What happens to the remaining holiday?

The holiday year for 2022 is coming to an end. This also raises a number of practical questions that need to be considered in the next pay runs:

 

What is the difference between the holiday year and the holiday settlement year (ferieafviklingsår)?

The Danish holiday year runs from September 1 to August 31 of the following year. All employees accumulate 25 days of holiday per holiday year, meaning the employees will accumulate 2.08 holidays per month.

The holiday earned during a holiday year can be taken in the period from 1 September to 31 December of the following year (ferieafviklingsår). The holiday settlement year is therefore the holiday year plus the subsequent four months.

When can the holiday be taken?

 It is important to differentiate between main holiday and remaining holiday. The main holiday is three weeks and can be taken in the period from May 1 to September 30. The main holiday must be announced at least three months in advance. A prior notice of three months is therefore required if an employer wants to impose the settlement of the main holiday on the employee.

Remaining holiday is the holiday that does not constitute main holiday, i.e. the two weeks beyond the main holiday.

Remaining holiday must be announced at least one month in advance and may therefore be imposed on the employee with one month’s notice. If the employer and the employee agree, the holiday can of course be granted at shorter notice.

 

How many holidays can be transferred?

 20 days of the accumulated holiday must be settled in the holiday settlement year and cannot be transferred or paid out to the next settlement year. Any employee who has accumulated 25 days of annual holiday can therefore transfer a maximum of five days into the following holiday settlement year.

If the 20 days are not settled, they must be paid into the Labor Market Holiday Fund (Arbejdsmarkedets Feriefond) or another private holiday fund and the employee thereby loses the entitlement.

However, if an employee was unable to take his/her holiday in the previous holiday settlement year due to a holiday obstacle, and it was transferred into the current settlement year, this holiday – which was transferred due to a holiday obstacle – must also be taken in the current holiday settlement year.

 

How is holiday transferred?

 Holiday that exceeds 20 days of holiday (the so-called 5th holiday week) can by agreement be transferred to the following holiday settlement year, currently to the period September 1 2022 to December 31 2023.

The employee has no legal right to transfer of holiday. The transfer of holiday always requires an agreement between the employer and the employee. This agreement must be concluded no later than December 31.

We recommend a short written agreement between the employer and employee, so the payroll administration can register the changes. A confirmation by email is also sufficient.

 

Can holiday that has been transferred continue to be transferred?

 Only holiday that exceeds 20 days can be transferred. This means that an employee can transfer five days in the first year and thus have 30 days of holiday in the following settlement year. If the employee can only handle 20 days of holiday in the second year as well, he or she can again transfer up to five days to the following year.

In this way, the employee can thus accumulate transferred holiday. The Holiday Act does not contain any restrictions on how many times the employee can transfer holiday. However, such limitations may be specified in the employment contract or in the company’s internal holiday policy.

However, in the second holiday settlement year, the holiday must be taken – both the holiday accumulated in the current year and the transferred holiday.

 

When can the 5th week of holiday be paid out?

 If the employee was only able to take 20 days of holiday and no agreement was made to transfer the remaining holiday, the employee is entitled to payment for the 5th week of holiday.

Employers must pay the employee for holiday that exceeds 20 days and that has not been taken or transferred to the following year, no later than March 31, 2023. The employee therefore does not have to request for the 5th week of holiday to be paid out.

Payment to the employee may also be made during the period from September 1 to December 31, 2022, if the employer and employee agree.

 

Transfer of holiday in case of incapacity in the holiday settlement year – what is possible?

For employees who are prevented from taking holiday, e.g. due to maternity holiday or illness, up to 20 days of holiday can be transferred to the following holiday settlement year. If the employee is still on maternity holiday or sick in the following holiday settlement year, the transferred days of holiday can be paid out to the employee.

 

Can the employer impose the settlement of the remaining holiday until December 31, 2022?

 If the employer wants the remaining holiday to be held and not transferred or paid out, the employer may order the holiday to be taken with one month’s notice. Holiday that is to be taken in December 2022 must therefore be announced to the employee no later than October 31, 2022.

We recommend that all employers review the employees’ holiday balances in October 2022 and decide during October, how the holiday balances should be handled. For companies with many employees, it is advisable to regulate such issues in the personnel handbook or a holiday policy.

Do you have questions about holiday or would you like to receive a form to arrange with your employee(s) to transfer remaining holiday into the following holiday settlement year, contact us!

 


Your labor law team


 

Alexandra Huber

+45 5116 7494
alexandra.huber@lead-roedl.dk

 

 

 

 

 

 

Jana Behlendorf

+45 23 24 60 22
jana.behlendorf@lead-roedl.dk

 

 

 

 

 

 

Navina Jegarubanathan

+45 60 52 43 04
navina.jegarubanathan@lead-roedl.dk

 

 

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