Coronavirus – increased maximum compensation under the wage compensation scheme

The Danish Government and the social partners have agreed to strengthen the wage compensation scheme for private-sector employers by increasing the maximum compensation amount under the scheme to DKK 30,000 for salaried employees as well as non-salaried employees.

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Last week, the Government enacted the Bill on wage compensation for private-sector employers. Our commentary on the new Act can be read here and our article on the executive order of the Danish Ministry of Industry, Business and Financial Affairs regarding the wage compensation scheme, which e.g. lays down the maximum compensation amount, can be read here. The parties have now made a new agreement to strengthen the wage compensation scheme by increasing the maximum compensation.

With the new agreement, the maximum compensation amount payable to employers will increase from DKK 23,000 per month per full-time salaried employee and DKK 26,000 per month per full-time non-salaried employee, respectively, to DKK 30,000 per full-time employee. Consequently, the maximum compensation amount no longer depends on whether the employee is a salaried or non-salaried employee. The capped percentage rates remain unchanged, which means that the compensation ceiling for a salaried employee is still 75% of the pay, whilst the compensation ceiling for a non-salaried employee remains at 90% of the pay.

The new maximum compensation amount applies retrospectively from 9 March 2020 and throughout the duration of the wage compensation scheme.

According to the information available at virksomhedsguiden.dk, businesses that have already applied for wage compensation need not do anything further, as the Danish Business Authority will automatically apply the increased maximum compensation level when processing applications under the scheme.

The content of the above is not, and should not be a substitute for legal advice.

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