Danish coalition to cut work permit salary floor to ease labour shortages
Denmark is lowering the income threshold for foreign workers from 16 non-EU countries, offering businesses a targeted tool to fill lower-wage jobs amid a looming demographic crunch.
Denmark's new coalition government will lower the salary threshold for work permits aimed at workers from 16 non-EU countries. The initiative is part of a broader package of 17 laws the government intends to pass before parliament reconvenes in October.
Under the Pay Limit scheme, the minimum required salary would fall from 552,000 kroner to 322,000 kroner annually. By dropping the monthly floor from 46,000 kroner to just under 27,000 kroner, the policy opens lower-paying sectors to international recruitment that previously could not afford to hire from abroad.
To prevent social dumping, companies must sign a collective bargaining agreement with a trade union to utilise the scheme, provided they do not already have one. This mechanism is designed to ensure foreign hires are not brought in on working conditions inferior to those of Danish staff.
The legislation was originally drafted by the previous administration but stalled when Prime Minister Mette Frederiksen called a March election. It has since been renegotiated to secure backing from the new coalition, which includes the Social Liberals and the Green Left alongside the Moderates, Social Democrats and Liberals.
Business leaders view the change as a necessary, if modest, adjustment to the country's labour market. The policy is projected to attract 550 additional migrant workers annually by 2030. While a small proportion of the more than 400,000 people who already comprise Denmark's foreign workforce, it provides a specific channel for hard-to-fill roles.
A demographic warning
Employer organisations argue the measure reflects a wider European challenge. "We need to address the fact that we're about to meet a major demographic headwind, which won't just hit Denmark but also the rest of the EU," Morten Langager, CEO of Dansk Erhverv, told the Ritzau newswire.
Søren Kryhlmand, deputy CEO of Dansk Industry, highlighted the balance the proposal strikes. "This proposal is a crucial step which shows we can meet companies' need for labour, while we are also protecting Danish salary and working conditions and the Danish model," he said.
The 16 eligible nations outside the bloc include the United States, the United Kingdom, Japan, China, India, Brazil and Ukraine. Citizens of EU countries already have the right to work in Denmark without a permit, meaning this adjustment specifically targets labour from further afield.
