Agreement on a simpler employment system (2018)
In August 2018, the government and political parties made an agreement that simplifies the employment system and removes bureaucracy.
A high amount of rules and rigid process requirements for the municipalities has previously complicated the employment system and driven focus away from what best helps the unemployed citizens in finding jobs. Therefore, the government and political parties (Socialdemokratiet, Dansk Folkeparti, Det Radikale Venstre and Socialistisk Folkeparti) has made an agreement that simplifies the employment system and removes bureaucracy.
The agreement is implemented through legislation in the new sessional year, in order for most initiatives to enter into force on July 1st 2019.
The agreement entails that:
- Municipalities and unemployment insurance funds will have more freedom to plan measures that can be offered to the particular citizen. In the future, there will be simpler minimal rules across target groups. Beyond this, measures will be offered based on the citizen in question.
- Unemployed citizens will be met with fair requirements, understandable rules and will no longer be met with rigid demands regarding job-seeking. Furthermore, a number of detailed demands regarding the interviews between the job centre and the unemployed will be removed.
- Businesses no longer need to fill out a number of time-consuming registrations when applying for wage subsidy and practical work training.
The agreement removes bureaucracy and simplifies the rules for unemployed
The employment system needs to ensure that Denmark has a well-functioning labour market where unemployment is low and businesses receive the labour that they need. It has to be beneficial both for citizens, businesses and society as a whole. The government and the political parties recognize that we have a good starting point for providing this. However, they agree that a complex law with much process regulation should not stand in the way of an effective employment system. Thus, the parties behind the agreement have decided to simplify the employment system. The agreement aims to accommodate citizens with fair requirements and to release necessary recourses in municipalities and unemployment insurance funds. The purpose of this is to effectively help unemployed citizens enter the labour market.
The basic elements of the agreement are:
- Little and simplified regulation
- Similar rules across target groups
- More digital solutions
- Focus on the results of municipalities through benchmarking.
The agreement is implying a higher degree of freedom for municipalities in planning support for unemployed citizens. In the future, minimum rules will be established across target groups, for the purpose of enabling municipalities to plan the action that best fits the individual. Some unemployed may solely need to focus on finding jobs, while others for instance may need an internship or a short training programme early in the unemployment period.
The political parties agree that the freedom of the municipalities should be monitored. There will be consequences if the municipalities do not provide adequate actions to the unemployed. The government may interfere if municipalities do not live up to their responsibilities. As a last resort, the government can place the municipality under administration with fixed requirements for actions.
Unemployed citizens will be met with fair requirements and simpler rules. Among other things this entails:
- If an unemployed person has a got a new job, he or she is no longer obliged to apply for jobs in the last six weeks prior to starting the new job.
- Removing the rule that unemployed has to check Jobnet for job proposals every seventh day, repeals as job applications are documented through Jobblog
- A range of requirements will be removed in relation to the content of the interview between the job centre and the unemployed citizens.
Unemployment insurance funds (a-kasse) and businesses
A part of the agreement entails that a selected number of unemployment insurance funds for four years will be responsible for the contact with citizens receiving unemployment benefits, during the notice period and the first three months of unemployment. The unemployment insurance funds will be required to host an interview regarding CV, one regarding availability and the first common interview. Besides that, further interviews with the unemployed take place according to the estimated necessities. The content of these interviews has to be fit the individual’s situation and needs.
Additionally, businesses will be able to contribute more easily with practical work training and wage subsidies. This takes place with the automatization of more than 180,000 business applications for practical work training and wage subsidies.
Central initiatives in the agreement
- Fewer process requirements and fewer rules for the content in the interviews between job centres and unemployed individuals.
More responsibility to the unemployment insurance funds (a-kasse) in a four-year term.
- Only one requirement for ‘activation’ after no more than six months of unemployment. Hereafter, it the job centres are responsible for evaluating when a citizen needs further action.
- Requirements for job applications are being removed. Unemployed that have got a new job, are retiring or going on maternity leave, no longer need to apply for jobs in the last six weeks prior to this.
- The wage subsidies scheme is simplified and will only have two duration limitations. One for persons close to the labour market and one for persons further from the labour market.
- The practical work training scheme is simplified and the purpose of the training is intensified.
- Simplification of the adult-learning scheme with only three target groups, fewer grant rates and higher subsidy for unemployed in the adult learning scheme.
Businesses’ applications for practical work training and wage subsidies are autotomized.
- A stronger focus on municipalities’ results and monitoring of municipalities with unsatisfactory results.
- A new act on active the employment system is in progress. The new act will be easier to comprehend and easier for the municipalities and unemployment insurance funds to administrate.