Publiceret: 21.06.2017Af Laura Flader mail
Not only did the job applicant for a position at Niebuhr Gears have a recommendation from his former employer in Denmark. He also had a Danish personal registration number and paid both taxes and pension.
Gear manufacturer Niebuhr Gears therefore hired the man in 2010. Until then, the company had employed foreigners from various countries without any trouble.
The new employment also went well. Right until the financial crisis hit, and the company had to let go of the employee, who had moved to Denmark from Russia in 1999.
“He had previously been employed at company from which we had obtained references for him. There was nothing that made him seem suspicious. We had no idea. It wasn’t until he stopped that we received a huge fine,” says Rasmus Niebuhr, CEO, Niebuhr Gears.
The fine amounted to 430,000 DKK.
Niebuhr Gears is far from the only Danish company that has unwittingly employed illegal workers. The problem is that it is not always easy to determine whether an applicant is residing in Denmark illegally, but it is the employer’s responsibility to ensure that they do not employ illegal workers. And if this happens, it can have major consequences.
“The fines are quite severe, so it does have a financial impact. But it can also mean that companies lose their fast track certification, and thereby have a harder time bringing in workers from abroad in the future,” says Director Steen Nielsen, the Confederation of Danish Industry.
The employer risks imprisonment for up to two years or fines up to 20,000 DKK per month or part of month for each person who has been employed illegally.
Read more about employment of foreign workers
Danish companies may unwittingly pay wages and taxes for employees for years, even though authorities are aware that they are working illegally.
“There’s nobody letting the company know that there’s an issue. Even though an employee has lost their work and residence permit, a company is able to continue paying wages that are taxed without the Danish Tax Authority letting the company know that the work permit is invalid,” says Steen Nielsen.
Even if the job applicant presents a work permit upon employment, the company must continuously keep up to date regarding the status of permits.
“The status of residence and work permits can change all the time, and companies are fundamentally lacking information,” says Steen Nielsen.
When companies employ foreign workers, they must therefore make sure to check that the employee has work and residence permits in order. In addition, they must regularly monitor whether changes are made to the permit. Particularly the latter is difficult in terms of administration.
See also: Significantly more refugees entered Danish jobmarket in 2016
The big fine came as a shock at Niebuhr Gears, and the company found it unreasonable.
“I completely agree that you should prevent social dumping, but this made no sense. The authorities had a strange approach to the matter, and they were quite haughty when we contacted them. They said there was nothing to do about it,” says Rasmus Niebuhr.
The company therefore hired an attorney, and the case ended with a settlement in which the company paid a fine of 50,000 DKK.
The company still finds the settlement unfair, since they are not involved in wage dumping, but decided to accept the settlement to avoid spending more time on the trial.
The Confederation of Danish Industry also believes that authorities should do something, because the problem can be solved rather straightforwardly. Today, information about payroll, taxes and work and residence permits are located in different public systems, and by coordinating this data, the problem could be solved.
“It isn’t actually a complicated task to match data via the personal registration number. Based on that, you would be able to create a system that immediately notifies a company if you’ve paid wages to an employee without a work permit,” says Steen Nielsen.
See also: How to avoid employing illegal foreign workers (link to PDF - in Danish)
Avoid hassle and fines
1. Check the employee’s passport: Nationality is evident in the passport.
2. Check their residence permit: It’s important to check that the permit applies to the work that the employee will carry out, that it is issued in Denmark, that the employee is identical with the person on the photo and that start and end dates are valid.
3. Make a colour copy of residence permit and passport: Save as documentation.
4. Stop work when the permit expires: If the employee has not obtained a new work permit prior to expiration of the existing one, the employee must stop working when the work permit expires.
5. Seek active confirmation from the employee: Due to the many schemes and the lacking possibility to check whether a work permit is valid, companies should set up internal checks and processes whereby foreign employees must actively confirm that their work permit is valid.
6. Three months before expiry: Start the process of extending legal authorisation to work in Denmark.
Source: DI Legal Advice
Get help from DI
If your company has questions or needs help in relation to illegal labour, DI is ready to help. Call 3377 3377 or email juradi.dk