Introduction 

Expanding internationally brings fresh opportunities - but it also introduces legal complexity, especially when operating across jurisdictions with fundamentally different labour systems. Denmark and the USA are two such examples. While both are highly developed economies, their employment laws differ dramatically in areas like contract security, termination rights, working time, and collective bargaining.

If your company is growing across the Atlantic, understanding these differences is not a ‘nice to have’ - it’s essential for compliance, employee engagement, and avoiding costly missteps. In fact, according to the OECD, misalignment with local labour expectations is one of the top five reasons for early market exits by foreign businesses.

Quick Tips

• At-will employment is common in the US but virtually unheard of in Denmark.

• Danish employers must justify termination and often provide notice periods of 1–6 months.

• Collective agreements cover around 80% of Danish workers - don’t ignore them.

• US laws vary dramatically by state - know your federal vs state obligations.

• Employee benefits are largely private in the US but state-mandated in Denmark.

Job Security: Flexibility vs Protection 

The USA operates on an ‘at-will’ employment model, meaning employers can terminate employment for almost any reason, provided it’s not discriminatory or retaliatory. While this allows for agility, it also creates insecurity for employees - and legal risk if not handled carefully.

Denmark, by contrast, is known for its “flexicurity” model: employers can restructure relatively freely, but only with appropriate notice and compensation. Most employees are covered by collective agreements that stipulate termination rights, severance, and dispute resolution processes.

For businesses operating in both countries, this means contracts and HR procedures must be bespoke. I recently worked with a UK-US-Danish firm to redesign their termination procedures after a Danish employee challenge. By aligning with local norms and collective agreements, we protected their reputation and legal standing.

Working Hours and Overtime 

In the US, the Fair Labor Standards Act (FLSA) governs minimum wage and overtime - typically 1.5x pay after 40 hours per week for non-exempt employees. However, many states have additional rules, and ‘exempt’ status can be misapplied. This is one of the most common sources of litigation.

Denmark has no statutory maximum working hours but adheres to the EU Working Time Directive, which limits working time to 48 hours per week on average. However, most collective agreements offer stronger protections, including overtime pay and minimum rest periods.

For global HR teams, it's critical to track actual hours worked and understand who qualifies for exemptions or entitlements. Systems and policies should reflect not only what’s legal, but what’s culturally expected. A Danish employee clocking 55 hours a week may raise red flags - even if technically legal.

Benefits, Leave and Social Safety Nets 

In Denmark, employees benefit from a strong public safety net: paid parental leave, sickness benefits, unemployment insurance, and state pension contributions are the norm. Many of these are managed by public authorities or unions rather than employers directly.

In the US, the burden often falls on employers. There is no federal requirement for paid parental leave, and healthcare is typically employer-sponsored. This creates a higher administrative load and often greater financial unpredictability for HR teams.

Recently, a US client asked me why their Danish office had lower employee turnover and higher satisfaction scores. Part of the answer was clear: in Denmark, state-backed support schemes reduce stress and improve work-life balance. The takeaway? Benefits matter - and understanding local expectations can help attract and retain top talent.

Real Example: Managing Misclassification Risk Across Borders 

One client hired freelance developers in both the US and Denmark. While the US model allowed for short-term 1099 contractors, Denmark’s rules meant the same individuals were effectively employees. We helped them transition to compliant employment in Denmark, avoiding fines and securing access to tax-advantaged benefits. The result was smoother operations and happier workers.

Final Thoughts 

Labour law isn’t just legal compliance - it’s part of your employee experience. Understanding the cultural, legal, and structural differences between Denmark and the USA will help your business build systems that work for people and performance.

What’s next for your global people strategy? 

Book a free compliance check-in or HR audit with ThinkGlobal HR. Whether you’re navigating cross-border contracts, classifying your team correctly, or building consistent yet compliant global policies, we’re here to help - with real-world insight and practical support.