New law changes Pay Limit scheme salaries, Green Card scheme

IMPACT – MEDIUM 

What is the change? Denmark has passed a law that raises minimum salaries under the Pay Limit scheme for high-skilled foreign workers and abolishes the Green Card scheme.

What does the change mean? Beginning June 10, foreign employees applying for new work permits under the Pay Limit scheme must be paid 400,000 kroner (about US$61,000). The Green Card scheme will be eliminated as of June 10.

• Implementation time frame:June 10.
• Visas/permits affected:Work and residence permits under the Pay Limit scheme and Green Card scheme.
• Who is affected:Companies using the schemes to employ non-EU workers in Denmark.
• Business impact:The higher Pay Limit scheme minimum salaries will raise the costs of hiring workers under this route. The elimination of the Green Card scheme means that foreign nationals must be sponsored by an employer rather than qualifying for work and residence permits based solely on their qualifications.
• Next steps:Employers should budget for the salary increases and adjust salaries accordingly.

Background: The changes were proposed in April and passed Thursday. Beginning June 10, minimum salaries under the Pay Limit scheme will increase to 400,000 kroner per year (33,333 kroner per month), up from the current threshold of 375,000. The salary may include accommodations and other allowances, but 51 percent of the salary must be paid in cash to employees. The 400,000-kroner salary threshold will be adjusted annually for inflation.

Work permit extensions of current salaries may be approved even after June 10 if all employment terms are the same.

Also beginning June 10, the Green Card scheme will be eliminated due to ineffectiveness. However, existing Green Card holders may continue to apply for extensions even after June 10 and accompanying family members of Green Card holders may also continue to apply for residence permits.

BAL Analysis: The changes will 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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