Employer of Record in Greenland

An Employer of Record (EOR) in Greenland is a service that legally employs workers in the country on your behalf. This allows you to hire employees in Greenland without establishing your own local company. An EOR handles responsibilities like payroll, taxes, benefits, and compliance with Greenlandic labor laws. This arrangement lets you focus on managing your team's daily work while the EOR takes care of the legal and administrative employment duties. For companies looking to hire in Greenland, providers like Rivermate can simplify the process.

How an Employer of Record (EOR) Works in Greenland

Using an EOR in Greenland simplifies the hiring process. Here is how it generally works:

• You Find the Talent. You are responsible for recruiting and selecting the candidate you want to hire in Greenland.
• The EOR Hires Your Candidate. The EOR legally hires the employee through its local Greenlandic entity, making it the official employer.
• The EOR Manages HR and Payroll. The EOR handles all local HR tasks, including payroll, taxes, benefits, and ensuring compliance with Greenland's labor laws.
• You Manage Your Team. Your new employee works for your company just like any other team member, while the EOR handles the administrative side.

Why use an Employer of Record in Greenland

Using an EOR in Greenland can provide several key benefits for your business. It allows for a faster and simpler entry into the market by handling compliance without the need to establish a local entity. This means you can onboard employees quickly and efficiently while the EOR manages the complexities of Greenlandic labor regulations.

Here are some of the key benefits:

• Ensures Compliance. An EOR stays current with Greenland's unique labor laws and regulations, reducing the risk of non-compliance. You can find more information on Greenland's tax regulations on the Greenland Tax Agency website at https://aka.gl/en.
• Handles Payroll and Taxes. The EOR manages all aspects of payroll, including tax withholdings and contributions, ensuring everything is handled correctly and on time.
• Provides Local Expertise. You gain access to local HR professionals who understand the specific employment landscape in Greenland.
• Reduces Costs. By using an EOR, you can avoid the significant costs associated with setting up and maintaining a legal entity in Greenland.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Greenland includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Greenland.

Hiring in Greenland might seem complex, but it's straightforward when you understand the local labor laws. Greenland's employment regulations are influenced by Danish law but have their own specific rules. The key is to ensure fair treatment and clear communication with your employees from the start. This guide will walk you through the essentials of hiring in Greenland.

Employment contracts & must-have clauses

You must provide a written employment contract if the job lasts longer than one month and involves more than 15 hours of work per week. The contract should be in plain language, and your employee can request it in either Greenlandic or Danish.

Make sure every contract includes these key details:

• Names and addresses: Both yours and the employee's.
• Work location: The primary place where the work will be done.
• Job description: A clear outline of the role, title, and responsibilities.
• Start date: The official first day of employment.
• Contract length: State if it's for a fixed term or an indefinite period.
• Holiday entitlement: Information on paid leave.
• Notice periods: The required notice for termination for both you and the employee.
• Salary and compensation: Details on salary, pension, and any other allowances.
• Working hours: The normal daily or weekly hours.
• Collective agreements: Mention any collective agreements that apply to the role.

Probation periods

You can include a probationary period in the employment contract. This allows both you and the new employee to see if the job is a good fit.

A typical probation period in Greenland is three months. During this time, a shorter notice period of 14 days usually applies for termination.

Working hours & overtime

The standard work week in Greenland is typically 40 hours, spread over five days. Total working time, including overtime, generally should not exceed an average of 48 hours per week over a four-month period.

Key regulations on rest and breaks include:

• Daily rest: Employees are entitled to at least 11 consecutive hours of rest in every 24-hour period.
• Weekly rest: Employees must have at least one 24-hour rest period each week, usually on a Sunday.

There is no specific law regulating overtime pay. Instead, overtime rates are typically determined through collective bargaining agreements.

Public & regional holidays

Employees in Greenland are entitled to paid time off for public holidays. It's important to factor these into your work schedule.

