Practical Information Regarding the new Danish Holiday Act September 2020 Holiday year and holiday period The basic idea of the new holiday year and the new holiday period is to adjust to the typical holiday patterns of the employees - and thus secure the transition to simultaneous holidays. Each month, 2.08 holiday days are earned, which can already be held the following month. If the employee is hired per September 1, and wish to have winter holiday in February, the employee will therefore have earned 10 holiday days, of which 5 holiday days can be used for winter holiday and 5 holiday days can be saved for the summer holidays, where the employee will then have 15 holiday days available. The employee will then have 5 days off in September, which the employee can use for holidays in the fall (“efterårsferie”). An illustration of the basic idea of the new Holiday Act is reproduced below:
Below are the most common questions, and after the questions you can read more in-depth about the new holiday act. Q / A - the new holiday act Q: What does the new holiday Act mean to me? A: In practice you will probably not experience the big difference. New employees will experience receiving wages during holidays from the start of employment. If you have already been employed for a while, you will still have a paid holiday if you have a monthly salary and still have holiday allowance if you are on hourly wages. You will also roughly have earned paid holiday for the holiday you want to spend (autumn, winter and summer) - these are the new rules made to cater for.
Source: Ferielovsudvalget & Forlaget Andersen
1
The difference will primarily consist of the fact that the 5-week holiday is now earned and held differently - and that you have to be more aware of whether you have earned days for the holiday you want to spend. You can also experience the holiday supplement getting paid a little differently. Where you may previously have received 1% holiday supplement each year in May, the holiday supplement under the new law will be distributed so that you receive holiday supplements at the end of May and at the end of August, respectively. If you are on hourly wage you will also find that holiday supplement is paid a little faster by us to the holiday account (“Feriekonto”) - and here you also have to follow a little closer, whether you have earned holiday allowance for the holiday you would like to spend. Q: Should I do something? A: No. The transition to the new holiday act does not require you to do anything specific. As mentioned above, however, it may be relevant for you to be a little more aware of whether you have earned holidays for the holiday you want to spend. Q: Why do we need a new holiday act? A: The primary reason is that the current holiday act is in violation of the EU law because it generally requires everyone (including new employees on the labor market) to be entitled to at least 4 weeks of paid time off (which was not the case under the current holiday act). Q: What is the “freezing period” or a transitional period? A: In order to create a transition from the old to the new holiday act, it has been decided to make a period - a so-called freezing period or transition period - where holiday is "frozen". Basically, the transitional period means that an amount equal to 12.5% of all you earn during the period September 1, 2019 - August 31, 2020 will be reported and paid into a fund. You will receive this money when you leave the labor market - ie when you retire (and in a few other cases). Or deregister from the Danish CPR. The reason for having such a period is that there would otherwise be a situation where employees would have “double holiday” - that is, both holidays that were earned during the previous calendar year under the old system and holidays earned while the holiday is held under the new system. This has been decided to be handled in the way that holiday earned for a period is thus paid into a kind of "pension scheme". Q: What does the freezing period or transitional period mean for me? A: In reality you will probably not experience the big difference in your way of holidaying during the transition period. However, you must be aware if you have earned paid holiday to spend the autumn of 2020. This is because, as of September 2020 you pass the rules on concurrent holiday. Source: Ferielovsudvalget & Forlaget Andersen
2
Simultaneous holiday Simultaneous holiday means, in short, that you earn and spend your holiday at the same time over the new holiday period, which runs from September 1 to August 31 - but with an opportunity to spend holiday for an additional period of 4 months until 31 December. You therefore have a period of 16 months from 1 September to 31 December (the “afholdelsesperioden") to spend the earned holiday. Thus the "holiday period" in the new holiday act must be understood as the holiday year, plus an additional 4 months You will still earn the right to a 2.08 day paid holiday per month so that in one year the right to 25 days paid holiday is earned. The first holiday period is from September 1, 2020 to December 31, 2021. Employees will be entitled to a minimum of four weeks' holiday during the holiday period and to hold a 3-week continuous holiday (the main holiday) during the period from 1 May to 30 September.
