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LEGAL NEWS - New Danish Holidays Act to enter into force in September 2020

Logo NJORD
6. September 2018

In 2014, the European Commission declared the current Danish Holidays Act to be incompatible with EU Law. In response to that decision, the Danish government took action and created a new Holidays Act, which particularly favors newly hired employees.

The committee to reform the Danish Holidays Act, which was solely created for that purpose, presented a proposal for a new Holidays Act to the Danish parliament. This proposal has now been adopted and will become effective as of 1 September 2020.

The new principle of “simultaneous vacation”

Current legislation is based on the principle of the so-called “postponed vacation year”. This means that an employee acquires his or her holiday entitlement during the current calendar year, but can only use that entitlement during the next “holiday year”, which begins on May 1 of the following year and runs until April 30 of the next year. During his or her employment, the employee earns 2.08 paid vacation days per month.

Thus, the worst case for newly employed workers or employees that recently moved to Denmark could be that they have to wait for 16 months after the start of their employment before they can take paid leave for the first time. This complicated provision has caused a headache for many foreign companies who employ workers in Denmark.

The new Holidays Act fundamentally changes this system and in doing so adjusts to the principle of the “simultaneous vacation year”, as it is known in other European countries.

With this new system, employees can now earn and use paid vacation days in the same period of time. For example, if an employee starts his or her new job on August 1, it will be possible that he or she will be granted a paid Christmas vacation in the same year. This reform is of significant importance, especially concerning newly employed workers, as they can now take paid leave in their first year of employment. Furthermore, the reform will support the free movement of workers in the EU.

New time period for calculating vacation days

In addition to that, a new time period for earning and using vacation days has been introduced. 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 retains the current amount of paid vacation days. Thus, employees are entitled to up to five weeks of paid vacation.

Transitional arrangement

To guarantee a smooth transition between the old provisions and the new ones, a transitional arrangement has been put in place.

From January 1, 2018 to December 31, 2018:
Last “accrual year” under the old provisions.
Vacation days can be taken during the “vacation year” from May 1, 2019 until April 30, 2020.

From January 1, 2019 to August 31, 2019:
16.7 paid vacation days can be earned during this time period.
Employees can use those vacation days from May 1, 2020 to August 31, 2020.

From September 1, 2019 to August 31, 2020:
Vacation days being earned during this period cannot be used and are being frozen.
These vacation days can only be used once the employee retires or leaves the job.

For further information you are welcome to contact attorney Sabine Glatz Taulov at sag@njordlaw.com

Last modified
6. September 2018
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