Minimum Wage in Denmark - Frequently Asked Questions
Is there a separate legislation relating to minimum wages in Denmark?
There is no legally stipulated minimum wage in Denmark. Pay rates for blue-collar and white-collar workers are set through collective bargaining agreements. More than 65 percent of Danish workers belong to a trade union, and the collective bargaining agreements negotiated by those unions effectively cover 80 to 90 percent of Danish workers. An agreement may set actual pay rates or minimum pay rates at the industry level. The wage rates set under collective agreements vary on the grounds of age (different wage rates for workers over or below the age of 18 years), experience (higher wage for more experienced workers), qualifications or performance and difficulty level of work. Though Denmark has no official minimum wage, the collective agreements often instate a de facto minimum for different types of workers, and are renegotiated ever two or three years.
Do one or more minimum wages exist that is/are determined by law?
The average minimum wage for all private and public sector collective bargaining agreements is approximately DKK 110 ($20) per hour, exclusive of pension benefits. The Danish "minimum wage" of $20 or $21 is actually an average of all minimum wages across a variety of sectors.
At what level is minimum wages determined?
The New Collective Agreement provides different minimum wage rates for adult employees and for employees younger than 18 years old.
On what basis is minimum wage calculated?
The Collective Agreements provides minimum rates of payment per hour or month. The latter is often the case for salaried (white collar) workers.
In case of weekly/monthly minimum age, are they based on any fixed number of hours?
The general daily working hours are 37 hours pr. 5-days week, approx. 7.5 hours per day. This limit may be reduced or extended according to the provisions of a collective agreement.
Are governmental bodies, employer and/or trade union representatives involved in minimum wages setting?
The determination of wages is exclusively left to the social partners to decide through the collective bargaining system.
How are upratings (adjustments) of minimum wage/s decided upon?
Adjustment in minimum wage is jointly done by employer and trade union representative.
Which are the components of minimum wage in Denmark?
There are different types of collective agreed 'minimum-wages’. Generally, they are set at sector level. The wage can be added to with extras at the enterprise level (or public institution level in the public sector).
How frequently is the fixed component of minimum wage updated? --
The sector based CAs on wages are normally renewed every second or third year. The CAs might include increases of the -minimum wages or might include just a general wage-increase - that depends on sector. Although the CAs is only renewed bi/tri annually, they might include different wage-level/wage-increases for the years covered by the CAs.
What is/are the yardstick/s on which minimum wage upratings are based?
In the private sector the competition situation in the sector (that is: subjective measures) in the public sector mainly wage development in the private sector (the so-called regulation mechanism).
How is minimum wages compliance regulated?
Minimum Wage compliance is regulated by Trade Unions and Employer.
Are employer and/or trade union representatives involved in compliance procedures?
The social partner organisations (on all levels) are in the sense that they - and not the state/government - are responsible for compliance.
To whom/Where can individuals complain, if they think they are earning less than minimum wage?
In case of non compliance, individual can complain to employer or trade union coordinates.
Which month of the year is minimum wage rate revised in Denmark?
The sector based CB takes place every second or third year during the month December - February