Some collective agreements may also provide time off for other days, such as International Workers' Day (May 1), Christmas Eve (December 24), and New Year's Eve (December 31).

Hiring contractors in Greenland

Hiring independent contractors can be a flexible way to bring in specialized skills. Contractors are self-employed and manage their own taxes and social contributions. This means you don't withhold taxes from their payments, which simplifies payroll.

However, it is critical to classify workers correctly. If a relationship looks more like employment than contracting, authorities can reclassify the worker as an employee. This is known as misclassification.

Misclassification creates significant risks for your business, including:

• Back payments: You could be liable for unpaid income taxes and social security contributions.
• Benefit costs: You may have to pay for past employee benefits like holiday and sick pay.
• Fines and penalties: Authorities can impose fines and interest on the amounts owed.

Using an Employer of Record (EOR) helps you avoid these risks. An EOR ensures that your workers are classified correctly under Greenlandic law. We handle all the legal and administrative tasks, so you can focus on managing your team and growing your business without worrying about compliance.

Understanding compensation and payroll in Greenland is straightforward. The system is influenced by Danish practices but has its own local rules. Most employment standards are not set by government laws but through agreements between unions and employer groups. This means that for many jobs, the pay, working hours, and other conditions are decided by industry-specific agreements. The typical pay cycle is monthly, and employers handle withholding taxes from employee wages.

Payroll cycles & wage structure

In Greenland, you will find that the payroll cycle is typically monthly. Most employers pay their employees once a month through a direct bank transfer.

Your salary and benefits will depend on your industry, your specific role, and your experience level. The cost of living in different parts of Greenland can also affect how much you earn. Collective bargaining agreements between unions and employers are very important in setting minimum wages and working conditions for many jobs.

Besides your base salary, your compensation package might include:

• Holiday Allowance: An extra payment on top of your regular holiday pay.
• Pension Contributions: Employers often contribute to your pension plan.
• Travel Allowances: If your job requires you to travel, you may get an allowance to cover your expenses.

Overtime & minimums

Greenland does not have a national minimum wage set by law. Instead, minimum pay rates are usually established through collective agreements for different industries. If your job is not covered by one of these agreements, your wage will be determined by your individual employment contract.

There is also no specific law that sets overtime pay rates. Any payment for working extra hours is typically negotiated as part of a collective bargaining agreement. While there isn't a strict daily limit on work hours, the standard work week is often 40 hours. Total working time, including overtime, generally should not average more than 48 hours per week over a four-month period.

Employer taxes and contributions

As an employer in Greenland, your main responsibility is to withhold income tax from your employees' salaries. You are also required to make a social security contribution.

Employee taxes and deductions

As an employee, your main deductions from your paycheck will be for income tax and your pension. Greenland's income tax system is progressive, meaning the tax rate increases with your income.

In Greenland, you'll find that employee benefits and leave are influenced by Danish labor laws, but adapted for the local context. This means a strong foundation of statutory leave and social security, with opportunities to offer additional perks to attract top talent. The system is designed to support employees' well-being and work-life balance, ensuring they have time for rest, family, and health.

Statutory leave

Greenlandic law provides several types of paid leave for employees. These are the minimum requirements you must provide.

• Annual Leave: Employees are entitled to five weeks of paid annual leave. They accrue 2.08 vacation days for each month of employment.
• Sick Leave: Employees are entitled to paid sick leave. While the exact duration can vary based on collective agreements, workers are generally entitled to 26 weeks of leave within a year.
• Maternity Leave: Mothers can take up to 17 weeks of maternity leave. This usually starts a few weeks before the expected delivery date.
• Paternity Leave: Fathers are entitled to two weeks of paternity leave.
• Parental Leave: In addition to maternity and paternity leave, there are provisions for parental leave that both parents can share.

Public holidays & regional holidays

Your employees in Greenland are entitled to paid time off for public holidays.

Typical supplemental benefits

To be a competitive employer, you may want to offer benefits beyond the statutory minimums. Here’s a look at what's required versus what's commonly offered as an additional perk.

