The frozen holiday pay that employees have saved up during the transition period is expected to be paid out from October.
Here we go through the rules for the payout and what you, as a business owner or payroll administrator in Zenegy, need to be aware of.
As you know, the frozen holiday pay was earned during the transition period from 1 September 2019 to 31 August 2020. An employee who has been in paid work for the whole period will have saved up 5 weeks' holiday, which under the original rules was to be paid out when the employee leaves the labour market.
This summer, a bill was passed on paying out 3 weeks of frozen holiday pay, which gives all employees with holiday savings the option of applying for a payout.
Lønmodtagernes Feriefond handles the holiday pay and pays it out. Some of the practical details of the payout have not been settled yet, but employees are expected to be able to apply via borger.dk in the period from October to 1 December 2020.
How much will my employees be paid?
Each employee is free to apply for a payout. If the employee chooses to leave the savings where they are, the holiday pay will be paid out at state pension age, or when the employee leaves the labour market for other reasons.
It is natural to be curious about the amount that will be paid out when you have applied for 3 weeks' holiday pay – so quite a few employees may turn to the various calculators that can now be found online.
Here, though, it is important to know about the factors that affect the balance saved during the transition period, and ultimately the holiday pay that is paid out.
Employment during the period
The savings for the 3 weeks of frozen holiday pay relate to the period from 1 September 2019 to 31 March 2020. If the employee has only been in paid work for part of the period, this will affect the savings, which are calculated from the holiday-entitled pay in the period.
New to the labour market
During the transition period, employees new to the labour market could borrow holiday days in advance (fondsferiedage) from Lønmodtagernes Feriefond. In that case, the employee's holiday pay will be reduced in the payout of the frozen holiday pay that can be applied for from October.
The employee's overview of holiday balances
Zenegy reports holiday balances on an ongoing basis. This means that Zenegy customers can see the current holiday balance saved during the transition period on borger.dk and in Zenegy’s employee app.
However, far from all employees can see their saved holiday funds on borger.dk.
This depends largely on the choice of payroll system and on how the reporting has been handled. If a company chooses to report saved holiday balances at the reporting deadline in December 2020, there will be no overview on borger.dk at this point.
If your company switched from another payroll system to Zenegy during the transition period, we recommend checking the balances in eIncome and reconciling them with the amounts in Zenegy. If they don't match, the person responsible for payroll in the company should contact the provider of the old payroll system and clarify whether they will handle the missing reporting.
