The new Danish Holiday Act · New Danish Holiday Act 2018 1 January accumulation of holidays 2019 1 January 2020 2021 2022 1 January 1 January 1 January 1 January 1 January 1 September

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The new Danish Holiday ActWhat you as employers need to know2019

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Typografier 1. Niveau = Punktliste Grøn bold 21 pkt2. Niveau = Punktliste Sort bold 18 pkt

3.- 5. Niveau = Punktliste Grå 14 pkt

Programme● Intro

● Overview – wage earners and employers

● Reporting during the transitional year

● Contributions to Lønmodtagernes Feriemidler

● Plan for Lønmodtagernes Feriemidler

● New deadlines for reporting and contributions

● Other changes in the Danish Holiday Act

● Summary

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New Danish Holiday Act

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Contributers

● The Ministry of Employment

● The Danish Agency for Labour Market and Recruitment

● The Danish Employers Union (DA)

● The Union of Danish Employees (FH)

● LD Fonde (LD)

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A new Holiday Act will enter into effect on 1 September 2020

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September January September January

Accrual 12 months

16 months

Accrual

September January

Holiday Holiday

AccrualAccumulation of holidays

2020 2021 2022

1 January

Taking holiday

1 May 1 May

1 January

1 September

1 September

1 September1 September


12 months

16 months

1 September

1 September

1 January

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Typografier1. Niveau = Grøn bold 21 pkt

2. Niveau = Grå bold 18 pkt3. Niveau = Grå regular 18 pkt

4. Niveau = Punktliste 14 pkt5. Niveau = Punktliste 14 pkt

For at få korrekt typografi /punktopstilling

brug ‘Forøg listeniveau’

For at komme tilbage, brug ‘Formindsk listeniveau’

New Danish Holiday ActTransition year

Transition to the new Holiday Act

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2018

1 JanuaryAccumulation of holidays

2019

1 January

2020

1 September

2021 2022

1 January

Taking holiday 1 May 1 May

1 January 1 January 1 January 1 January

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1 September

1 September

1 September1 September 1 September


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Lønmodtagernes Feriemidler

● New fund administered by The Employees’ Capital Pension Fund (LD)● Manages the holiday pay from the transition year● You are not permitted to pay out holiday pay for the transition year to your employees

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● New fund administered by Lønmodtagernes Dyrtidsfond (LD).

● Manages the holiday pay from the transition year.

● You are not permitted to pay out holiday allowance for the transition year to your employees.

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Overview

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This is what the new Danish Holiday Act means for wage earners● All wage earners will continue to accumulate 2,08 days per month

– except now it will be from 1 September to 31 August the year after.

● The holiday can be taken immediately after it has been accumulated from 1 September to 31 December the year after.

● In the holiday year from 1 May to 31 August 2020, there are 16,64 days that can be used for holidays.

● Those who are new to the labour market can apply for up to 8,4 days of holiday pay paid out from Lønmodtagernes Feriemidler.

● Holidays accumulated from 1 September 2019 to 31 August 2020 will become savings in the new fund, Lønmodtagernes Feriemidler.

● As a general rule, Lønmodtagernes Feriemidler pays out the savings to the wage earner when they reach the state retirement age.

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This is what the new Danish Holiday Act means for employersFrom 1 September 2019

● Holiday pay must be reported as pre-tax figures to Feriepengeinfo if you are paying it directly to the employee.

From 1 September 2019 - 31 August 2020

● Holidays must be reported for all employees – also for those with holiday pay.

● You are not permitted to pay out holiday pay accumulated during this period.

From 1 September 2020

● New deadlines for reporting to Feriepengeinfo and FerieKonto and making contributions to FerieKonto and ‘feriekasser’.

● New contribution method for FerieKonto

● New rules for payment and transfer of holidays after 1 September 2020.

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Reporting during the transitional year1 September 2019 - 31 August 2020

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Report for everyone in the transition year

Hourly paid and dismissed/resigned employees in FerieKonto

Hourly paid and dismissed/resigned employees in Feriepengeinfo

Salaried employees in continuing employment

Lønmodtagernes Feriemidler

Reporting deadline31 December 2020

FerieKonto

Feriepengeinfo

31 December 2020Automatic transfer

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eIndkomst (eIncom

e)

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Changes made after the deadline require the consent of the wage earner

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Two general types of employeesHourly paid:

● Employees who do not receive salary during holiday.

● Accumulates holidays that are reported on an ongoing basis to FerieKonto or Feriepengeinfo.

● The employee must apply for their holiday allowance from Feriepengeinfo/FerieKonto before taking leave.

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Salaried:

● Employee with paid holiday.

● Accumulates holidays that are only reported to FerieKonto or Feriepengeinfo upon dismissal/resignation as one-time reporting.

● The employee should only apply for holiday allowance via Feriepengeinfo/FerieKonto if he or she has already left the job where the holiday was accumulated.


