A broad majority in the Danish Parliament has reached an agreement on a new holiday law. The agreement is now being implemented through two new bills. One of these is a bill for a new annual leave law, which will affect the way in which employees accrue and take their annual leave. Under the proposed new annual leave legislation, employees will be entitled to take annual leave immediately after they have accrued the entitlement. This will, amongst other things, benefit those new to the labour market.
The second proposal currently being considered by the Danish Parliament involves freezing the employees' already accrued holiday allowance in a fund, which LD will be responsible for managing and administering. The need to freeze accrued holiday allowance arises because employees would otherwise have double holiday entitlements when the new Holiday Act comes into force in September 2020. To prevent companies from having to grant employees double holiday entitlement in 2020, the holiday entitlements already accrued and due are transferred to a fund. According to the draft bill, employers may, at their own discretion and as required, borrow the funds and thereby defer the date on which the money is to be transferred to the fund.
The holiday allowance, which is paid into the fund by employers, is paid out when the employee reaches state pension age or when the employee leaves the labour market. LD will have overall responsibility for the fund containing accrued holiday allowance, whilst ATP will assist with day-to-day administration, including collecting contributions from employers and making payouts to employees.
The Bill for a new Holiday Act (L116) and the Bill on the Management and Administration of Accrued Holiday Allowance Funds (L117) underwent their first reading in the Danish Parliament on 12 December 2017. Any political discussions will take place in January prior to the Act being passed.
Read the previous news item:
Broad agreement on new holiday legislation puts the Liberal Democrats at the helm of the transitional arrangements
See also:
Key facts about the transitional arrangement
L 116 Draft Act on Annual Leave
L 117 Bill on the management and administration of outstanding holiday allowance funds
