The use of independent contractors in Denmark is increasing, and the primary reason for this development is because of how the Danish labour market is structured, where it is in the interests of both employers and employees for work to be organised as flexibly as possible.
The distinction between employees and independent contractors is defined by court rulings regarding employment protection, holiday pay and tax treatment. When distinguishing between an employee and an independent contractor the content of the contract is important. However, how the parties actually conducted themselves during their day-to-day relationship will prevail. Finally ‘risk taking’ is an important factor; an independent contractor bears the responsibility of financial risk in the work that he does, whereas an employee is only expected to provide his talent and time to his employer, but is not expected to bear any part of the financial risk of the business in which he is employed.