Employers can now apply for wage compensation
27 March 2020
Latest update 28 April 2020.
The specific rules for payment of wage compensation for employees who have been asked to stay home have now been published. The state will cover 75% of the wages for white-collar employees and 90% for employees on hourly wages if the employer continues to pay the usual wages during the stay-at-home period and does not lay employees off.
There is now access to apply for wage compensation for employees asked to stay home, and there is no reason to hesitate. Especially as it is possible to apply for compensation for the entire period (09/03-08/07) as one. And only very little information is required to begin with. Following the period will come a time of submitting more detailed documentation for having satisfied the conditions. If at that time it becomes evident that the company was actually entitled to greater compensation, the difference will be paid. If it turns out that too much was paid, the money will have to be returned.
Who can apply for compensation?
All private businesses can. It does not matter if it is a sole tradership or a business run via a company format (IVS, ApS, A/S). Compensation for wages for a main shareholder who owns more than 25% or is CEO cannot be applied for, however.
What are the conditions for compensation?
That the companies ask the employees to stay at home rather than laying them off and that those staying at home constitute at least 30% of the total number of employees or more than 50 employees.
- The scheme also applies to the smallest businesses. A business with two employees which asks one of them to stay at home can apply for compensation for this employee.
- It does not matter whether they are in full-time or part-time employment. A company with five full-time employees and five part-time employees can therefore apply for compensation if three of the employees are asked to stay home, regardless of whether they are full-time or part-time employees.
- Employees may not work during the period when they are staying home. The prohibition against working does not apply to trainees and apprentices, however. Wage compensation can, therefore, be applied for these employees even if they continue to work, just as they can be included in the requirement of at least 30% being asked to stay at home.
- The condition that no employees must be laid off means that it is not possible to select a combination in which some employees are laid off while others are sent home with normal wages.
- The employees who are asked to stay home must use a total of five holiday and/or leave in lieu days in relation to the compensation period.
What is the scope of the compensation?
Application can be made for 75% of the wages of white-collar workers and for 90% of the wages of all other employees staying home. In both cases, the wages also include pension contributions.
- For white-collar workers, the compensation cannot exceed DKK 30,000 per month per full-time employee. This equals 75% of a gross salary of DKK 40,000.
- For employees paid by the hour and for trainees and apprentices, the compensation cannot exceed DKK 30,000 per month per full-time employee. This equals 90% of a gross salary of DKK 33,333.
- Compensation cannot be applied for for those days during the period on which the employees are taking leave in lieu or holiday.
We can help you
At BDO, we are fully informed about the regulations for Covid-19-related support packages, meaning that we are not just able to answer your questions, we can also help you fill in the application form and with submitting the required documentation when the time comes.