Altered Summary: Denmark's Adjustments to Work Permit Regulations
In a bid to address the push for more foreign labor from businesses and pro-business political parties, the Danish government has announced reforms to the Pay Limit Scheme, a work permit pathway for non-EU nationals. These changes aim to maintain fair wage standards for foreign workers and ensure compliance with Danish labor market norms under the respective work permit schemes.
Key Changes in the Pay Limit Scheme for 2025
The new minimum annual salary threshold for the standard Pay Limit Scheme is now DKK 514,000, up from DKK 487,000 in the previous year. For the Supplementary Pay Limit Scheme, the minimum salary is set at DKK 415,000, increased from DKK 393,000.
Conditions regarding salary and benefits
Only certain components of salary count toward meeting the minimum threshold. These include fixed salary paid as liquid assets, payments to labor market pensions, and paid holiday allowance (only when paid by the current employer in the following year). Benefits such as paid canteen, free car, phone, internet, or housing expenses do not count towards the salary threshold. The salary must meet the threshold even if the employee takes unpaid holidays.
Additional rules and considerations
Applications must match the appropriate Danish International Standard Classification of Occupations (DISCO) code, and salary must align with income statistics for the job role and region. If the employer is covered by a collective agreement or belongs to a trade association with one, the salary is generally accepted without extra scrutiny. Otherwise, salary must meet at least the lower quartile level for the position based on Danish income data.
The foreign national’s full salary must be paid into a Danish bank account if working in Denmark for more than six months, except in Fast-Track cases. These changes also affect other work permit schemes such as the Fast-track Scheme, Researcher’s Scheme, Positive Lists, Special Individual Qualifications Scheme, Herdsmen and Farm Managers Scheme, and Internship Scheme.
The revisions bolster fair labor practices by ensuring foreign workers receive pay comparable to Danish standards. The proposal includes an agreement between Dansk Arbejdsgiverforening (DA) and Fagbevægelsens Hovedorganisation (FH) to allow inspections at workplaces to ensure compliance with the rules.
The 16 non-EU countries eligible for the lower limit are the USA, the United Kingdom, Singapore, China, Japan, Australia, Canada, India, Brazil, Malaysia, Montenegro, Serbia, North Macedonia, Albania, Ukraine, and Moldova. The proposal must be approved by parliament.
It is important to note that there is no limit to how many times a company can use the Pay Limit Scheme, but it will be suspended if unemployment rises. Suspension of the Pay Limit Scheme will occur if unemployment reaches 3.75% for three consecutive months. Companies using the Pay Limit Scheme will be obliged to be part of a collective bargaining agreement with a trade union.
The plan is a response to the push for more foreign labor from businesses and pro-business political parties like the Liberal (Venstre) party and the Moderates. The plan needs parliamentary approval but is expected to be a formality, given the government's majority.
The full text of the agreement can be found on the Employment Ministry website (in Danish).
In light of the advocacy for imported foreign labor by businesses and pro-business political groups, including the Liberal (Venstre) party and the Moderates, the new minimum annual salary thresholds for Danish work permit schemes, such as the Pay Limit Scheme and other schemes like the Fast-track Scheme, Researcher’s Scheme, and Internship Scheme, have been revised to maintain fair wage standards for foreign workers. To further ensure compliance with the new rules, an agreement between Dansk Arbejdsgiverforening (DA) and Fagbevægelsens Hovedorganisation (FH) will allow inspections at workplaces to uphold fair labor practices.
