As an alternative to redundancies, businesses may send home employees (on full salary) and apply for salary subsidies equal to:
- 75 per cent of the total monthly remuneration (up to DKK 30k per month) for salaried staff, and
- 90 per cent of the total monthly remuneration (up to DKK 30k per month) for hourly workers, apprentices and trainees.
The subsidy applies for employees employed no later than 9 March 2020. Employees hired before 9 March 2020 and commencing employment between 9 March and 8 July 2020 can be comprised by the salary subsidy scheme from the commencement of the employment.
Businesses with a Danish Business Registration Number (CVR number) and at least one (eligible) employee.
The company can apply for the subsidy if it is planning on making at least 30 % of work force or 50+ employees redundant due to COVID-19. A corresponding share of the employees must be comprised by the scheme, except in case of special need to call back employees.
Employees sent home must not work, except:
- if called back, including as part of rotating shifts (e.g. weekly rotation). A reduction in subsidy will take place based on full working days regardless of the actual working hours performed by the employee called back.
- trainees and apprentices for education purposes
During a 3 months’ subsidy period, there must be a total of five days, where the employer will receive no salary subsidy and the employees are not entitled to salary (other than holiday pay, if any). If the subsidy period applied for is shorter than 3 months, the five days are prorated. The employer and the employee should seek agreement on the scheduling of the days and they must be distributed proportionally over the subsidy period. It is not clarified how the prolongation of the subsidy period affects the calculation of prorated days, with new guidelines expected soon.
Based on a supplementary agreement of 1 May 2020, apprentices and trainees are not required to take holiday subject to the above clause. The supplementary agreement has retroactive effect as from 9 March 2020. Details can be found here.
During the subsidy period, the company must not make redundancies on financial grounds. If the company carries out redundancies, the subsidy will automatically lapse at the time when the termination notice is served, and, in such case, all employees will be entitled to continue their employment on the terms applicable at the time they were sent home. The subsidies pertaining to the period prior to the lapse of the subsidy period due to redundancies must not be repaid. Termination by the employee or by the employer for other reasons than financial grounds will not bring the subsidy scheme to an end.
The employer cannot use other schemes for sending employees home without salary or other COVID-19 subsidies compensating for the same costs. Individual agreements on leave without pay can be entered into before the subsidy period.
More information is available here.
The Danish Business Authority
Applications may be submitted digitally to the Danish Business Authority here.
As the general rule, the employer can apply for subsidies only once, unless in order to include more employees under the scheme
At the latest 6 months after the end of the company’s subsidy period, the employer must provide to the authority attestation from an accountant setting out which employees have been sent home, documentation that the employees were sent home, the employees’ salaries and that the employees’ employment commenced before 9 March 2020. The shop stewards, if any, must certify the attestation.
Employers who have applied for subsidies before the scheme was extended on 18 April 2020 and who wish to receive subsidies until 8 July 2020 must apply for an extension of the subsidy period.
Based on a supplementary agreement of 1 May 2020, employers who wish to apply for extension of the subsidy period (as set out above) must pay mandatory taxes in accordance with international agreements. Also, companies based in ‘tax havens’ as defined by the European Union are not eligible for compensation. It is not clarified how this regulation will be realized.
From 9 March through 8 July 2020
(Originally form 9 March through 8 June 2020, but on 18 April a prolongation of 1 month through 8 July 2020 was agreed.)