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Factsheet for measure DK-2020-40/1471 Updated – measures in Denmark

Payment of holiday funds

Udbetaling af indefrosne feriemidler

Country Denmark , applies nationwide
Time period Temporary, 01 October 2020 – 31 May 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Promoting the economic, labour market and social recovery
– Support for spending, stimulus packages
Author Carsten Jørgensen and Maria Hansen (FAOS, University of Copenhagen), Anders Randrup (Oxford Research) and Eurofound
Measure added 26 November 2020 (updated 19 July 2021)

Background information

As part of a larger government economic stimulus package in response to the coronavirus crisis, it has been possible to get three weeks of the holiday funds. The first political agreement released three weeks of paid holiday funds, while the second agreement on 2 December 2020 released the remaining holiday funds which makes a total of five weeks of holiday funds.

Due to a new Holiday Act, which allows employees to take paid holidays in the same year as they occurred, there have been a transition from 1 September 2019 to 31 August 2020. The holiday money that employees earn during the transition year has been converted into savings in the new fund, Wage earners Holiday Pay (in Danish: Lønmodtagernes Feriemidler ). As stated in the new Holiday Act the employees would have these savings paid out when they reach the state pension age. However, due to the coronavirus it has been possible to get the holiday funds before the pension age.

Content of measure

In Denmark, employees are entitled to five weeks paid holiday per year. ‘Holiday funds' or in Danish feriepenge is a monthly contribution paid out of the employee's salary into a special fund, depending on the level of earnings.

Employees could apply for three weeks of holiday funds in the period from 1 October 2020 to 1 December 2020 as part of the first political agreement. The payment is the equivalent of approximately 12.5% of the employees holiday entitled pay in the period from 1 September 2019 to 31 March 2020.

Approximately 3 million people have holiday savings corresponding to approximately DKK 60 billion.

Following a new political agreement on 2 December 2020, employees can now apply for the remaining period (two weeks) of holiday funds. It is stated in the political agreement that the payment must take place from March 2021, which is the earliest possible time when the remaining holiday funds can be calculated and paid out.

Updates

The following updates to this measure have been made after it came into effect.

24 March 2021

In order to further boost the economy, the remaining two weeks of the frozen holiday pay became available from this date. In total Danish employees can receive up to DKK 56 billion, if all apply. The application period ends on 31 May 2021.

Use of measure

It is possible to get the holiday funds from 1 September to 1 December 2020. By 29 September 1,153,500 people have claimed their holiday funds. It is estimated to correspond to a total of just over DKK 25 billion out of a total of DKK 60 billion, which can be paid out.

For the remaining two weeks of holiday funds the application period was 24 March to 31 May 2021. On 17 May 2021 more than 2 million employees have ordered their two weeks of frozen holiday pay amounting to over DKK 34 billion being sent for payment. The final number is not available.

Target groups

Workers Businesses Citizens
Applies to all workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
Employees

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A

Involvement

Not relevant.

Views and reactions

The social partners have been supportive to release the holiday funds to stimulate the economy.

Sources

  • 26 November 2020: Fra i dag kan man bestille de indefrosne feriepenge (bm.dk)
  • 24 March 2021: Fra i dag kan man bestille de sidste feriepenge – i alt 56 mia. kr. (bm.dk)
  • 17 May 2021: Over 2 millioner lønmodtagere har bestilt deres indefrosne feriepenge – 34 milliarder kroner er allerede sendt til udbetaling (bm.dk)

Citation

Eurofound (2020), Payment of holiday funds, measure DK-2020-40/1471 (measures in Denmark), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DK-2020-40_1471.html

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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.