Majority behind ”summer package”

A large majority of the parliamentary parties agree on the implementation of a summer package and a phasing out of the aid packages implemented to help Danish companies through the closure that followed Covid-19 and which continues to affect a large number of companies.

On 15 June 2020, the government and the majority of the parliamentary parties agreed to phase out the adopted aid packages and implement the “summer package”, a stimulus package aimed at restoring the Danish economy. Below we set out the main measures agreed upon by the parties.

Compensation for fixed costs

The fixed cost compensation scheme will expire on 8 July 2020. However, a temporary compensation scheme will be established for a reference period of 9 July 2020 through to 31 August 2020 for companies that continue to be subject to the following Covid-19 restrictions:

(i) Prohibition on opening

(ii) The prohibition on opening is lifted from 8 June 2020 onwards for most companies

(iii) Assembly ban of over 500 people

(iv) Border closures

(v) Ministry of Foreign Affairs travel advice.

Companies that are completely prohibited from opening will be able to receive compensation equal to 100% of the fixed costs during the period in which the ban applies, provided that the company has no revenue during the period. Other companies will be able to receive compensation of between 25 and 80% of their fixed costs. In this context, it is a requirement that turnover must have decreased by at least 35% during the reference period in order to receive compensation.

 Suspension of G-days

The temporary suspension of companies’ payment of unemployment benefit for the 1st and 2nd unemployment days (g-days) where employees have been sent home on the wage compensation scheme or have had hours reduced will continue until 31 August 2020, after which it will cease. Thus, companies do not have to pay g-days in connection with reducing hours or asking employees to stay at home during the period from 1 July to 31 August 2020.

Advance payment of holiday allowance

In connection with the transition to the new Holiday Act, the 25-days holiday which employees earn in the period from 1 September 2019 to 31 August 2020 were due to be ” frozen “, meaning that employees would not receive any payment for these holidays until they left the labor market, for example at the age of retirement or by permanent emigration abroad.

However, as part of the “summer package”, there will be a one-off payment of the frozen holiday funds (up to 3 weeks holiday) to be paid in October 2020 to all employees.

The specific implementation of the “summer package”, including whether the state – and not the companies – should initially pay the frozen holiday funds, has not yet been determined. This will be agreed between the social partners and ATP, and it is expected emergency legislation will be adopted in this regard.

Prevention of fraud with compensation schemes

Parliament has also passed a law to help prevent fraud in respect of the salary compensation scheme. The new law means that employees and others can report suspected fraud in respect of the salary compensation scheme to the Danish Business Authority. The intention is that reporting can be done anonymously. However, in order to make a report to the Danish Business Authority it is necessary to log in with Nemid, therefore any such report is arguably not anonymous. However, the employees of the Danish Business Authority are subject to a special duty of confidentiality in connection with the law. In addition, the law also prohibits the sanctioning of employees who have made use of the whistle-blower scheme. If the employee is subject to penalties, e.g. dismissal as a result of the report, the employee can be awarded compensation.