Arbeitslosenversicherung für freie Journalisten in Dänemark

Situation in Dänemark

Danish Union of Journalists

27 January 2006

A short summary of the Danish unemployment insurance rules for freelances

In Denmark we have a system of unemployment insurance which is partly financed as a private insurance paid by the wage-earner and partly financed by the state (the state pays by far the most). This insurance is available for both wage-earners and independent contractors but on different conditions. It covers wage-earners registered as (full time or part-time) workers (including certain freelances) and independent contractors (self-employed) (including certain freelances).

In short the people who call themselves freelances by tradition may be working as wage-earners or as independent contractors and both groups can benefit from the unemployment system.

Some freelances are considered to be wage-earners others to be independent contractors

As the rules are very different it is important to be able to identify when a freelance journalist or photographer will be defined as a wage-earner or an independent contractor according to the various relevant social, tax and labour regulations – among them the rules regarding the right of receiving redundancy pay from the unemployment insurance system.

See the annex to this document for a number of indicators of when you are likely to be defined as a wage-earner freelance and when you are likely to be defined as an independent contractor freelance. In general the absence of an employment contract and a registration to pay VAT will be two very strong indicators of you being an independent contractor while proof that you are being taxed as a wage-earner and have an employment contract will be very strong indication of you being a wage-earner freelance.

The basic rights of wage-earners (including certain freelances)

As soon as you have finished your education or have gotten a job as a wage earner, you can become a member of the unemployment insurance organisation which is relevant for your field of work. You will be able to receive redundancy payment as a full time worker if you have had 1.924 hours of work in the previous 3 years. In order to receive redundancy payment you have to be available for a job (there are a lot of complicated rules for this). You can also be insured as a part time worker. In that case you need to have had 1.258 hours of work in the previous 3 years in order to receive redundancy payment.

If you are defined as a wage-earner freelance you are fully covered by these rules and are also able to receive supplementary redundancy pay. (There are a lot of strict rules that have to be observed). The monthly redundancy pay for a full time worker is approximately 1.820 Euros per month. The monthly insurance payment is around 50 Euros a month.

You can to some extent work part time for your own company and still be defined as a wage-earner freelance. The working hours you put into your company will be subtracted from your redundancy payment and you have to be available for a full time job.

The basic rights of independent contractors (including certain freelances)

In order to qualify for membership of the unemployment insurance for independent contractors you have to work as an independent contractor as your main source of work. You have to be able to document that you have had a substantial amount of this type of work, which means that you must have worked as an independent contractor at least 30 hours per week in 52 weeks during the previous 3 years. And you must have been a member of the employment insurance for the whole period.

In order to receive redundancy pay as a full time independent contractor you have to have ended your business as an independent contractor completely. It means that all values in the company must be sold, all leases be ended etc. If this is the case, then you have the right to receive redundancy pay on the same conditions as wage-earner members. The maximum rate is approximately 1.820 Euros per month, but it may be less as the rate is calculated on the basis of the profits or losses in the company in the 5 previous years (you are allowed to pick the two best of the 5 years as your basis).

Work as independent contractor along side with receiving redundancy pay

There are certain strict rules that allow you to take a singular job as an independent contractor along side with receiving redundancy pay. The reasoning behind this is that it is important to give an incentive for coming back into the work circle. On the other hand redundancy pay must never turn into a state subsidiary for private business.

The practical experience of the Journalist sector of the unemployment insurance organisation

In general the Unemployment insurance-organisation of journalists in Denmark has very good experiences with the unemployment insurance system for both types of freelances.

The difficulties arise especially in connection with defining to which group a freelance journalist, photographer or other media worker belongs. As you can learn from reading the annex this is quite a complicated matter. The Danish Union (in co-operation with other unions) is trying hard to make government bodies realise that it must be made simpler.

It can also be quite hard to decide when a job as independent contractor (while the freelance is receiving redundancy pay) can overstep the line and become a state subsidiary for a private business enterprise.

Anne Louise Schelin

Legal consultant of the Danish Union of Journalists

Annex 1. Characteristics of wage-earner freelances and independent contractors

In Denmark you will normally be considered to a wage-earner freelance if

You are taxed according to the rules for wage-earners
You have a contract according to the law on wage-earner contracts
You are obliged to perform the work agreed upon
You have to do the work yourself and cannot hire someone else to do it for you
You are under the supervision (instruction) of the employer
You have regular work hours, receive a regular set weekly or monthly wage
You have an agreed period of notice (before you can be fired)
You do the work in the name of the employer
The employer is responsible (takes the full risk) for the quality of the work
You have the right to save up holiday pay and extra holiday payment (according to law)
You have the right to be paid either by the employer or by state insurance during sickness
If various labour law payments (obligatory pension etc.) are paid by the employer
If you are entitled to reimbursement of your wages if the company you work for goes bankrupt (payment from special guarantee fund)
If you normally only are able to have one employer

You will normally be considered to be an independent contractor (freelance) if

You are registered to pay VAT
You are taxed according to the rules for independent contractors
You carry out the work under your own name
You carry the economic and other risks (quality etc.) yourself
You send a bill (and set the price yourself)
You are paid in accordance with the results you achieve
Do the work on your own premises (from home or in an office/workplace of your own)
You are yourself responsible for getting your payment
You buy various materials necessary to perform the work yourself
You are not under a personal obligation to work
You are not covered by rules of notice
You can chose your own work methods and how many hours you wish to work
You can chose to work for as many employers (task givers) as you wish
If you characterize yourself as an independent contractor in advertisements etc.
If you have chosen to use the tax rules for independent contractors.