The Holiday Allowance Fund is a new fund that will manage employees’ holiday pay in connection with the transition to the new Danish Holidays Act, which came into force on 1 September 2020. The new fund meets the needs of both employees and employers. It safeguards employees’ holiday allowances and, furthermore, allows employers to retain the funds for as long as necessary – at least until the individual reaches retirement age.
All employees were required to report their frozen holiday entitlement (up to 5 weeks’ holiday) upon the transition to the new Holidays Act in 2020, provided they had been employed at any time during the period from 1 September 2019 to 31 August 2020.
Holiday Allowance Fund
The holiday allowance will be managed by the Holiday Allowance Fund. The fund’s assets consist partly of contributions paid into the fund by employers and partly of assets which employers may choose to retain within their company as a loan.
The assets paid into the fund will be invested by the fund in the financial markets, whilst the assets borrowed by the employers and held by the company must be indexed at an interest rate corresponding to wage growth.
Early disbursements
On two occasions, the COVID-19 crisis has led to a political decision to make early disbursements from the Holiday Allowance Fund. The first time was in autumn 2020 and the second time in spring 2021.
A total of DKK 108 billion has been reported to the Holiday Allowance Fund, and following both early disbursements, DKK 20 billion remains in the Holiday Allowance Fund.
