Proposal would increase Pay Limit Scheme salaries, cancel Green Card scheme

IMPACT – MEDIUM

What is the change? Denmark’s political parties have proposed changes to immigration laws that would affect high-skilled foreign workers.

What does the change mean? Under the proposed changes, the annual minimum salary under the Pay Limit Scheme would be raised to 400,000 kroner (about US$61,000), an increase from the current 375,000 kroner. The Green Card scheme would also be eliminated due to ineffectiveness.

• Implementation time frame: The proposal has not been approved and is facing some government opposition. If it passes, it could take effect this summer or later.
• Visas/permits affected: Pay Limit Scheme and Green Card Scheme.
• Who is affected: Companies using the schemes to employ non-EU workers in Denmark.
• Business impact: The increase in Pay Limit Scheme salaries would raise the costs of hiring workers under this route. The elimination of the Green Card Scheme would require foreign nationals to be sponsored by an employer rather than allowing them to obtain a work and residence permit solely based on their qualifications.
• Next steps: BAL is following the proposed changes and will report on their progress.

Background: The changes have been proposed by the Danish People’s Party, the Socialist People’s Party and the Socialist Democrats, who together constitute a large majority of the Danish Parliament.

Under the proposal, the gross minimum salary for highly qualified foreign employees in the Pay Limit Scheme would increase to 400,000 kroner per year, up from the current threshold of 375,000. The salary may include accommodations and other allowances, but 50 percent of the salary must be paid in cash to employees.

The other proposal is to eliminate the Green Card scheme, which allows highly qualified foreign nationals to apply for residence and work permits without employer sponsorship for the purpose of seeking employment in Denmark. The reasons for the proposed elimination is that green card holders have not been successful in finding employment in their sectors and instead have taken up low-skilled jobs.

BAL Analysis: The changes, if adopted, would impact corporate budgets for employers using the Pay Limit scheme to employ high-skilled non-EU employees in Denmark.

This alert has been provided by the BAL Global Practice group and our network provider located in Denmark. For additional information, please contact your BAL attorney.

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