1. Legal Framework
The Danish legal framework regarding social security and healthcare is to be found in a number of individual acts providing social security for employees. A number of these acts are based on EU-legislation.
2. Required Contributions
The Danish Act on Labour Market Supplementary Pension provides that employers and employees must contribute to a supplementary pension scheme for employees, who are employed in Denmark. The supplementary pension is paid out in addition to the old-age pension, and the employer’s contribution is a fixed monthly payment of approximately EUR 25 covering a fulltime employee.
There is no obligation under the law for the employer to provide the employees with different insurances apart from mandatory insurances, such as group life insurance or work injury insurance. However, employers that are bound by collective bargaining agreements are typically obliged to take out certain insurances on death and disability.
4. Required Maternity/Sickness/Disability/Annual Leaves
The right to maternity, paternity, and parental leave is regulated by the Danish Act on Maternity Leave and Allowance. Pursuant to the Act, a female employee has the right to absence in connection with pregnancy and childbirth from 4 weeks before expected childbirth and until 14 weeks after childbirth. Furthermore, a female employee has the right to absence during 32 weeks of parental leave after the 14th week after childbirth.
A male employee is entitled to absence during 2 consecutive weeks of paternity leave within 14 weeks after childbirth. In addition, a male employee is entitled to absence during 32 weeks of parental leave.
Employees who are not entitled to any payment from their employer may be entitled to maternity/paternity pay from the municipality.
The Salaried Employees Act stipulates that a female employee is entitled to 50 per cent of her salary during absence from work due to pregnancy and maternity leave from 4 weeks before expected childbirth and until 14 weeks after childbirth.
Pursuant to the Salaried Employees Act, salaried employees are entitled to full salary, including bonus, during sick leave. An employee who is not covered by the Salaried Employees Act may be entitled to pay during sick leave under the relevant collective bargaining agreement or pursuant to the individual employment agreement. If the employee is not entitled to pay during sick leave, the employee may be entitled to sickness benefits from the municipality pursuant to the Danish Act on Sickness Benefits.
5. Mandatory and Typically Provided Pensions
Danish citizens with permanent residence in Denmark are entitled to old-age pension payable by the State in accordance with the provisions of the Danish Act on Social Pension. There are, however, a number of exceptions to the residential and nationality qualifications following, inter alia, from EU Directives, international treaties and the Danish Act on Social Pension.
The old-age pension is financed through taxes and is consequently not dependent on contributions from the pensioner. The old-age pension is currently payable from the age of 65 to 67 years.
It is not mandatory law for employers to provide pension schemes to employees, however, quite a number of individual employment agreements and, in general, all collective agreements will involve the paid contributions both by the employer and by the individual employee to a pension scheme. The level of contribution is solely a contractual matter and not set by legislation. The pension scheme model will, apart from pension schemes involving civil servants, be a “defined-contribution” pension scheme model.