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Two types of salaried employees during the transition year

Dismissed/resigned salaried employee:

The employee stops working between1 September 2019 - 31 August 2020.

Reported to Feriepengeinfo/FerieKonto.

Holiday pay for employees who are hired from 1 September 2020 should not be reported to Lønmodtagernes Feriemidler.

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1 September 2019 31 August 2020


Salaried employee in continued employment:

The employee is employed at the same placebefore and after 1 September 2020.

Reported to Lønmodtagernes Feriemidler.

31 August 2020 1 September 2020

Monday Tuesday

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Pay period Pay period

20202019

Pay periods

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1 January 1 January

● Holiday pay that has been accumulated from 1 September 2019 to 31 August 2020 must be reported to Lønmodtagernes Feriemidler.

● It is the end date for the pay period that determines whether the reporting should be to Lønmodtagernes Feriemidler or not.

Transition year

1 September 2019 1 September 20201 January 1 January

1 September 1 September

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What do you need to report for the transition year?Hourly paid employees

● You must report to FerieKonto or Feriepengeinfo as usual

● FerieKonto or Feriepengeinfo will automatically transfer reports for the transition year to Lønmodtagernes Feriemidler.

Dismissed/resigned salaried employees - from 1 September 2019 ● You must report to FerieKonto or Feriepengeinfo, where you state the accumulation year 9999 for the periods that concerns the

transition year.

● FerieKonto or Feriepengeinfo will automatically transfer reports for the transition year to Lønmodtagernes Feriemidler.

Salaried employees in continuing employment as of 1 September 2020 ● 12.5% of the salary that qualifies for holiday pay (this includes holiday supplements)

● You must report directly to Lønmodtagernes Feriemidler in new fields in eIndkomst (eIncome)

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Transition

Changes to the tax rules

Hourly paid employees and dismissed/resigned salaried employeesFeriepengeinfo, where ‘feriekasse’ will pay, and FerieKonto: holiday allowance after tax

Hourly paid employees and dismissed/resigned salaried employeesFeriepengeinfo, where the employer is paying: holiday allowance after tax

Hourly paid employees and dismissed/resigned salaried employeesFeriepengeinfo, where the employer is paying: holiday pay before tax


2018

1 January

accumulation of holidays 2019

1 January

2020 2021 2022

1 January 1 January 1 January 1 January 1 January

1 September 1 September 1 September


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Salaried employees in continuing employment.Lønmodtagernes Feriemidler: holiday pay before tax

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What needs to be reported before and after tax, respectively?From 1 September 2019

Employee Collective agreement Payer Holiday pay

Hourly paid employees and dismissed/resigned salaried employees

No FerieKonto After tax

Yes ‘Feriekasse’ (via Feriepengeinfo) After tax

Yes Employer (via Feriepengeinfo) Before tax

Salaried employee in continuing employmentOnly during the transition year

Yes/No Lønmodtagernes Feriemidler Before tax

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NEW

NEW NEW NEW


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Reporting instructions

Get help and instructions for reporting from:

● Payroll systems provider● Payroll service agency● eIndkomst (eIncome) instructions from the Danish

Customs and Tax Administration

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Contributions to Lønmodtagernes Feriemidler

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Holiday pay for the transition yearThree options for paying to Lønmodtagernes Feriemidler:

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Pay the entire amount for the transition year to Lønmodtagernes Feriemidler as a lump sum, in 2021. NOTE: You must, however, pay

the holiday allowance reported to FerieKonto or a ‘feriekasse’ as usual by the usual deadlines.

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Keep the money in return for an annual index regulation, and pay as the employees have the savings paid to them.

A combination, where you pay for some employees but not for others. You can do this every year.


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Lønmodtagernes Feriemidler makes an annual account of what must be paid

The money is due for payment when the employee, for example:

● reaches the state retirement age

● dies

● leaves the country, early retirement pension, disability pension.

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Lack of payment to Lønmodtagernes Feriemidler● All holiday funds are due for payment if the employer:

● does not pay the due holiday funds

● did not state that it wanted to keep holiday funds not due for payment.

● In the event of lack of payment, the fund will transfer the total claim to Lønmodtagernes Garantifond (LG) who will then pay the holiday funds to the fund.

● LG will continue the claim and collection process for the employer’s owed amounts.

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Break

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Administration fee to Lønmodtagernes Feriemidler

● Samlet Betaling (Combined Payments) will collect an administration fee for Lønmodtagernes Feriemidler.

● This is collected from all companies that have reported ATP contributions.

● The size of the fee is 28kr pr year pr employee.● The first collection will be for Q1 2019 and will be due for

payment in July 2019.

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Plan for Lønmodtagernes Feriemidler● June 2019: The first collection of the administration fee

from Samlet Betaling – after this, on a quarterly basis.

● September 2019: Start of the transition year.

● August 2020: End of the transition year.

● November 2020: Employer’s verify their reporting.

