Together with our partner LegalHero, Qred has taken the initiative to find more ways to help our customers. Read here what LegalHero writes about when you should consider hiring.
Hiring the first employee
If you run a business, you'll probably find yourself in the position of hiring an employee at some point. Hiring your first employee is a big step, with new administrative and legal duties on the horizon. New employees mean new obligations. Below is a guide to the considerations you as an employer can make when hiring one or more new employees.
How do I find the right employee?
It's a good idea to know both your own skills and the company's skills when looking for your first employee. Of course, it would be obvious to look at the tasks that need to be solved and look for employees who fit these needs so that the employee will be successful in the position. However, professional skills are not always enough, and you should also consider the personal skills of the future employee in order for a future collaboration to work.
As an employer, it will also be rewarding to learn about the industry to understand what skills you need in the long term and what tasks are on the horizon.
If you have a network within your industry, you can take advantage of it to find or apply for a future employee. In addition, you can post a job advertisement on various job portals to attract potential candidates with the relevant skills. When posting a job advertisement, be aware that you must not violate the laws on equal treatment and discrimination and keep track of the storage of applications/CVs in accordance with the Personal Data Act.
As soon as the application deadline has passed, it's a good idea to have a skills profile in mind so you know what you're looking for. Again, it's important not to be too professionally oriented, as you also need to have a good chemistry between you.
If you find it relevant and useful as an employer, you can make use of a personality test. The test can give an indication of where the candidate is in terms of personality, strengths and weaknesses.
To make it easier as an employer, you can write down the most important things the new employee needs to be aware of in advance. This can act as a sort of employee reference book that the new employee can lean on for the first few days.
Employment contract and payslip
Once you've found your new employee, you'll need to draw up an employment contract. The contract must be drawn up for employees who are employed for more than one month and have an average working time of more than eight hours. The contract aims to describe the specific terms of their employment and must be signed by both parties no later than one month after the employee has started. Once both parties have signed, it is the employer's responsibility to document that the employee has received the contract. Typically, this will be done by signing two copies of the contract, with the employee keeping one.
When you own and run a business, you need to pay wages to your employees and yourself. Typically, the payslip will contain sufficient information for the employee to have a full understanding of their salary. However, salary information can vary depending on the employment relationship. For example, the content may be as follows:
- Employer's name, address and company registration number.
- Employee's name, address and social security number and possibly an employee number
- Pay period
- Gross salary (salary before tax)
- A tax withheld
- Contained am contribution
- Number of paid hours
- Pension contributions - including ATP
- Net salary (salary after tax)
- Tax card and deduction percentage information
- Vacation pay
- Any other conditions, e.g. free phone or paid lunch
- Available date
- Tax card (deductions and deduction percentage)
- A-income before am contribution (current period and year)
- Withholding tax withheld (current period and year)
As an employer, you need the employee's tax card for payroll purposes. The tax card is part of the employee's advance statement and can be retrieved via SKAT or the company's payroll service agency. Reporting of the salary can also be done through SKAT.
What type of employment?
There are different ways to hire employees and in which positions. Most people in Denmark are employed in a full-time, 37-hour position with a monthly salary. However, there are also other types of employment. For example, part-time, hourly, fixed-term, etc. If the employee performs salaried work for more than 8 hours on average per week, the employee is covered by the Salaried Employee Act. As an employer, you need to draw up a contract that matches the type of employment to make sure you comply with all relevant regulations.
Collective agreement or not?
The vast majority of employees in Denmark are covered by a collective agreement. Collective agreements set the rules for, among other things, the employee's pay and working conditions. Companies that are subject to collective agreements are obliged to follow the requirements laid down in the agreement. This can be anything from wages, vacation, working hours, maternity leave, etc. There is no direct and legal requirement for a company to be covered by a collective agreement.
What else should I be aware of as an employer?
- Workers' compensation insurance, which is a statutory insurance that covers the employee in case of injury while working.
- Holiday pay: The holiday pay is 12.5% of your employee's holiday-eligible salary. Payment is made via FerieKonto or another approved holiday scheme.
- Follow the applicable collective agreement, if there is one
- Register as an employer on Virk.dk, as it can take up to 14 days to be approved.
- Employee handbook with general guidelines and rules.
- When you have employees, you also need to do a workplace assessment (APV)
How can LegalHero help?
At LegalHero, we can help your company create an employment contract that follows all applicable laws, so you're sure to comply with all regulations.
In this regard, we can help with contracts for different types of employment, including: salaried employment contracts, employment contracts without a collective agreement, employment contracts for hourly employees, fixed-term employment contracts, temporary employment contracts and more.
If you as an employer are unsure whether you are complying and handling all personal data correctly, LegalHero offers a personal data check. Together, you can create an action plan on how to be fully compliant before the rules come into force.