DENMARK: Salary Compensation Scheme and Alternatives to Dismissals in Light of COVID-19

On March 14, 2020, the Danish Government and the social partners reached an agreement on partial salary compensation for Danish companies, which are or will be temporarily releasing their employees from work with full pay (the “Salary Compensation Scheme”). The purpose of the Salary Compensation Scheme is to provide aid for Danish companies that are experiencing significant financial consequences resulting from the restrictions imposed by the Danish Government to help limit the spread of the COVID-19/coronavirus (quarantines and closing of schools, etc.) while maintaining the high employment rate in Denmark and avoiding mass dismissals.

Although dismissals and layoffs are common responses to the economic situation resulting from COVID-19, there are alternatives to dismissals at the employer’s disposal, each of which entails certain considerations for employers with operations in Denmark.

Click here to read more about the Salary Compensation Scheme.

Click here to read about alternatives to dismissals. Note, however, that this document does not address occupational fields covered by collective bargaining agreements, which are often subject to special conditions.


*Tina Reissmann is an attorney with Labora Legal, a Littler Partner Firm in Copenhagen.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.