Being one of the most complex in Europe, Danish Vacation Law can even leave some companies confused when their employees take vacation. The key to understanding Danish Vacation Law is to remember that the law exists to encourage employees to take their holiday.
By law, employees are allowed 25 days leave a year, though companies can choose to contractually allow more. Paid vacation is earned in the Calendar Year, which runs from January to December. However, paid vacation is taken the following Vacation Year, which runs from May 1st to April 30th. This in practice means that employees in 2013 are currently taking days they earned in the calendar year 2012.
When a vacation year comes to an end on April 30th, employees are allowed to roll over up to 5 days to the following vacation year, providing that there is an agreement signed by both the employer and the employee. The interesting twist comes when there are more than 5 days to roll over: if this is the case, the employee loses these days completely and the employer must report and pay the accrual into a vacation fund called AFF (Arbejdsmarkedets feriefond) www.aff.dk . Both the employer and the employee lose out if more than 5 days of leave are left not taken.
Leaving the company
When employees who are paid salary during vacation decide to leave, the company needs to pay the remaining accrual (12.5% vacation pay based on vacation pay entitled salary and outstanding vacation days) to a government administered fund named Feriekonto, rather than directly to the employee.
The employee can then apply for their vacation pay from Feriekonto in his/her next position. The payment must always be made to Feriekonto when the employee is terminated through payroll so as to avoid paying interest on late payments.
There are, of course, exceptions to the rule whereby vacation pay can be paid out directly to the employee. Below are some specific occasions when the employee has been prevented from taking their earned vacation days:
– Leave (maternity, parental etc.) – Sickness – Military Service – If the employee is moving abroad straight after leaving the company.
Due to the difficulties with vacation funds and the policy covering different years, Danish Vacation Law is complicated to administer. However, if administered correctly, employees will feel the benefits of enjoying their holidays and using their leave balances. For more information about Danish Law, please contact us http://celergo.com/contact-us/.