Even though vacation is something that happens annually, and the vacation law is clear, the provisions of the law are not always well known, neither among managers nor employees. The result can be misunderstandings, frustration, and perhaps even unnecessary conflicts.
In this article, we will take you through some common "holiday dilemmas" we encounter in Norwegian businesses, and what you should know to handle them well.
Dilemma 1: Who decides the holiday – employer or employee?
«"But I've already booked a trip south for the whole family in weeks 28 and 29?"»
–Peter
This is a common misconception related to vacation planning. Many employees believe that they decide when to take vacation, and as long as they submit their vacation request well in advance, it's fine. This is not automatically the case.
According to the Holiday Act, it is the employer who determines the timing of the holiday. However, it is crucial that the employer first discusses this with the individual employee or with the employee representatives. The manager must therefore discuss holiday wishes and plans with each employee, and the employee's wishes must be taken into account as far as possible. However, if you do not agree, or if everyone's holiday wishes cannot be met, the employer has the final say. Employees over 60 years of age, who have an extra holiday week, decide on this themselves. However, "senior week" must also be notified in advance.
Employees must be notified of the vacation plan well in advance, no later than two months before the vacation starts, unless there are special reasons preventing this.
What does this mean in practice? Petter, who has booked a trip to the south to visit his family without clarifying with his manager in advance, has unfortunately taken a risk. As an employer, you are not obliged to adapt to an already confirmed and paid trip. But many will probably go to great lengths to find a solution.
BUHR's advice: Establish clear deadlines internally for registering holiday requests and follow up on this so that the holiday plan can be made and announced in good time. This will reduce the chance of noise and conflicts, and ensure planned operations and deliveries throughout the summer based on available capacity. If there are many seniors over 60 years of age in the business, an internal agreement can be considered that the extra week will primarily be taken outside the summer holiday period.
Dilemma 2: I'm a bit broke right now – do I have to take a vacation?
«"I can't afford to take a vacation – I bought a new apartment and need to save money this summer."»
–Laila
Deductions from salary for vacation days and payment of earned vacation pay are perhaps the topic that causes the most confusion. Vacation is time off without pay, and therefore no pay is paid for the agreed vacation weeks. Vacation pay is not pay during the vacation – it is compensation for loss of pay. Vacation pay is earned in the previous calendar year (the accrual year). For practical reasons, many employers pay vacation pay all at once in June, at the same time as the pay for the vacation days is deducted.
What does this mean in practice? Employees sometimes do not understand that there is both a right and an obligation to take vacation. The Holiday Act actually states that, "employees are obliged to take vacation time every year". However, there are some exceptions: Employees who have not earned full vacation time the year before, employees who are on sick leave or who are on parental leave do not have the same obligation to take vacation time. When assessing the earning of vacation pay, both current and previous employers are included. If no vacation pay has been earned at all, the employee cannot be ordered to take vacation either. However, the fact that Laila has bought a new apartment and is in financial difficulty does not give her reason to skip vacation time for a year in order to save money.
BUHR's advice: Provide employees with good information about what vacation entails, both in terms of deductions from salary for vacation days and the payment of vacation pay. This should be repeated annually, preferably in the spring and well in advance of the month in which vacation deductions and vacation pay are included. All employees without full accrual, and all over 60 years of age, should be given information about the special rules that apply to them.
Dilemma 3: New employees – how much vacation are they entitled to?
«"I started in May – can I take three weeks of vacation this summer?"»
– Amina
A new employee who joined earlier this year can only claim vacation to the extent that the vacation has not already been used up with their previous employer.
Employees who have joined no later than September 30th are entitled to full vacation, while employees who join on October 1st or later are only entitled to 1 week of vacation (according to the Holiday Act). For those who have five weeks of vacation, the collective agreement or the company may have its own provisions for the four agreed days.
The new employee's right to holiday pay, however, is linked to what has been earned with the previous employer in the accrual year. A new employee who has not earned enough holiday pay to cover the loss of salary during the holiday cannot, as a general rule, be required to take more holiday than the holiday pay covers.
What can the employer do? Follow up on all new employees separately, before vacation planning and before the vacation period starts. Clarify with the individual what the status is for earning vacation pay the year in advance. If they have fully earned, they should initially plan a full vacation. Also make sure to clarify whether and how much of this year's vacation has been taken with their previous employer. As long as the vacation has not already been used up, Amina, who started in May, has the opportunity to submit a request for three weeks of vacation this summer.
