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By Marcus Hoy
June 17—The Danish Parliament has voted to increase the minimum salary for non-EU/EEA workers employed directly by companies and scrap a work authorization scheme designed to attract skilled workers from outside the European Union and the European Economic Area.
While acknowledging its flaws, a majority in the government favored retaining the so-called green card scheme. On June 8, however, a private members’ bill proposing its abolition was passed with cross-party support.
In effect since 2007, the green card system allowed job seekers to receive a work permit before traveling to Denmark provided certain criteria were met. While it was designed to attract experts, the majority of existing green card holders are in fact employed in unskilled jobs or receiving unemployment benefits. According to Sara Baldus, an attorney at the Norrbom Vinding legal firm, recent research shows that only 22 percent of green card holders are working in their preferred fields, while 43 percent are working in manual positions and 28 percent are unemployed.
Attorney Marianne Granhoj of Kromann Reumert agreed that the green card scheme had “never worked properly” and was widely viewed as a failure.
The scrapping of the scheme means that all foreign nationals from outside the EU and the EEA seeking to work in Denmark must be sponsored by an employer.
When contacted by Bloomberg BNA June 13, HR attorneys agreed that both measures were likely to have some negative consequences for employers by raising foreign employees’ salary levels and reducing the available labor pool.
“With the abolition of the green card scheme, one of the access roads for highly skilled foreign workers has been closed,” Baldus told Bloomberg BNA. “However, there are still a number of methods that foreigners can use to apply for a residency and work permit in Denmark.”
Employers would still have the right to sponsor foreign workers to take up skilled positions, Baldus pointed out, although under the new rules, non EU/EEA employees must receive an annual salary of at least 400,000 kroner ($60,000) rather than the previous 375,000 kroner ($57,000).
“The increase in the threshold could potentially mean that fewer will use the system,” Baldus said. “Currently, however, it is largely used by specialized employees who earn more than 400,000 kroner per year.”
Under the new rules, Baldus pointed out, the threshold could be adjusted annually to allow for inflation, which may require that some employers adjust salaries accordingly.
The previous threshold was not linked to price or wage increases.
According to Granhoj, scrapping the green card scheme would not have a direct impact on employers since it was geared towards individual workers, and the new salary threshold would only affect existing foreign employees if they changed their employer or terms of work.
“The old pay limit of 375,000 kroner per year will continue to apply if existing employment is extended and subject to the same employment terms,” Granhoj said in a June 14 statement. “However, if employers want to attract additional foreign workers to Denmark, they must comply with the new pay limit.”
While the threshold hike has been criticized by the main employers' association, Granhoj said, it has received a more favorable reception from labor unions that supported filling as many vacancies as possible with Danish nationals.
“From an employer's perspective, the changes are certainly negative as they will increase the minimum annual salary floor and have a direct impact on many skilled labor positions,” Granhoj said. “It is obviously too early to tell, but overall it is not foreseen that the new pay limit scheme will lead to fewer applications for work permits in Denmark.”
The new rules will have no impact on green card or employment applications submitted before June 10, and existing green card and residence permit holders will be able to extend their stay in accordance with the previous rules. The amendments only apply to new applications for residence and work permits submitted after June 10.
To contact the reporter on this story: Marcus Hoy in Copenhagen at email@example.com
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The amendments to the Danish Aliens Act (134/2002) are available in Danish here.
For more information on Danish HR law and regulation, see the Denmark primer.
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