Reason for the bill
After the coming into force of the new Holiday Act, which introduced concurrent holiday, an unexpectedly large amount of unclaimed holiday allowance has been ascertained. The expectation of the new Holiday Act was that employees would to a higher degree withdraw holiday allowance on a regular basis due to the concurrent holiday. However, it has turned out that many employees have had smaller amounts of unclaimed holiday allowance after the expiry of the holiday-taking period.
Under the previous Holiday Act, smaller amounts within the lower threshold limit were automatically paid to the employees if the requirements in this respect were met.
With the draft bill, the Ministry of Employment is therefore proposing to reintroduce the previous Holiday Act’s lower threshold limit adapted to concurrent holiday to reduce the amount of unclaimed holiday allowance in the future when these specific requirements are met.
Rules on lower threshold limit payments
The draft bill reintroduces the lower threshold limit with the effect that the employer must automatically pay salary during holiday and holiday supplement for non-taken holiday after the expiry of the holiday-taking period if the amount is maximum DKK 5,000 before deduction of tax and AM contribution and concerns holiday exceeding four weeks.
This will be an extension of the automatic payment option which already applies according to which it is only possible to make automatic payment of unclaimed holiday allowance (payment after the fifth week of holiday) if the employee has accrued holiday exceeding four weeks and has been employed with the same employer on a full-time basis in the entire holiday-taking period.
The bill furthermore specifically specifies the rules on lower threshold limit payment for employers with holiday card schemes who are to pay unclaimed holiday allowance to employees who have resigned during the holiday-taking period or are still employed.
The bill proposes that unclaimed holiday allowance with FerieKonto or a holiday fund is fixed at a maximum of DKK 3,000 after deduction of tax and AM contribution.
If the amount is maximum DKK 2,500 before deduction of tax and AM contribution, the employer can pay the amount directly to the employee in connection with the employee’s resignation without the employee taking the holiday. This will be an exemption to the fact that accrued holiday allowance must be reported to the income register and perhaps paid to FerieKonto.
Payment of non-whole days of holiday
As a predominant rule, accrued days of holiday must be taken as whole days. The present Holiday Act does not contain any rules as to whether non-whole days can be paid. There are a number of situations where the employee does not accrue a whole number of days during the holiday year, including when the employee has not been employed in the whole holiday year.
With the bill, it is now specified in the Holiday Act that if less than one whole day remains after the expiry of the holiday year, holiday allowance will be paid at the employee’s request.
This means that an employee who has taken the number of whole days accrued in the holiday year is entitled to any remaining non-whole day.
The bill will not preclude that the non-whole day may be included in the calculation of holiday exceeding four weeks which may be transferred according to agreement with the employer.
However, it is still possible for the employee to take a whole day of holiday and supplement the holiday pay himself/herself, and the employer may also supplement the holiday pay up to one whole day and give notice of one whole day.
Other issues
The bill also contains provisions which are to make the rules clearer and simplify the administration at the employer, Lønmodtagernes Feriemidler and Lønmodtagernes Garantifond. In the bill, the requirement for e.g. the employer’s annual confirmation that the employer will still keep non-due outstanding holiday funds has been deleted