BUHR's advice: Create a regular routine for providing information to all new employees about both the right to vacation days and about vacation deductions and vacation pay. With regard to earning vacation pay, new employees are potentially affected as early as February of the previous year - they may have reduced their vacation pay for this year's vacation. If the employment in your company is their first (after education or in a Norwegian company), it is particularly important to provide good information. This prevents unpleasant surprises for both parties.
Dilemma 4: Illness and vacation – when can vacation plans be changed?
«"I was sick for a whole week of my vacation – that can't count as vacation?"»
– Mary
It depends on several things, and there are two sets of regulations that govern this. But there is no limit to how long the illness lasted, one day of illness during vacation may be enough.
The Holiday Act gives employees the right to compensatory leave if they are unable to work (sick) during all or part of the holiday. However, there are some requirements:
The employee must have been 100 % disabled for work (child or spouse's illness will not meet the requirement).
To be entitled to sick pay, the employee must notify the employer of sick leave on the first day of absence, according to the company's normal routines - this also applies to holidays.
A medical certificate must be provided – self-certification is not sufficient.
The claim for compensatory leave must be made without undue delay. This means that the employee must notify the claim as soon as possible after the holiday.
Submission of a sick note/doctor's certificate alone is not enough; a verbal or written request for compensatory leave must be made.
An employee who is partially unable to work, i.e. on graded sick leave, may be ordered to take their vacation in the normal manner and as planned.
An employee cannot be denied compensatory leave if the conditions are met, but pay for sick days during the holiday depends on where the holiday was taken. The right to sick pay applies, according to the National Insurance Act, if the employee was on holiday in Norway or in another country in the EU/EEA area. In that case, the compensatory leave will be a holiday with pay. If the illness occurred on holiday outside the EU/EEA area, there is a right to compensatory days – but not with pay. In that case, a deduction will be made from the salary for the compensatory leave.
What does this mean for the business? The manager, or their deputy, must be prepared to receive notifications of sick leave even during the holiday period. However, the requirements must be met for the sick leave to trigger the right to compensatory leave for Maria. The manager must follow up if a claim for compensatory leave is made. HR and payroll must normally be informed.
BUHR's advice: Inform employees about the rules and requirements that apply – before the holiday period starts. A simple routine description for sick leave that occurs during the holiday can save a lot of discussion and frustration afterwards.
Dilemma 5: Remaining vacation and transfer – or payment?
«"We have several employees who haven't taken all their vacation this year - what do we do now? Can we pay them out?"»
– Leader
This is not an uncommon question at the end of the year. According to the Holiday Act, the employee and employer can agree in writing to transfer up to 12 working days of holiday to the following holiday year. Working days in the Holiday Act include Saturdays. When we talk about a 5-day week, there are 10 holiday days that can be agreed to be transferred. If the company has five weeks of holiday, four days are agreed in addition to what the Holiday Act provides. You can set the rules for these four agreed holiday days yourself. They can be transferred in addition to the 10 days that the Holiday Act allows for transfer.
Before the employment relationship is to be terminated, the employer is not entitled to cancel any statutory holiday days and pay them wages. This applies even if the holiday days have not been taken due to illness or parental leave. The four contractual days that many have, however, can be paid out, as long as the agreement on five weeks of holiday does not restrict this.
What can the employer do? Provide clear information and communication, and follow up to ensure that as much vacation as possible is planned. And what happens on December 31st when Piotr has more unused vacation days left than can be transferred? They must also be transferred. The Holiday Act does not allow for anything else – the main rule is to cancel the vacation days, or transfer them.
BUHRS advice: Keep track of vacation balances throughout the year, preferably monthly after the summer, and ensure that Piotr and other employees plan and complete the remaining vacation. Managers who will follow up on vacation planning must be confident in the rules and how they can use the right to control, if necessary. At the same time, deliveries and activities must be planned so that it is possible to take vacation.
Good communication and planning are key
The vast majority of holiday dilemmas can be prevented with three simple measures:
Early planning: Start the holiday dialogue and information well in advance, preferably at the beginning of the new year, and no later than a few months before the summer holiday period starts. Include the holiday planning in the annual cycle, bring it up in management meetings and send out reminders.
Clear communication: Make sure that both managers and employees are aware of the applicable rules and the company's internal procedures. An updated personnel handbook and/or procedure description provides good support and guidance. A little extra information and follow-up helps those who are new employees.
Good internal routines: Establish written procedures for vacation planning and approval, illness before and during vacation, and handling of remaining vacation. Management training and support provide security when the routines are to be put into practice.
Does your business need help establishing these routines – or training and tools for managers? Contact us at BUHR! We are used to applying the Holiday Act and provisions on holidays in collective agreements and internal guidelines. We are ready to help you with good templates and routines for holiday planning, or handling specific cases and issues.
