Copenhagen municipality to begin fining suppliers who exploit their employees

The Danish capital’s local government will not stand for any of its contractors breaching the rights of their employees and underpaying them for their work

Copenhagen authorities have announced that they will now collect fines when their suppliers are revealed to underpay their employees. At the same time, it will be a requirement that salary payments must be made digitally so that it can be documented and automatically registered with the tax authorities.

To the benefit of workers

It must hurt your wallet if you, as a supplier to the City of Copenhagen, do not pay your employees the salary to which they are entitled. That is why the capitals’ Citizens' Representation gave the green light for the municipality to tighten its work clause. This means, among other things, that suppliers who cheat with salary payments will in future be met with a claim for a fine corresponding to 50 percent of the underpayment in the case in question.

Mayor Lars Weiss welcomed the fact that the municipality can now use another weapon in the fight against social dumping. "It's a scam when companies speculate in underpayment of employees. We will not accept that here in Copenhagen. That is why I am glad that we now have the opportunity to collect fines that hit those who cheat where it hurts - namely on the wallet. It helps to ensure fair competition for all the companies that play by the rules and are in order,” he stated upon announcing the new policy.

If a supplier is revealed to be underpaying its employees, the City of Copenhagen is already demanding that suppliers pay back the full amount that the employees have to their credit. In 2019, the response team uncovered underpayment of almost DKK 1.5 million. DKK, which was paid back to the employees.

On top of that now comes the requirement for fines, so companies have to pay 50 percent on top of the amount. The new requirement covers all cases where the underpayment corresponds to 15 percent of the employee's total salary or more, and in 2019 it would have cost the companies that cheated with salary, 552,000 kroner extra.

In future, the City of Copenhagen will also require suppliers to make salary payments digitally. It should make it easier to check that the salary payments actually take place and are reported to Tax. In addition, the tightening of the work clause also makes it possible for the municipality to collect fines if a supplier has not taken out occupational injury insurance on its employees.