experience."
5. Tie family member applications to work permits
Although Denmark's fast-track scheme for certified companies means work permits are often processed quickly, the fast-track scheme does not extend to family member applications.
"If a given employee is to work in Denmark and has, say, a wife and two children, the processing time can be up to two months for the family members," Wolfsen said. "Post-Covid, what we see is that most of the employees that we help are not willing to move across the globe without their family members."
The immigration authorities have recently reduced the processing time of family members and have said they are already looking into how to better tie work permit applications and family member applications more closely together.
6. More resources for guiding companies in work permit applications
A few years back, SIRI provided guidance to companies at a much more detailed level, offering companies to advise and guide them on the options for them to bring international employees to Denmark.
This guidance has decreased markedly in recent years, Wolfsen said.
"The authorities have removed this most likely because they simply don't have the resources to allocate people to do that," she said. "One of the things we hear from both companies and relocaters is that they really miss being able to go into dialogue with the authorities on the more complex details of a case, with a one-on-one discussion on the options. You can now only do that if you have been awarded a contact person with the authorities – and even then, you can generally only ask questions on specific schemes"
Wolfsen said she realised it was expensive to allocate a group of people to guide outsiders on the rules and options, but she said that for smaller companies or companies new to hiring international employees, it was still very much necessary.
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