On 25 January 2018 the Danish Parliament passed a new Holiday Act which, among other things, entitles newly hired employees to take their holidays during their first year on the labour market. The new holiday law means that if an employee is hired in Denmark for a new job, the employee has the right to accrue holidays from day one. The new Holiday Act is to align Danish law with the EU Working Time Directive which entitles employees to take a minimum 4 weeks of paid holiday.
Currently, a newly hired employee must wait up to 16 months before being able to take his or her paid holiday. If the newly hired employee is hired from the 1 January, the holiday that the employee accrues will not be available to the employee until after 1 May the year after. This changes when the new Holiday Act enters into force in 2020, at which time accrued holiday will be available for all employees by the month, and not accumulated from 1 May.
With the new Holiday Act, the employee accrues and spends his or her holiday at the same time over a period of 12 months (the holiday year). The holidays are accrued from 1 September to 31 August the year after (12 months). This e.g. means that holidays accrued in June will be available to the employee in July the same year. However, the employee has the possibility of taking his or her holiday during an additional period of 4 months, which provides the employee with 16 months to take his or her holiday (the vacation period), i.e. until 31 December.
The two current types of holiday pay still apply; paid holiday with holiday allowance or holiday with holiday pay. As is the case today, with the new Holiday Act an employee will accrue 2.08 holidays per month.
Transitional arrangement
When transferring to accruing holidays at the same time as the employee is entitled to taking the holidays, according to current rules, the employee will have accrued holidays which he or she has not yet spent. At the same time, the employee will begin accruing new holidays which may be spent concurrently with the holiday accrual. To avoid that employees have ten weeks of holiday in 2020, the holiday that the employee accrues from 1 September 2019 to 31 August 2020 will be frozen, and the accrued holiday cannot be spent or paid out before the employee is no longer on the labour market.
Background
In 2014, the EU Commission estimated that the current Danish holiday rules did not comply with Directive 2003/88/EC – certain aspects of the organisation of working time. Pursuant to the working time directive, employees are entitled to four weeks of paid holiday per year, which is not the case according to the applicable Holiday Act, if the right to paid holiday has not been earned. This is a problem especially for newly hired employees, or e.g. foreign nationals coming from a job with a different holiday arrangement.
The new Holiday Act takes its point of departure in the recommendations that the Holiday Act Committee, which consists of the parties of the labour market, passed to the government in August 2017.
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