Stricter regulations ahead for foreign workers in Denmark

Over the past decades, Denmark has seen a marked increase in the number of foreign workers temporarily employed in the country. Although such assignments create opportunities for many, they have also raised concerns regarding wage and working conditions.

The government has proposed a bill aimed at implementing a political agreement from earlier in 2024 to intensify efforts against social dumping. This involves significant changes to both the Act on the Posting of Employees, etc. and the Aliens Act.

The proposal will tighten registration requirements for foreign employers who send third-country nationals to Denmark to perform temporary services. This includes additional documentation requirements and stricter identification requirements for posted employees. Additionally, Danish authorities would be granted increased powers to verify the identity of workers.

Key points of the proposal

The proposed bill includes several significant changes, including:

Documentation requirements: Foreign employers will be obligated to upload a series of documents to the Register of Foreign Service Providers (RUT). These documents include contracts, employment agreements, and work permits to verify employees’ conditions and work terms. This documentation requirement aims to ensure transparency and allow for effective monitoring of the conditions under which foreign employees work. The Danish Working Environment Authority and other relevant authorities will have access to these documents via the RUT to verify whether posted employees are working under legal conditions and adhering to all relevant regulations.

Identification requirements: All posted employees must present valid identification to the Working Environment Authority. It will be the responsibility of the foreign employer to ensure that employees can correctly identify themselves. The purpose of this requirement is to ensure that authorities can quickly and efficiently verify whether foreign employees are properly registered in the RUT and authorized to work in Denmark. This means that foreign companies must ensure their employees always carry valid identification, such as passports, driver’s licenses, health cards, as well as visas, ID cards, or residence cards, provided they are issued by a public authority and deemed suitable for identification by the Danish Agency for International Recruitment and Integration (SIRI). This tightening of requirements is a response to authorities’ increased focus on combating social dumping and their need to ensure that posted employees work under legal conditions.

Inspections by SIRI: The Danish Agency for International Recruitment and Integration (SIRI) will be empowered to conduct inspection visits and request identification from employees at companies they visit. This inspection function is particularly important since many posted employees coming from countries outside the EU/EEA require specific residence and work permits to work in Denmark. SIRI will thus receive additional resources to ensure compliance with residence and work conditions. SIRI will determine which employees to request identification from during inspections, enabling them to target their monitoring efforts toward specific employees suspected of not meeting the requirements for residence and employment.

What does this mean for your business?

The implementation of these new requirements will impose increased administrative burdens on foreign employers, who must navigate the new regulations to ensure full compliance. It is essential for companies to prepare for these changes to avoid fines, work stoppages, and other sanctions from the authorities.

Danish companies collaborating with foreign service providers should also be aware of how these changes may impact their operations and partnerships.

When should your company begin preparing for the new regulations?

According to the bill, the changes will take effect on January 1, 2025, although the requirement to upload documents to the RUT is expected to apply from January 1, 2026. It would therefore be prudent to start preparations for the new regulations and processes now.

Companies that employ foreign workers through subcontractors, for example, should also take this opportunity to review their contracts, policies, and general compliance practices. It is crucial to establish clear guidelines on how identification is stored and presented during inspections and to assign responsibilities accordingly.

A proactive approach can save your company from financial and legal consequences, ensuring compliance with the new requirements from the outset.

LES Comments

The proposed bill to tighten requirements for the posting of foreign workers is a step toward ensuring better working conditions and combating social dumping in Denmark. It introduces several new administrative obligations, and it is vital for both foreign and Danish companies to be aware of the upcoming changes to adapt and ensure that employees work legally in Denmark.

If you have questions or need advice on how to prepare your business for the new regulations, contact Partner, Attorney Michael Møller Nielsen, a specialist in foreign workforce regulations in Denmark.