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Danish Holiday Act amended

July 2010 - Employment. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

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The Danish Ministry of Employment wants to stop employees speculating in having their holiday pay paid out. This has resulted in an amendment of the Danish Holiday Act.

It must be more difficult to speculate in having holiday pay paid out. The Danish Ministry of Employment has therefore amended the Danish Holiday Act to safeguard against speculation.  

Today, employees who retire from the labour market on grounds of age or ill-health or, in some circumstances, to take an interim pension (efterløn) are entitled to have their holiday pay paid out although no holiday is actually taken, and they can wait 3 years to have the money paid out. With the amendment of the Danish Holiday Act, the waiting period is reduced to 6 months.  

For employees choosing to retire on an interim pension, the trick about waiting 3 years to have their holiday pay paid out is that the holiday pay will not be deducted from the interim pension if the employee reaches the state pension age during that 3-year period and thus qualifies for old-age pension under the national pension scheme. This is because holiday pay is not deducted from the old-age pension.  

Welfare benefits
Today, holidays from the 5th week of holiday or holidays from a former employment relationship can be paid out without the holiday actually being taken. But if the employee has received certain welfare benefits during the holiday year, the days when welfare benefits were received must be deducted from such holidays. With the amendment of the Danish Holiday Act, the welfare benefits are extended to also include interim pensions as well as a number of other benefits.  

The amendment will enter into force on 1 July 2010.


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