If your employer wants to reduce your working hours

If your employer has a downturn in business, you may be asked to work part-time for a reduced salary - or to accept a pay cut without a reduction of your working hours. 

In this FAQ, you can learn more about what you should be aware of. However, you should always contact IDA's legal counsellors of your employer wants to change your salary and terms of employment.

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When should you be notified of a reduction of your hours and salary?

Changes to your salary and working hours, regardless of their scope, are always considered significant changes to your job description, and as such, you are entitled to fair warning in accordance with the conditions stated in your contract.

However, your employer may want you to accept these changes immediately in order to protect their liquidity.

Before you accept any change to your salary or working hours, you should contact IDA's legal advisers, as such a change may have significant implications for your financial situation. 

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In addition to the above, you should always contact your unemployment insurance fund (A-kassen) because an agreement to work fewer hours for less pay will often affect your entitlement to unemployment benefits and your entitlement to voluntary early retirement pay.

In some cases, you can get supplemental unemployment benefits paid out when you have to work less. 

Read more at Akademikernes A-kasse

Can I be made redundant if I refuse?

If your employer terminates your employment because you have said no to working less for less pay, then this may be in conflict with the Part Time Act.

However, if you are terminated because you refuse to accept a reduction of hours and salary in a situation where your employer is hemorrhaging financially and is asking the same of all the other employees, then this is probably a justified termination.

Can I negotiate with my employer if I am being asked for work less for less pay?

If your employer is struggling financially, this is rarely the time to negotiate the terms you are offered. Furthermore, you are not protected from termination in the period you work part-time.

Therefore you should consider whether it might be a better idea to make a severance agreement and find a new job. 

Before you agree to an agreement about reduced hours, you should always contact IDA's legal advisers and your unemployment insurance fund to learn about the consequences if you accept.

Keep an eye on the following terms in your new contract

If you are going to accept a reduction in hours and pay, you should at least try to include the following points in your new employment contract. Also, always contact IDA's legal counselling before signing a new contract.

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• Your tasks: Make sure to agree that you give up part of your tasks. If you have to solve the same number of tasks in less time, you stand a risk of being overloaded.
• Time limit: Any agreement to work fewer hours for less pay should always be temporary, for instance for 6 months. Your agreement should state that when the period expires, you return to your previous salary and terms - unless you and your employer agree to extend the part-time agreement. The agreement to work part-time for less pay should drawn up as a temporary addendum to your employment contract.
• Notice period: It's important that you agree that you can increase your hours and salary during a possible notice period so that you are guaranteed full salary during the notice period and that any severance pay is calculated based on your full salary.
• Salary: Your new salary will often be reduced in accordance with your new working hours. If you make DKK 37,000 each month and start working 30 hours per week, your salary would be DKK 30,000. This should be stated in your new contract. 
• Pension: You can try to retain the level of your pension contribution even though your basic salary is reduced. The consequences for your pension are less visible, but if you work part-time for a longer period of time, it may cost you a significant amount in pension savings. 
• Working hours: The agreement should include provisions regarding your new working hours, including when and for how long you should work every day. Will you, for instance, take one or more days off each week or work fewer hours per day.
• Other employment: In some situations, it can also be a good idea to include in your contract that you have the right to take on a side job during the hours when you have reduced time, so that you have the opportunity to earn money either in another part-time job or as an independent consultant. If necessary, it must also be agreed whether you may take up work within the industry in relation to your duty of loyalty.
• Bonus: If you have a bonus scheme, it can be difficult to fulfill the conditions for earning your bonus. If your bonus goal depends on your own performance, it should be adjusted as you work less so that you still have the opportunity to reach it.
• Overtime: Regardless of which terms you have in your full-time position for payment for overtime work or whether you are on a fixed salary (jobløn), it will also be an advantage if you agree that overtime can either be taken as days off or paid out as salary, so that you do not risk actually working a full-time position on a part-time salary.

Checklist: What your employment contract should include