The new Danish Holiday Act has no doubt raised many questions from both employees and companies, and the start of a new holiday year on 1 May 2020 is no exception.
What happens on 1 May 2020?
On 1 May 2020, we enter a new holiday year, and with it a new phase in the transition to the new Holiday Act.
Holiday year 2019 is different from what we're used to, with a shorter period for taking holiday. So it's with good reason that holiday year 2019 has come to be called the mini holiday year.
The employee has 16.64 days of holiday ‘released’, provided they were fully employed in the period from 1 January 2019 to 31 August 2019, or 2.08 days of holiday accrued for each month of employment in the period.
As mentioned, the period for taking holiday is shorter in the mini holiday year, and holiday must be taken in the period from 1 May 2020 to 30 September 2020. It's important to note that days of holiday not taken in this period are automatically transferred to the new Holiday Act.
What does the company need to do before 1 May?
Each company must decide on transferring days of holiday from holiday year 2018 to holiday year 2019 (the mini holiday year) under the rules of the Holiday Act.
If the employee has days of holiday left in holiday year 2018, which ends on 30 April 2020, the company must therefore decide whether unused holiday is to be transferred to the mini holiday year or not.
In Zenegy, it's easy to automate processes, and the company's holiday settings are no exception.
The company's holiday settings are defined on the company profile, My company > Salary and bank.
Important to note!
If the company doesn't make any changes to the holiday settings before 1 May 2020, the default settings apply, i.e. holiday from holiday year 2018 is transferred to holiday year 2019.
Payment of holiday allowance
If you have employees who are paid during their holiday, then besides getting their normal pay during holiday they accrue a holiday allowance of 1% of their holiday-entitled pay. This allowance is typically paid with the April pay, so the money is available before a new holiday year begins.
Holiday allowance is paid with a pay run in Zenegy. The account with the accrued holiday allowance is then emptied and paid out with the current pay run.
What you need to do as a company
Payment of holiday allowance is chosen when you start the month's pay run. Choose ‘Advanced options’ at the start of the pay run – where you define the dates for the pay and the pay's disposition date > Select ‘Pay out holiday allowance’ and Continue.
(If you see a different screen when you want to start a pay run, it's probably because you've already started your payroll journal. Go back to the start of the pay run using the arrow just below the Zenegy logo in the left corner).
All employees with accrued holiday allowance will then have it paid with the current pay run.
Holiday allowance above 1%
When an employee has saved more than 1% in the transition period, the amount has been moved to the free choice account, which the employee can see on their payslip, bottom right, on the line Free choice balance.
If no one in the company other than those with more than 1% in holiday allowance has free choice, you should also select ‘Pay out free choice’ under ‘Advanced options’ in the same place at the start of the pay run. That way, all the free choice savings are paid out.
If the employee normally has free choice, you need to pay the holiday allowance above 1% in a different way, so you only pay the amount that applies to holiday allowance above 1%:
In the pay run, click into the employee and then into the ‘AM pension’ menu. At the bottom of this menu, you'll find the ‘Pay out free choice’ box, where you enter the part of the balance that is the holiday allowance share.
Extra days off – do they follow the calendar year or the holiday year, and what do you do about 1 May?
If you have employees with extra days off, you can choose in Zenegy whether the accrual and the period for taking them follow the calendar year or the holiday year. Find your setting for extra days off under My company > Salary and bank.
If the company follows the calendar year and will continue to do so, nothing changes.
If the company has the current holiday year – accruing and taking extra days off from 1 May to 30 April – and still wants to continue with it, nothing changes either.
Although extra days off aren't covered by the new Holiday Act's rules, many choose to move the current holiday period to the new holiday period (from 1 September to 31 August) for practical reasons. If you're covered by collective agreements or local agreements, the decision on accruing and taking extra days off may have been made there.
As holiday year 2019 is a mini holiday year, there are different options for moving from the current holiday period to the new one. It's important to note that the examples below are just some of the ways it could look. Companies with employees on a collective agreement with extra days off must check the announcement on extra days off in the mini holiday year themselves.
Some companies have chosen a ‘short’ transition period of 4 months, in which extra days off follow the new holiday period from 1 September 2020. In the period from 1 May 2020 to 31 August 2020 (until the new Holiday Act period begins), the employee accrues 4/12 of their extra days off. So with 5 extra days off a year, you accrue 1.67 days in the mini holiday year. And after that, 5 extra days off per holiday year from 1 September 2020 (1 September – 31 August).
Others choose the ‘long’ transition period, with a transition year of 16 months from 1 May 2020 to 31 August 2021. So with 5 extra days off a year, you accrue 6.67 days in the extended period. And after that, 5 extra days off per holiday year from 1 September 2021 (1 September – 31 August)
What must the company do to change the number of days accrued for the holiday period?
Whether the company is to follow the short or the long transition period for extra days off, the days can be allocated to all employees quickly and simply with our ‘Global values’ feature.
Go to My company > Global values > Create.
Name – give the global value you're creating a nickname. We've chosen Extra days off, short period. Fill in ID, Type > Extra days off, Number of days to be allocated to employees – we've chosen the short period, so the number of days is 1.67.
Select all the employees in the company who are to be allocated extra days off, or just some departments, and click Save.
The global value for extra days off has now been allocated to all the employees selected in the overview and will apply. You can also see it under the employee's salary profile > Holiday and care days.
