For most people the 1st of September is just the start of a new month. But in the Danish payroll world we welcome September 1st by saying goodbye to the old vacation year and hello to a new one.
Now what does that mean for you as an employer? Well, you need to start thinking about your employees' remaining vacation - do they have any leftover from last year? Or maybe even from the year before that…
Leftover vacation days?
Your employees accrue 25 days of vacation each vacation year. The accrual period that is relevant right now runs from September 1, 2023, up until August 31, 2024. The usage period runs until the end of the year, which is December 31, 2024.
Each vacation year your employees can maximally carryover (or get paid) the fifth vacation week (e.g. 5 out of the 25 earned vacation days). Your employees can then use these transferred vacation days the next vacation year (from the 1. September 2024 to the 31. December 2025). This transfer requires that there is a written agreement in place between yourself and your employee. If no agreement has been made, then the remaining vacation days must be paid out at the latest by the 31. of March.
Bear in mind that the transfer / payment is limited up to 5 days. This means if your employee has used 22 out of their 25 vacation days, then the remaining 3 days can be transferred or paid out.
However, if your employee has only used 15 out of their 25 days then only 5 days can be transferred or paid out to the employee. The remaining days (5) legally have to paid to Arbejdsmarkedets Feriefond (https://aff.dk/), or another like private vacation fund.
What about leftover carryover vacation from previous years?
Imagine the following scenario. Your employee used 23 days of their total 25 days last vacation period and transferred 2 days to this vacation period. Now the vacation period is over, and they have only used 18 of their total 27 vacation days (25 days earned, and 2 transferred). What’s possible?
The vacation law has proscribed that you can carry over an amount equivalent to what was previously carried over. What this means is that your employee can transfer (legally) 7 vacation days to the next vacation period! The vacation law does not set any limit for how many years total vacation transfers can be included. This means if you transferred 5 days per year for 5 years you could legally transfer all 25 vacation days going forwards.
Bear in mind that Collective Bargaining Agreements (CBAs) can put limits on this.
What if my employee was sick all year or on maternity leave?
If your employee was sick all year round or on maternity leave for a prohibitively long period of time that meant it was physically not possible for your employee to use their vacation. Then you are allowed to transfer (or pay out) more than just the 5th vacation week.
However, it’s imperative that it was actually impossible for your employee not to use their vacation. If there was any opportunity at all for your employee to have used their vacation, then transferring or paying out more than the 5th week is no longer legal.
Consequences for both employer and employee
You as an employer have a responsibility to ensure that your employees use their vacation. But, you can’t just from one day to the next say that their on vacation. You have to follow the vacation laws notice period, 1 month. If an employer does not follow the notice period rules, this can lead to disputes or legal conflicts that can be time-consuming for both the company and its employees.
Therefore, its strongly recommended that you as an employer keep yourself updated on relevant regulations and guidelines within the Danish vacation laws. This is in order to ensure a smooth and legally correct vacation planning process. Although it may seem like a challenge to coordinate employees' absence, it's important that this is done in due time because there are consequences for both employer and employee if deadlines are not met - as mentioned above, there needs to be agreement between employer and employee on carrying forward days by December 31st - if this is not done then any remaining days must be paid out.
Would you like to know more, read more through this link.
Comentários