6 Things You Must Know About Holiday

As summer approaches, many people have started planning their holidays. In this context, both employers and employees need to have a basic understanding of holiday entitlements and the taking of holidays. Here are six key points you should know about holidays:

1) Length of Holidays

The length of holiday an employee is entitled to depends on the Holidays Act, collective agreements, or other agreements/internal company policies.

According to the Holidays Act, all employees are entitled to at least 25 “working days” of leave in connection with holidays each year. In the Holidays Act, “working days” include all days except Sundays and public holidays. If you work five days a week, the law entitles you to at least four weeks and one day of holiday.

From the year an employee turns 60, the entitlement under the Holidays Act increases to at least 31 “working days.” For a five-day work week, this means five weeks and one day.
Most employees, however, are entitled to longer holidays due to collective agreements or individual agreements/internal company policies. Therefore, remember to check these agreements to get an overview of the employee’s rights.

2) Holiday Pay Compensates for Loss of Salary

A fundamental principle in employment contracts is the exchange of work for pay. Employees receive salary for the days they work. When employees take holidays, the default rule is that they do not receive salary for those days.
The loss of salary is usually compensated with holiday pay. This is earned in the previous year and corresponds to a specific percentage of the employees’ earnings. For four weeks and one day of holiday, the rate is 10.2%. For five weeks of holiday, the rate is 12%.

The formal main rule in the Holidays Act is that employees should receive holiday pay in connection with taking their holiday, while the salary is simultaneously being deducted for the holiday days. In practice, holiday pay is often paid out in a lump sum, typically in June and sometimes partially in July. Employees’ salaries are then simultaneously deducted for all the holiday days they are entitled to during the current year.

Employees have the right to take holidays regardless of their earned holiday pay. However, if an employee has not earned sufficient holiday pay to cover the loss of salary during the holiday, they may refuse to take holiday days. This only applies to the extent that the earned holiday pay does not cover the loss of salary. This does not apply if the employer’s operations are shut down during the holiday period.

3) Unused Statutory Holiday Days Cannot Be Paid Out

Both employees and employers are obligated to ensure that all holiday days are taken during the year. Sometimes, however, employees may not have taken all their holiday days by the end of the year. If employees have already had their salary deducted for all holiday days in June and July, it indicates that they were deducted salary for days they worked.

Some may wish for unused holiday days, already deducted from salary, to be “paid out.” This is only allowed for holiday days beyond the statutory minimum, unless otherwise agreed. Statutory holidays, however, cannot be paid out. These holiday days are carried over to the next holiday year, regardless of the number of days.

Employers and employees must ensure that all holidays are taken during the holiday year. If the employer fails to meet this obligation, they may be held liable for damages.

4) Holiday May Be Taken in Advance or Carried Over to the Following Year

Employers and employees can agree in writing that up to 12 working days of next year’s holiday can be taken in advance or that up to 12 working days can be carried over to the next year. This corresponds to up to two weeks of work for those who work five days a week.

What can be agreed upon in advance does not limit the employees’ right to carry over unused holiday days at the end of the year.

5) The Employer Fixes the Holiday Dates

The employer decides when the employee will take their holidays unless otherwise agreed. Before making such a decision, the employer must discuss the timing of the holiday with the employee or their representative.

Employees who started work on or before August 15 may demand to take up to 18 working days of holiday consecutively between June 1 and September 30. The employees may also demand to take the remaining holiday days consecutively.

However, the opposite applies to the extra week of holiday that employees are entitled to from the year they turn 60. The employee decides when to take these holidays unless otherwise agreed.

6) The Employer May Change Fixed Holiday Periods

The employer can change the timing of the employees’ holidays if because of an unforeseen event, the holiday taken as fixed would cause significant operational problems, and it is not possible to find a replacement for the employee. Before making such a decision, the employer must discuss the matter with the employee.

If the fixed holiday is changed, the employee may claim compensation for additional expenses resulting from the change in holiday dates. The employee must inform the employer of such expenses during the discussion and must be able to document the expenses.

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Do you have any questions about what applies in case of illness before or during the holiday? Read [this article].