To simplify workforce expansion in Greenland, discover how the country’s mandatory benefits and perks help you hire talented employees. 

Greenland is the world’s largest island, located between Iceland and Canada, and is known for its impressive arctic landscapes, wildlife, and Inuit culture. In addition to its natural beauty, Greenland’s fishing sector is its main economic driver, contributing to more than 50% of its gross national income. Other industries that offer investment opportunities include tourism and the mining sector recognized for its rare earth minerals, gold, and coal extraction. 

According to the World Bank, Greenland’s GDP per capita reached $57,116 in 2021, and its GDP increased by 1.4% in 2023. Furthermore, Greenland receives a yearly block grant of approximately $511 million from Denmark in support of economic growth and stability. 

To do business in Greenland, you can hire a skilled workforce with a strong ethic and sense of community by following the local labor laws. This includes attracting talented job candidates with mandatory benefits and employment perks to help you secure a competitive workforce. 

Adhering to Greenland labor laws is imperative for successful business expansion because violations will lead to work stoppages, fines, and possible legal action. 

To help you compliantly hire a workforce in Greenland, this guide provides an overview of local labor law, pressing employee benefits, and how you can expand without a legal entity when partnering with a Greenland Employer of Record (EOR). 

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Greenland Employment Laws

The Greenland labor law includes employment contracts, working hours, and creating safe working conditions for employees based on the Working Environment Act. The island has also aligned its personnel legislation with the Danish state to facilitate uniform employment terms. 

Employment contracts

Employment contracts include employment terms, contract termination procedures, and employee benefits in Greenland. The employment contract covers the date of employment, employee duties, salaries, working hours, and personal information. 

When you hire in Greenland, individual employment contracts are signed between the employer and employee; however, collective bargaining agreements are also permitted where the employment terms are negotiated with a bargaining council. 

Termination of Employment 

To move forward with contract termination, employers must give written notice to employees based on the period of ongoing employment. As per the labor law in Greenland, employees who have worked for six months receive one month’s notice, whereas employees who have worked for more than six months but less than three years receive three months’ notice. 

Minimum Wage Law 

Greenland does not have legislation covering minimum wages; however, monthly pay for employees in the private and public sectors is determined through collective bargaining. Employee unions will negotiate salaries based on the job role and industry. 

Social Security Regulations 

The Greenlandic social security system consists of three pension schemes: 

  • Statutory pension
  • Labor market pension
  • Individual pension 

The statutory pension covers retirement and disability pensions and is regulated by the government. The retirement pension falls under the Nordic Convention on Social Security, and one must be a Danish Commonwealth citizen for three years and remain in Greenland for one year. 

The labor market pension pertains to the employment relationship where a percentage of the employee’s wage must be saved towards the fund. 

Individual pensions are private pensions that are purchased through a bank or independent provider. 

Leave Schemes 

All Greenland employees are entitled to annual leave, maternity leave, sick leave, and paternity leave. 

How to maintain compliance with Greenland labor laws

Expanding your business in Greenland means adherence to the Greenland labor laws. Not only does the local employment legislation provide guidelines concerning the relationship between the employer and employee, including the provision of employee benefits, but it also prevents penalties associated with non-compliance. 

To make the process of hiring a workforce and doing business in Greenland easier and more efficient, always seek professional legal counsel. International companies can partner with an EOR in Greenland to move forward with hiring without needing to set up a legal entity. The role of an EOR firm is to keep you compliant with Greenland’s labor requirements while assisting with payroll, employee contracts, onboarding, and establishing a skilled workforce.

Mandatory Employee Benefits in Greenland 

To offer new hires job security while remaining compliant, the employment contract must include mandatory employee benefits in Greenland. These benefits are discussed in detail below: 

Social Security Contributions

Greenland only requires social security contributions by employers and not employees. The employer contribution is 1.1% of the payroll. 

Annual Paid Leave

Greenlandic employees receive five weeks of paid annual leave.

Working Hours

The island does not have standard workweeks, but employees are expected to perform between 37 hours and 40 hours of weekly work.

Overtime Pay

There is no law concerning overtime pay, but any rates for extra working hours are usually negotiated with bargaining councils. 

Employees receive time off for the following public holidays: 

  • January 1, 2025: New Year’s Day

  • April 18, 2025: Good Friday

  • April 21, 2025: Easter Monday

  • May 16, 2025: Prayer Day

  • May 29, 2025: Ascension Day

  • June 8, 2025: Whit Sunday

  • December 25, 2025: Christmas Day

  • December 26, 2025: Boxing Day

Employees receive sick leave for working weekdays but not for public holidays. The compensation for sick leave depends on the sector and the agreements negotiated with unions, but generally, workers are entitled to 26 weeks of leave within one year. 

An unemployment benefit is offered to Greenland employees in case of illness of 13 weeks and is paid from the third day of illness. To qualify for this benefit, you must have completed 182 hours of work in the last 13 weeks and be registered under Greenland’s Population Statistics Register.  

Maternity Leave

Expecting moms are provided 15 weeks of maternity leave after the birth of the child and two weeks before birth. 

Paternity Leave

Fathers are granted three weeks of paternity leave within the first 15 weeks of childbirth.

Severance Pay

Only when employees are dismissed after 12 years of service do they receive compensation. The severance pay in Greenland is based on years of service; for example, an employee of 12 years receives one month’s pay, whereas employees of 17 years receive three months’ severance pay. 

Supplementary Employee Benefits in Greenland

In addition to statutory employee benefits in Greenland, foreign employers are encouraged to attract top talent and improve employee retention rates with extra perks. Employees are looking for flexibility and work-life balance that can be achieved with supplementary benefits. A few of the most popular fringe benefits are explored below: 

  • Supplementary Health Insurance: Residents and citizens of Greenland have access to healthcare, but some employers offer additional private health insurance as a perk. This may include dental cover or access to a range of specialists.
  • Supplementary Pension Plans: While employers contribute to the mandatory pension scheme, additional private pensions can be purchased to fund an employee’s retirement.
  • Holiday Bonuses: Despite 13-month pay not being mandatory in Greenland, employers can offer a holiday bonus as a reward to motivate their workforce.
  • Flexible Working Hours: Greenland is known for its slower pace of living, but residents value work-life balance. Awarding employees with flexible working hours or remote solutions, such as working from home, is an attractive incentive.

Optimize Employee Benefits with Remote People

Greenland is known for its growing tourism sector and investor interest in mining its mineral resources and precious stones. Tourism alone has contributed approximately DKK 1.9 billion to the GDP in 2023, creating jobs and sustainable business activities. The large island does not charge its residents VAT, and both local and foreign businesses can hire skilled workers with a minimum gross monthly salary of DKK 14,054 ($1974). 

Because international expansion in Greenland requires careful adherence to local labor laws, it’s easier to partner with a professional EOR to guarantee compliance, establish a competitive workforce, and prevent employee misclassification. The EOR company will break down mandatory employee benefits and popular perks for greater negotiating power while attracting top talent. 

You don’t have to look further than Remote People’s EOR services to rapidly hire employees and operate a business in Greenland. 

Remote People has assisted their clients with successful global expansion for many years by focusing on tailored payroll, employee benefits administration, and compliance solutions in Greenland. Discover just how Remote People can help you by contacting their team of trusted experts today!