When you as an employer are faced with hiring your first employee, there are some considerations you should make. LegalUp has therefore prepared this guide, which aims to facilitate the process for future employers. This guide goes through the different steps that we find important to keep in mind.
Registration as an employer
If you want to hire employees for your company, the first step is to register as an employer. Registration takes place on Virk.dk, where you indicate that you want to report wages and include A-skat, AM-contribution and ATP for your future employees as income. This also applies if you own an ApS, A/S or personally owned company and want to pay wages to yourself.
This only needs to be done once, after which you as a registered employer can continuously hire employees in the company.
If at some point you want to dismiss all your employees and thereby no longer have any employees employed, they must be deregistered. This will prevent SKAT from contacting you about reporting wages and more.
Employment contract
As an employee, you are entitled to an employment contract if you have been employed for more than one month and the average working hours exceed eight hours per week. If the employee’s working hours do not exceed eight hours per week, the employee is not entitled to an employment contract.
The contract must be in writing and should contain information about the company, information about the employee, the position, salary, notice of termination, holiday entitlement and other important terms of the employment relationship.
The employer bears the burden of proof to document that the employment contract has been handed over to the employee. This can be done, for example, by the employer printing two copies of the contract and both parties signing them.
Collective agreement or not?
A collective agreement sets out the rules for the employees’ pay and working conditions. This means that companies that are subject to a collective agreement are obliged to follow the requirements in these areas.
Collective agreements cover, among other things, pensions, holidays, wages, working hours, sick pay, maternity leave and working environment. It can be an advantage for employees to choose a workplace that is subject to a collective agreement, as this protects them in the areas mentioned above, among other things.
Company covered by a collective agreement
Your company can be covered by a collective agreement in the following two ways:
Either you, as an employer, can join an employers’ association that has negotiated a collective agreement that covers your company’s industry.
The other way you can be covered by a collective agreement is that you can sign or join a collective agreement with a trade union yourself, where there is the possibility of joining the terms of one of the national collective agreements.
There is no legal requirement that you, as an employer, must be covered by a collective agreement.
Reporting of wages
When your company pays wages or fees to employees, this must be reported to tax. Tax, AM contributions and any ATP contributions must therefore be deducted from wages, commission compensation, bonuses and a number of employee benefits. A labour market contribution of 8% must also be deducted. In addition, SKAT must also be reported if the company gives gifts, severance pay and anniversary bonuses that exceed a certain value to its employees. This can be done through several payroll management software systems.
Employees’ wages must be reported and paid every month.
Statutory insurance
As an employer, you are obliged to take out the following statutory insurance:
Workplace injury insurance
Workplace injury insurance is mandatory if you have employees in your company. The purpose of this is to ensure that all employees or their survivors are compensated for accidents or illnesses caused by work or the conditions under which they work.
Workers’ compensation insurance also covers damages that can or must be expected to occur within the injured party’s area of work.
Occupational disease insurance
The Danish Labor Market’s Occupational Disease Insurance is mandatory for all Danish companies, both private and public employers. The purpose of this insurance is to cover and pay compensation for recognized occupational diseases. This Occupational Disease Insurance should not be confused with Workers’ Compensation Insurance, as these two insurances cannot replace each other, but only supplement each other.
Liability insurance (vehicles)
As an employer, you are obliged to take out liability insurance for both registered and unregistered vehicles.
Building fire insurance
This insurance is mandatory if there is debt in the property. Building fire insurance is also important if the company itself owns the buildings from which business is conducted. It protects you against lightning strikes, fire, explosion.
In addition to the building itself, the insurance covers accessories that only relate to the operation of the building.
Liability insurance (
