In January 2018, the Danish Parliament passed a new holiday law which means that, from September 2020, employees will be able to receive their holiday pay at roughly the same time as they accrue their holiday entitlement – a scheme known as ‘concurrent holiday pay’.
To ensure that, under the new Annual Leave Act, holiday pay accrued in previous years and holiday pay accrued under the new Act are not both paid out within the same year, the Danish Parliament passed the “Act on the Management and Administration of Accrued Holiday Allowance”. Under this Act, holiday allowance funds accrued during a transitional year from 1 September 2019 to 31 August 2020 are paid into a fund.
The purpose of the Act is both to secure employees’ holiday allowance and to allow employers to retain such holiday allowance until it becomes due for payment. To achieve this, it was decided to establish the Employees’ Fund for Accrued Holiday Allowance – commonly known as the Employees’ Holiday Allowance Fund – as a separate financial entity within Dyrtidsfonden. The fund is responsible for payments, management and payouts.
The Holiday Allowance Fund falls within the remit of the Ministry of Employment, and the Danish Financial Supervisory Authority is responsible for ensuring that the fund complies with the regulations governing the management of its assets.
