Information for unemployment funds about Factofly

Factofly is a freelance agency that has existed for 4 years and is among the largest of its kind in Denmark. 

Since its inception in 2020, Factofly has collaborated with Magistrenes A-kasse to offer our service to their members.

Below is a brief overview of our model, as well as statements from STAR (the Danish Agency for Labor Market and Recruitment) and the chief lawyer from the National Board of Industrial Injuries.

If there are any further questions or anything else we can help with, you are very welcome to call or write directly to our lawyer Jannik Flor Borg.

Review of the Factofly model

1. The user (employee) finds the customer/job and informs the customer that they want to use Factofly.

2. The user creates a task with us, describing the work to be done, the number of hours and payment.

3. Depending on the size of the job, we either send an order confirmation for them to confirm to us or a contract for them to sign. In both cases, Factofly is included as a supplier in relation to the work to be done. The customer enters into an agreement with Factofly and not the user. Thus, Factofly is also liable if there are any defects or other issues in connection with the work. 

4. We draw up a contract for the user for the work with a description of the work to be done.

5. If there are any changes to the work along the way, the customer must inform us directly via the confirmation they have received and then we inform the user. So the customer is not allowed to change the task directly to the user.

6. Invoicing takes place (typically at the end of the work) by the user creating an invoice in our system. We then check that the invoice matches the agreement made with the customer and send it to the customer.

7. The salary is then paid to the user - either when the customer pays the invoice or within 24 hours of the invoice being sent.

We collect the user's tax card from the tax authorities and report and pay a-tax, atp and other social costs for the user.

The employment contract is signed by the user with MyID.

The user is solely obliged to deliver his work to the best of his ability, while Factofly is obliged to deliver what has been agreed with the customer. 

In the event of the customer's inability to pay or bankruptcy, we pay the salary to the user.

In case of illness, we cover the user.

In other words, the user does not bear any financial risk in performing the work and works in our name and under our supervision and not in their own name or risk.

We also monitor that the pay for the work in question is according to standard working conditions and reject assignments where the work to be performed and the time spent on it does not match the total order size so that the hourly wage will be below market level for other similar work.

Statement from the National Board of Industrial Injuries

Extract of the opinion from the National Board of Industrial Injuries, which has assessed Factofly's model. Their chief lawyer has made the following statement (our emphasis).

(...) Freelancers will without the described construction, freelancers will in practice be regarded as employed for (temporary) work for the company that is to have a task performed, with the company as the employer liable for insurance and its insurance company as responsible for payment of expenses in cases of occupational accidents or with the company's industry group as responsible for payment of expenses in cases of occupational diseases.

Alternatively, freelancers can be considered self-employed provided that they are genuinely and effectively running a registered business in their own name and not just working for a single company.

The described construction lifts the freelancers out of the role as an employee of the company that has to perform temporary work or alternatively out of the role as self-employed and into a temporary employment relationship with Factofly. (...)

Opinion from STAR about the use of freelance agencies for earning unemployment benefits asked by Factofly. *The highlighted are our additions.

According to the rules, the right to unemployment benefits is conditional on a full-time insured member of an unemployment fund having an income of at least DKK 263,232 (2024) within the last 3 years.

You can find this in section 53(2)(1) of the Act on Unemployment Insurance, cf. Consolidated Act no. 503 of May 11, 2023 (the Act).

A-income from which labor market contributions are payable and which has been reported to the income register can be included.

You can see this in section 53(3)(1) of the Act.

Factofly's comment:

All employment with us is considered a-income, where labor market contributions are paid and reported to the income register. 

If the income is earned through paid employment, only income paid in a customary employment relationship that is in accordance with applicable collective agreements or otherwise performed on ordinary pay and working conditions is included.

You can see this in section 53(6) of the Act.

In practice, the member's pay and working conditions are compared with a comparable collective agreement if the employment relationship is not covered by a collective agreement. 

Factofly's comment:

When creating an assignment with us, we always check that the salary level at least follows the collective agreement in the area in question.