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Compensation to companies for salary expenses

The Danish Government and the social partners have entered into an agreement regarding salary compensation to the companies in order to maintain the employees’ employment in the companies during the present tough times with Corona / COVID-19.

The agreement applies for employees in all private companies that are extraordinarily hard financially afflicted because of Corona / COVID-19 and therefore face having to notify dismissals for:

  • at least 30% of the employees, or
  • more than 50 employees.

In that case, the company will receive a salary compensation from the Government if the company prevents to dismiss their employees as a result of the exceptional situation in which Denmark finds itself. The following compensation will be granted:

  • for fulltime monthly paid employees, the compensation amounts to 75% of the salary, however maximum DKK 23,000 per month,
  • for hourly workers the compensation amounts to 90%, however maximum DKK 26,000 per month.

The employees must pay five days of leave, holiday, time off or unpaid days off in order to receive compensation.

The temporary compensation schedule will apply from 9 March 2020 to 9 June 2020.


Application

The companies must apply for the compensation on the Danish Business Agency’s (“Erhvervsstyrelsen”) portal Virk.dk

The Danish Business Agency works on being able to receive the first applications mid-week 13 and to start paying out the first salary compensations in the week after.

The salary expenses that are compensated in this scheme cannot be included in the basis for calculation of compensation in other COVID-19 support schemes.

Documentation

It is required that the companies must subsequently, with auditor’s assistance, document that they have sent home the employees in question in the specified period during which the scheme applies.

The employees that are sent home must be registered by their CPR-numbers in the application and the subsequent audit.


Please do not hesitate to contact us if you have questions to the above – or if you have questions in general. We will do our utmost to guide our clients through this difficult situation.