Source: Ferielovsudvalget & Forlaget Andersen
3
Advance holiday - what is it? With the new holiday act, it is possible for the employer to allow employees to spend paid holiday in advance (or with a payroll deduction of 4.8% per day). If you hold an advance holiday, the days will be set off afterwards in the holidays you earn or Issuu may, on your resignation, offset the value of the prepaid holiday in your salary and holiday payments. ** At Issuu, you will have the right to have a 5-day advance holiday in the period from September 1, 2020 - December 31, 2020.** This means that when you start the new earning year on September 1, 2020, you earn 2.08 days per month, then you can, for example, have an autumn holiday of 5 days in October, even if you have not yet earned 5 days in October 2020 (remember you also have the opportunity to transfer holidays from 2019, which you can spend on autumn holidays in 2020). You can spend the 5 days in advance as you like during the given period (Sep 1 - Dec 31 2020), and you may split them up as well during that period. In the new year from January 1 2020 it is no longer possible to spend holiday days in advance - you need to save the days you earn. Holiday transfer & increased possibility of direct payment of holiday As under the current law, it’s possible to agree on the transfer of holiday beyond 4 weeks, so unused holiday can be transferred to the following holiday period. The holiday transfer agreement must be in writing and must be concluded before 31 December in a given year. The transferred days may, just as under the current law, be accumulated. Transferred holiday must be held before the holiday earned (but note that earned holiday during holiday obstacle must be held before the holiday transferred). The order is thus (i) holiday-obstacle holiday, (ii) transferred holiday and (iii) ordinary earned holiday. With the new holiday act, the employer and the employee can agree that holidays beyond 4 weeks are paid to the employee already after 31 August. However, the employer must, regardless, pay holiday beyond 4 weeks, which has not been paid or held on December 31, unless the parties have agreed in writing that the holiday must be transferred. Holiday transfer in case of holiday Obstacles In the event of a holiday obstacle (illness, maternity leave, etc.) up to the end of the holiday period, up to 4 weeks paid holiday, annually, is transferred to the following holiday period. The transferred holiday during a holiday obstacle is held before other holiday and is not included in the calculation of 4 weeks holiday by (i) transfer of holiday beyond 4 weeks, (ii) payment of holiday beyond 4 weeks at the end of the holiday year or (iii) payment of holiday beyond 4 weeks at the end of the holiday period. Source: Ferielovsudvalget & Forlaget Andersen
4
If the obstacle still persists or a new holiday obstacle arises up to the end of the subsequent holiday holding period, the holiday is transferred again. If the holiday obstacle is either illness or maternity leave and continues to be up to the end of the subsequent holiday residence period, the holiday-barred transferred holiday can be paid. Holiday Allowance Holiday allowances will also exist with the new holiday law and will still amount to 1%. The holiday allowance will be paid in portions in May (for the period September - May) and in August (for the period June - August). Note that during the transition period, you will not earn up the usual holiday allowance amount, since holiday days from Sep 1, 2019 - August 31, 2020 are being frozen. Therefore the next holiday allowance in May 2020 corresponds to 1% of 8 months gross salary (January 1 - August 31, 2019). in May 2021, you will receive a holiday allowance from the period Sep 1 - December 31, 2020. Holiday notification The main holiday must still be notified 3 months in advance, and all other holidays must be notified 1 month in advance. It will still be possible to agree on a shorter notice or a voluntary arrangement through a current and concrete agreement, and where you can hold at least 10 days of continuous main holiday.
Basics of the Transition or “freezing period” Transition Period Holiday earned during the period of September 1, 2019 to August 31, 2020 is "frozen". The transitional scheme is designed so that you do not lose earned holiday at any time in the ongoing employment relationship - they thus depart from holiday that has been earned earlier, for holidays that are earned on an ongoing basis. However, the "staggered" earned holiday is frozen and not paid. The transitional scheme should make the transition from the staggered holiday (the existing system) to the simultaneous holiday easier and without being more expensive for the employers. The transitional scheme means that holidays earned during the period from September 1, 2019 to August 31, 2020, according to the current scheme, are frozen and cannot be held or paid out. Although holidays are frozen, most employees will be able to continue their holiday as usual. This is due to the fact that the holiday earned during the period from January 1 to August 31, 2019 (16.7 holiday days) can be held in the period from May 1 to September 30, 2020. Thereafter the employee passes to the new holiday arrangement . If the employee does not spend the 16.7 days in the period from May 1 to September 30, the remaining holiday days will be transferred to the subsequent holiday period and can be held according to the new rules. Below is an illustration of the transition and “freezing system”: Source: Ferielovsudvalget & Forlaget Andersen
5
The new holiday act does not change the current rules on holiday allowance of 12.5% for employees who are not employed at fixed monthly wages, and employees in fixed monthly wages will in the future also be able to get holiday allowance by 12% instead of saving right to holiday with pay. When can you get the frozen holiday pay paid out? The fund pays out holiday pay receivables with the addition of annual adjustments to you once you have reached the national pension age. The frozen holiday pay may additionally be paid to you who have left the labor market when the employee: ● ● ● ● ●
has been granted early retirement pension has been granted early retirement pay has been granted flex allowance has been paid an old-age pension have taken a permanent stay abroad
In the event of death, the fund pays out holiday credit receivables to the estate / heirs.
Source: Ferielovsudvalget & Forlaget Andersen
6
Employees who are employed during the transition period Newbies on the labor market who commence employment after January 1, 2019 are covered by another transitional scheme. The transitional scheme allows those who are new (or returning) to the labor market to hold up to 8.3 fund holidays* for "frozen funds" during the period May 1 to September 30, 2020 . This only applies to those who earn holiday days for “freezing” from September 1 to December 31, 2019 and have not earned holidays to spend in the period from May 1 to September 30, 2020 or who have earned less than 8.3 holiday days to spend in the period from May 1 to September 30, 2020, so you can also have up to 16.7 paid holidays during the transition year and thus the opportunity to have paid holidays during the summer period as all your other colleagues.
*there will be more information later, in regards to how you apply for fund holidays.
Source: Ferielovsudvalget & Forlaget Andersen
7