05.12.2017

News

The Danish “parliament” has agreed on the new Holidays Act

In September 2014, the European Commission ruled that the Danish rules regarding holidays were not in compliance with international law. The Danish government, therefore, established a committee (the Holidays Committee) which was to come up with a report on a more current new Danish Holidays Act in accordance with EU law.

Based on the findings and recommendations in the Holidays Committee's report on a new holidays act issued on 22 August 2017, a majority in the Danish Parliament has now agreed on the framework for a proposal for a new Holidays Act. If the bill is adopted, the law will enter into force on 1 September 2020.

This has led to greater clarity on what the new holiday rules in Denmark will be and here you can get an overview of the most important changes compared to the current legislation.

Concurrent holidays

With the new Danish Holidays Act a new holiday regime is introduced that ends offset holidays, as we know from the current Holidays Act. Under the current rules, holidays are earned from January to December (accrual year), whereas employees cannot spend their accrued holidays before 1 May of the following year (until 30 April (holiday year)). New employees on the labour market, therefore, may have to work up to 16 months without leave before they can take paid (holiday) leave.

The new Holidays Act introduces concurrent holidays.

This means that employees can now accrue and take the leave during the same period. If an employee starts a new job on August 1st, the employee will accrue 2.08 holidays per month, which means that, for example, a (paid) Christmas holiday leave can be taken the same year. The change is of significant importance for recruited and new payroll workers in the labour market, as they will be entitled to paid (holiday) leave already from the first year of their employment when the new rules enter into force.

The amendment also introduces a new period for the accruing and taking (holiday) leave.

Holiday leave will be earned from 1 September to 31 August the following year (holiday year). The earned holiday leave can be taken on an ongoing basis as it is accrued and the following 4 months, so that the holiday period lasts from 1 September to 31 December the following year (holiday period). This means that the holiday leave period will be extended from 12 to 16 months. This extension of the holiday leave period has been made in order to ensure greater flexibility in the labour market during holiday leave.

The new Holidays Act does not change the number of paid holiday leave days. Employees will therefore continue to earn the right to five weeks paid holiday leave per year.

Transitional arrangement

Simultaneously with the amendment of the Act, a transitional arrangement for concurrent holidays will be adopted to ensure a smooth transition to the new holiday system. The transitional arrangement will mean that holiday leave earned from 1 September 2019 to 31 August 2020 will not be accessible after the new Act enters into force. This earned holiday leave will only be accessible when the employee retires or leaves the labour market.

As an employer in Denmark, it is important to be aware that the adoption of the new Holidays Act will necessitate a number of changes in among other things, employment contracts and HR policies so that the holiday agreements are in line with the new holiday rules.

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