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WORKING IN DENMARK

‘One in two’ tax inspections found social dumping at Danish companies

Visits by inspectors uncovered the practice of social dumping at over half of companies checked in Denmark last year, the Ministry of Tax said on Friday.

'One in two' tax inspections found social dumping at Danish companies
Workers protest at a Copenhagen construction site where accusations of social dumping were made in 2019. File photo: Ida Guldbæk Arentsen/Ritzau Scanpix

Inspections in 2022 at workplaces including restaurants, construction sites and agricultural and cleaning businesses turned up a large number of cases of social dumping.

Some 3,343 inspections were conducted during the year, scrutinising working environments and tax payments along with staff work and residence permits, the Danish Tax Agency (Skattestyrelsen) said.

Social dumping is defined by the EU as the practice whereby “workers are given pay and/or working and living conditions which are sub-standard compared to those specified by law or collective agreements in the relevant labour market, or otherwise prevalent there.”

This means that, in cases where the Danish authorities detected social dumping, foreign staff were working under poorer conditions than the law or relevant collective bargaining agreement provides for Danish nationals. This saves employers money because the labour costs them less.

The Tax Agency is responsible for checking Danish tax rules are properly complied with. As such, the checks by the Tax Agency checked tax aspects of potential social dumping breaches, with other authorities responsible for other areas.

The Tax Agency can detect social dumping by, for example, checking the amount of income tax or VAT (moms in Danish) paid at a company.

Companies were asked to regulate their tax payments at more than one in two inspections in 2022, according to the tax ministry.

“The new report from the Tax Agency clearly shows that there is an issue here and that the joint efforts from authorities are paying off,” Tax Minister Jeppe Bruus said in the statement.

Some 1.9 billion kroner has been raised by the state in tax demands made as a result of social dumping inspections since 2015.

Last year’s inspections enabled tax authorities to demand 317 million kroner, the highest figure since structured control of social dumping began in 2012. The prior year, 2021, saw demands for 311 million kroner issued as a result of the inspections.

“It’s crucial for the economy and cohesion in society that there is respect for the playing rules of the Danish labour market,” Bruus said.

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WORKING IN DENMARK

Danish company gives unlimited sick days to employees with kids

A Danish energy company has said it will not limit sick days for staff with children. More businesses could eventually adopt the model according to an expert.

Danish company gives unlimited sick days to employees with kids

Denmark has labour rules in place providing for parents to take time off work if their children are sick, but the number of days that can be taken is limited.

This will no longer be the case at energy company Norlys, which has announced unlimited sick days for staff with children, broadcaster DR reports.

READ ALSO: Can you take sick leave in Denmark if your child is ill?

Norlys, which has energy, internet and TV divisions, has around 3,000 employees according to DR.

It will not deduct wages for employees when they stay home to take care of unwell children, nor will the employee lose any holiday or time off in lieu.

“Many of my colleagues were stressed when one of their children got sick. Because of work, many of them – myself included – have dropped off a half-unwell child at kindergarten, nursery or with carers,” Maria Østergaard, a Norlys employee committee member who raised the issue with company leadership, told DR.

She called the decision by Norlys a “huge vote of confidence” and said staff were “happy and very proud” of the move.

The new arrangement took effect on March 1st.

The seemingly generous offer from Norlys to its staff is unusual, even in Denmark, a country known for its work-life balance ethic and with a reputation for good labour conditions.

Professor in labour market research at Aalborg University Thomas Bredgaard told DR he had not seen anything similar before at Danish companies, but said it was likely the idea could spread if it is successful at Norlys.

A current high demand for labour in Denmark means workplaces must make themselves attractive, he noted.

“It’s about offering some good conditions at workplaces so they can attract competent staff. And this is a good example of that,” he said.

Negotiations for collective bargaining agreements could eventually enable the measure to be implemented more broadly, he said.

“If you, for example, can’t get higher salaries or other benefits, you could put this proposal on the table. Good ideas have a tendency to spread,” he said.

READ ALSO: EXPLAINED: What is a Danish collective bargaining agreement?

Norlys director of HR Agnete Lundemose told DR she expected the new staff benefit to boost the company as well as support employees.

“We think we’ll get more satisfied and less stressed staff and we’ll get something back in the form of increased loyalty from employees,” she said.

The HR director added she did not expect a hefty bill arising from increased staff absence.

“We do not expect it to give us a lot of extra costs because we believe that staff are fully capable of balancing it themselves,” she said.

The Confederation of Danish Industry and Danish Chamber of Commerce declined to comment to DR regarding the story, citing ongoing collective bargaining negotiations.

READ ALSO: EXPLAINED: What are the rules for taking sick leave in Denmark?

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