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LEGAL NEWS - New Danish Holidays Act

14. September 2017

On 27 April 2015 the EU Commission stated that the current Danish Holiday Act is not in compliance with the EU-legislation. According to EU-legislation an employee has to be entitled to minimum four paid weeks of vacation each year. According to the Danish Holiday Act an employee is entitled to minimum 5 weeks of holidays per year, but because of the distinguishing of the “accrual year” and the “holiday year” this holiday is not always with pay.

The Danish Holiday Act distinguishes between the “accrual year” and the “holiday year.” Employees accrue 2.08 days of paid holiday for each month of employment during the accrual year (the calendar year). Accrued holidays can be taken in the following holiday year, from 1 May to 30 April. That implies that holidays accrued in the period from 1 January to 31 December 2017 must be taken as paid holiday during the following holiday year, which is from 1 May 2018 to 30 April 2019. If an employee has not accrued the right to paid holiday, the employer can deduct 4.8 percent of the monthly salary for each day of holiday taken by the employee.

For new graduates or cross-border employees who enter the Danish job marked this means that these employees who have not accrued any vacation will have to wait up to 16 month before they have accrued the right to paid vacation.
On this background the Danish Holiday Act Committee has now finally presented their proposal for a new Danish Holiday Act to the Minister for Employment.

According to the proposal from the Danish Holiday Act Committee newly employed should have the right to paid holiday already during their first year in the labour market. This means that the accrual year and the holiday year will become coincident so that salaried employees accrue and take their holidays at the same time.

The Danish Holiday Act Committee has proposed that holidays are accrued from 1 September to 31 August and can be taken in the same year from 1 September to 31 December the next year. The extension of four months in the holiday period will increase the flexibility in connection with taking holidays. The number of holidays will be the same as today, meaning 5 weeks per year.

To avoid that employees who have accrued holidays in accordance with the current Holiday Act will be able to accrue up to 10 weeks of holidays in the transition period, the Committee has recommended that holidays accrued in the year prior to the entry into force of the new Danish Holiday Act will be suspended meaning that the employee cannot take the holidays or receive payment in lieu of the holidays until the employee retires.

The proposal is now to be negotiated in the Danish Parliament and the Danish government is expected to complete the preparations for the new Holiday Act by the end of the year.

If the new Holiday Act is adopted, the legislation will enter into force in September 2020. The reason for the long transition period is to ensure that the parties to the collective agreements are able to amend the new rules.
Therefore you do not need to make any changes in relation to your holiday policies for now. 

For further information you are welcome to contact attorney Alexandra Huber at .