On 30 April 2019, the Danish Government passed parts of the bill tabled by the Minister for Immigration and Integration earlier this year with a view to realising the Government's 21 initiatives for strengthening recruitment of foreign employees. The parts of the bill that have been passed will come into force as early as 1 June 2019, among other things, making it even easier for Danish companies to obtain and retain a certification under the Fast Track Scheme and helping companies to avoid illegal employment of foreign employees.
On 5 February 2019, the Minister for Immigration and Integration tabled a bill on realisation of the Government's proposal from October 2018 which contained 21 initiatives for strengthened recruitment of foreign employees, etc.
The bill, which was subsequently divided into four new bills, among other things, contained a proposal to reduce the Pay Limit Scheme's minimum wage requirement from DKK 426,985.06 (2019 levels) to DKK 350,000 for foreign employees from the so-called top-30 countries, with which Denmark has extensive trading relations. In this connection, it was proposed to remove the requirement that the salary must be paid into a Danish bank account. A proposal was also made to update the Positive List in order to ensure that it will to a higher degree reflect the demand for labour in the labour market and to ease the conditions in the Fast Track Scheme in order to make it easier for companies to obtain and retain certification. We have previously distributed a newsletter on the bill, which may be read here.
Whereas the bills on a Pay Limit Scheme differentiated by country as well as a new and modernised Positive List were not passed, the bill regarding a looser Fast Track Scheme was recently adopted by the Danish Parliament. In connection with the latter, it was also adopted that employers must in future be informed if one of their foreign employees has applied for a residence and work permit unsuccessfully, or if the employee's residence and work permit cannot be renewed, lapses or is revoked by the authorities. Parliament has, however, at the same time increased the level of fines for illegal employment of foreign employees. The changes will take effect on 1 June 2019.
Relaxation of the Fast Track Scheme
The Fast Track Scheme allows certified companies to employ highly skilled foreign employees from outside the EU/EEA swiftly and easily.
The scheme implies, for instance, that companies certified by the Danish Agency for International Recruitment and Integration (SIRI) may hire foreign employees while the Agency is processing the application for a residence and work permit. Consequently, foreign employees having been offered employment with a certified company in Denmark may start working for the company concurrently with their applications for residence and work permits being considered by SIRI.
In order to obtain a certification under the Fast Track Scheme, the individual company must, however, meet a number of conditions, including having at least 20 full-time and permanent employees in Denmark, and the company must not have been sanctioned repeatedly or fined in the amount of at least DKK 20,000 for violations of the Danish Aliens Act in the course of the past two years.
If the company fails to comply with the conditions for certification the company may lose its certification and will in such case not be able to re-acquire the certification for a subsequent two-year disqualification period.
As of 1 June 2019, some of these conditions will, however, be changed such that it is in future a requirement that (i) the company has not been sanctioned more than twice in the past year or (ii) the company has not been fined in the amount of at least DKK 60,000, when the company employs fewer than 250 full-time employees or in the amount of at least DKK 100,000, when the company employs 250 full-time employees or more.
However, a proposal to reduce the requirement for at least 20 full-time and permanent employees to at least 5 full-time and permanent employees was not adopted.
As a new feature, a company will no longer have its certification revoked when the conditions for obtaining the certification are no longer complied with if the company is able to substantiate that excusable circumstances exist, and the company has not previously been sanctioned for violations of the Danish Aliens Act. In the explanatory notes for the bill the fact that a company has incurred a sanction due to simple negligence is described as constituting an excusable circumstance. However, it will in all cases depend on a specific assessment whether a certification is to be revoked as a consequence of the conditions for such certification no longer being complied with.
Finally, the disqualification period will be changed from two years to one year, such that companies having had their certification revoked will be able to re-acquire it after only one year.
Information to Employers about Matters of Importance for the Legality of the Employment
The adopted bill also means that employers will in future to a higher degree receive help to avoid illegal employment of foreign employees. From 1 June 2019, employers will thus receive information from the Danish Immigration Service and the Danish Agency for International Recruitment and Integration if one of their employees has been unsuccessful in an application for residence permit or an extension thereof, or if the foreign employee's residence permit has lapsed or been revoked. In such situations, information will be disclosed without the consent of the foreign employee.
Information will, however, only be disclosed in respect of foreign employees having been in the employment of the employer in question within the past three months, and will not extend to cases where the work and residence permit is no longer valid due to termination of the employment or because the maximum duration of the residence permit of four years has expired.
The object of the amendment is to help companies avoid unintentionally violating the Danish Aliens Act when employing foreign employees.
Increased level of fines
Employers employing foreign employees without the required work permits or without complying with the applicable conditions for work permits risk being punished by a fine or imprisonment for up to two years.
In the assessment of the penalty it is today an aggravating circumstance if the violation was intentional or if the violation has resulted in or was intended to result in a financial advantage for the employer, or if the foreign employee was not allowed to reside in Denmark.
With the adoption of the bill, the level of fines is increased such that in the assessment of the penalty for employment of foreign employees without the required work permit or without complying with the conditions for work permits, it will now be included as an aggravating circumstance if the violation is a result of gross negligence.
According to the preparatory works of the act it is considered gross negligence if the employer exhibits reproachable behaviour. It must thus be blamed on the employer that the employer has remained passive and that for this reason there have been circumstances which could and should have been avoided, e.g. by the employer being more vigilant, more prudent or having taken the initiative to procure information.
Comments by Bech-Bruun
The adopted bills designed to strengthen recruitment of foreign employees must be expected to be highly important to the companies that are already certified according to the fast track scheme, as these companies no longer risk having their certification revoked due to minor mistakes. It must also be expected that more companies will in future be allowed to retain their Fast Track certifications in connection with minor violations of the Danish business immigration regime.
Furthermore, it must be expected that the Danish courts as a consequence of the changed conditions for obtaining the certification will in future increase the level of fines in practice for illegal employment of foreign employees. This is due to the fact that the courts currently seem to apply a certain level of pragmatism when assessing the size of fines in individual cases. In some cases, the Danish courts have taken into account the consequences for the employer of being fined DKK 20,000 or more and as a consequence – according to the currently applicable rules – running the risk of losing the company’s Fast Track certification.
To the extent the Danish courts continue this trend it must accordingly be expected that the condition according to which a company must not within the past year have been punished by a fine of at least DKK 60,000 or DKK 100,000 depending on the size of the company will result in a higher level of fines in cases to be decided.