What should an employer be aware of before the new holiday year begins on 1 May?

The employer must ensure that the employees take their vacation. When planning the vacation, the employer must take the wishes of the employee into account, but ultimately, the employer can decide when all five weeks of holiday must be held, if the parties do not reach an agreement. Holiday earned in 2016 must be held no later than 30 April 2018, and it is therefore important for the employer to ensure that all holiday is held, or is scheduled to be held before 30 April 2018 or that an agreement is reached in order to carry forward vacation to the next holiday year. A maximum of one week’s vacation per accrual year may be carried forward, but it is possible to accumulate several weeks of holidays carried forward if the employer accepts this.

Employees earn 25 days paid holiday if they are employed for a full year. This corresponds to 2.08 holidays for each month of employment. Out of these 25 days, 15 days are referred to as the main holiday or summer holidays, whereas the remaining 10 days are referred to as the remaining holidays.

Under the present rules, holidays are accrued in the calendar year and should be taken in the following year from 1 May to 30 April (referred to as the holiday year). Employees who have not earned the right to take 25 days of holiday with pay may choose to take leave at their own expense. In this case, 4.8% of the monthly salary will be deducted to pay for the vacation.

The summer holiday should be held from 1 May to 30 September, unless other agreement is reached. The remaining part of the holiday can be placed at any time during the holiday year.

In the outset, the employee is to take his or her holiday according to an agreement with the employer, so that the company’s operations and the employee’s wishes for holiday can be taken into account. However, according to the Danish Holiday Act, ultimately, the employer can decide when the employee is going to take his or her holidays. If no other agreement is made, the main (summer) holidays must be notified with 3 months’ notice in advance and the remaining part of the holidays with 1 months’ notice. However, there is a legal basis for agreeing, for example in an employment agreement, that the holiday can be notified with shorter terms, for example, that the main (summer) holiday is only to be notified with 1 month and the remaining holidays with an even short notice.

Once the holiday has been agreed or notified, it cannot be unilaterally changed by the employee or employer. However, there is a legal basis for the holiday to be changed unilaterally by the employer if essential, reasonable operational considerations make this necessary. In such cases, the employee should have his expenses for the purchase of a new holiday trip reimbursed. If the employee has already started his or her vacation, this cannot be interrupted.

Illness is a holiday obstacle and this is also the case in relation to maternity leave and other kinds of leave.

It happens that some employees do not take of their holidays during the holiday year. If the employee has not taken all of his or her holiday before 30 April, a holiday allowance can be paid out in some instances. This also applies if the employee has been in a long-term illness or is on maternity leave or another type of leave with the consequence that the employee did not have the possibility of taking the holidays.

In addition, it can be agreed that untaken vacation will be transferred to the next holiday year. However, such an agreement must be concluded before 30 September of the new holiday year and a maximum of 5 days of vacation agreement per holiday year can be carried forward. However, it can be agreed that holiday carried forward can be accumulated with additional holidays, which has also been carried forward in previous years. It is, however, recommended that the employer makes a policy, which caters for this and which sets out the necessary restrictions and rules on this topic.

As from 1 September 2020, the new Danish Holiday Act enters into force, which, among other things, changes the rules for accruing and taking holidays, thus the new rules will imply that the employee is earning the right to holiday with pay while the holiday is to be taken (the principle of “simultaneous holiday”). Important transitional rules will, however, come into force already in 2019, which among other things imply that accrued holidays will be “frozen” in 2019 and should be paid into a special fund or kept in the company until the employee retires for pension. If you require further information on this topic, please send us an email at mk@mklaw.dk or sde@mklaw.dk.