● December 2020: Final deadline for employer’s reporting.

● February 2021: Employees verify their reports.

● June 2021: Indexing of holiday funds.

● July 2021: First collection of due holiday funds.

● September 2021: Deadline for paying due holiday funds and deadline for stating that you want to keep the money in the company.

● October 2021: First payment from Lønmodtagernes Feriemidler.25

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2019

June September

2020

November December

2021

February June September

August


July October

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Calendar wheel for Lønmodtagernes Feriemidler

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JulyAnnual collection for employer+ account balance statement for wage earner

1 September Deadline for payment of amounts due and if you wish to keep the balance in the company.

JuneIndex regulation of funds kept by employer.

The whole yearPayments to wage earners.

Collection, in case of liquidation or bankruptcy.

Voluntary employer contributions.


After 1 SeptemberCollection in the event of lack of payment or failure to state that one wanted to keep the money in the company.

• *Ongoing collection when employer stops

• *Ongoing payment for wage earner

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New deadlines for reporting and contributions from 1 September 2020

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New deadlines after 1 September 2020

● Holiday pay must be available to the wage earner as quickly as possible after accumulation.

● The deadlines for reporting holiday pay in relation to the accumulation period will be shortened.

● This also requires shorter deadlines for contributions of holiday allowance to FerieKonto.

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Reporting deadline for dismissed/resigned salaried employees

2929

1 March 1 April

Dismissal/resignation 31 March

Deadline for reporting 31 March

Deadline: Last working day of the month of dismissal/resignation


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Reporting deadline for hourly paid employees

3030

1. 30.15.

Deadline for reporting

The end of the month

Deadline for reporting15th of the following month

Deadline for reportingLast day of the month

1.31. 15.

End of pay period End of pay period

Deadline: The last day of the half month in which the salary period ends + 1/2 month


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Ny deadline for contribution and new channel for FerieKonto

● The deadline for contributions is the same day as the deadline for reporting.

● This means:

● There will be no more collections

● There will be no more Betalingsservice

● On or more new contribution channels

● Infoservice/overførselsservice can still be used,once the payroll system providers adjust their payroll systems.

● NOTE: If you do not use FerieKonto or a ‘feriekasse’ (holiday fund) then you must be prepared to pay the holiday pay to your employees more quickly.


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Other changes in the Danish Holiday Act

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Changes to certain payment and transfer rules There will no longer be automatic payments of small amounts

● There will no longer be automatic payments of amounts under DKK 1,500 at the start of a holiday year

● There will no longer be automatic payments of amounts under DKK 2,250 at the end of a holiday year

● There will no longer be automatic payments of amounts under DKK 750 upon dismissal/resignation

In future, leave that could not be taken can only be transferred – not paid out● However, it is possible to have leave that could not be taken due to illness or maternity/paternity leave transferred from

previous holiday periods, paid out.

Fifth holiday week● The wage earner can apply to have leave exceeding the fourth week paid out or transferred from the end of the holiday year

(31 August)

● The fifth week must be automatically paid out if not taken, transferred or paid out by the 31 December.33


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Administration fee for FerieKonto

● “Samlet Betaling” will collect an administration fee for FerieKonto.

● This is collected from all companies who have reported to FerieKonto.

● The collection depends on the number of employees the employer has reported to FerieKonto in the last quarter.

● The size of the fee has not yet been specified.● The first collection will be for the last quarter of 2020 and will

be due for payment in April 2021.

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The guarantee schemes must be registered in Feriepengeinfo

● Companies that report to Feriepengeinfomust be covered by a guarantee scheme.

● It is the guarantee scheme that must notify Feriepengeinfoof which companies they are guaranteeing for.

● If there is no guarantee scheme for the company in Feriepengeinfo, then you must either ask the guarantee scheme to fix this or move your reporting to FerieKonto.

● If a company goes bankrupt, the guarantee scheme will automatically be specified as the payer in the wage earners accounts.

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Important deadlines

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Get help with reporting and making contributions via:

● Payroll system provider● Payroll service agency● eInskomst (eIncome) instructions from the

Danish Tax Agency

Important deadlines

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Report holiday pay/allowance for all employees.

New rules for tax when reporting holiday pay – also after the transition year.


The transition year begins

1 September 2019

The new Danish Holiday Act begins

New deadlines for reporting to Feriepengeinfo and reporting and making contributions to FerieKonto.

New payment channel for FerieKonto.

1 September 2020

Reporting deadline

Deadline for reporting in the transition year to Lønmodtagernes Feriemidler.

31 December 2020

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Virk.dk/ny-ferielov

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Newsletters on Virk.dk fromFerieKonto and Feriepengeinfo


Documents

The new Danish Holiday Act · New Danish Holiday Act 2018 1 January accumulation of holidays 2019 1 January 2020 2021 2022 1 January 1 January 1 January 1 January 1 January 1 September