How an EOR can help with setting up benefits

Setting up a benefits package in a new country can be complex. An Employer of Record (EOR) simplifies this process for you. We handle the administration of all statutory benefits, ensuring you are fully compliant with Greenlandic law.

An EOR can also help you design a competitive supplemental benefits package. We can provide insights into local market expectations, helping you attract and retain the best employees. From health insurance to pension plans, we manage the enrollment and administration, so you can focus on your business goals.

When an employment relationship in Greenland ends, it's important to follow the correct procedures for termination and offboarding. This ensures you comply with local laws and treat your employees fairly. The process involves specific rules for giving notice and, in some cases, providing severance pay. Handling these final steps correctly helps you avoid legal issues and maintain a positive reputation.

Notice periods

In Greenland, the notice period for ending an employment contract depends on how long the employee has worked for your company. These periods are the minimum required by law, but individual contracts or collective agreements can extend them. Notice periods usually run from the end of a calendar month.

Here are the minimum notice periods you must provide:

An employee can end the employment contract with one month's notice, regardless of how long they have been with the company.

Severance pay

Severance pay in Greenland is tied to an employee's length of service and is typically for terminations without cause. If you dismiss an employee who has been with your company for a long time, you may need to pay severance.

• After 12 years of continuous employment: 1 month's salary.
• After 15 years of continuous employment: 3 months' salary.

How Rivermate handles compliant exits

Navigating the details of termination and offboarding in Greenland can be complex. We make sure every step is handled correctly and in compliance with local labor laws.

Here is how we manage the process:

• Documentation: We prepare all necessary documents, including the formal written notice of termination.
• Final Pay: We calculate and process the employee's final salary, including any unused holiday pay and applicable severance.
• Compliance: We stay up to date on Greenland's employment laws to ensure every termination is handled fairly and legally.
• Clear Communication: We provide clear communication to the departing employee, outlining the final steps and what to expect.

If you want to work in Greenland, you need to navigate a system managed by both Danish and Greenlandic authorities. For most people, securing a job offer from a Greenlandic employer is the first step. The process involves getting a combined residence and work permit. Think of it as one application for both living and working in the country.

Citizens of Nordic countries have it the simplest. If you are from Denmark, Finland, Iceland, Norway, or Sweden, you can live and work in Greenland without a visa or work permit. For everyone else, including EU citizens, a permit is necessary.

Employment visas & sponsorship realities

Getting a work permit in Greenland hinges on having a local employer. The company that hires you must be registered in Greenland and will sponsor your application. This means they need to provide an employment contract and sometimes prove they couldn't find a local to fill the position.

So, what does this mean for working with an Employer of Record (EOR)?

• An EOR must be a registered Greenlandic company. To sponsor your work permit, the EOR has to be a legal entity in Greenland.
• The job offer comes from the EOR. The EOR legally employs you in Greenland, so they provide the employment contract needed for your permit application.
• The EOR handles the local requirements. This includes ensuring your salary and work conditions meet Greenlandic standards, which is a condition for the work permit.

The most common route to working in Greenland is the Standard Work Permit, tied to a specific job offer. Your permit is usually valid for the length of your employment contract, up to two years at a time, and you'll need to renew it if you stay longer.

Business travel compliance

If you are visiting Greenland for a short business trip, you might not need a full work permit. Greenland is not in the Schengen Area, so a Schengen visa is not valid for entry. However, if you are from a country exempt from Schengen visa requirements, you can generally visit Greenland for up to 90 days without a visa.

For short-term work, some exemptions allow you to work for up to three months without a permit. These apply if you are:

• A researcher or guest lecturer.
• A professional artist or athlete.
• A representative of a foreign company that does not have an office in Greenland.
• Installing or repairing technical equipment.

These rules are designed for specific, short-term tasks. If your stay involves ongoing employment, you will need a residence and work permit. Always check the specific rules before you travel.