Holiday and holiday pay in employment is governed by the Norwegian Act relating to Holidays (the Holiday Act). The act applies to “persons who work in the employment of others”, i.e. employees. The purpose of the act is to ensure that employees get annual holidays and holiday pay.
1 Length of holiday
According to the Holiday Act, employees are entitled to 25 working days’ of leave annually. The Holiday Act counts Saturdays as working days, which in fact means that employees are entitled to 4 weeks and one day of holiday. It is not allowed to agree that the employee is entitled to a shorter holiday than this. Employees who reach the age of 60 during the holiday year are entitled to an additional week of holiday pursuant to the Holiday Act.
The right to full holiday is conditional upon commencement of the employment before 30 September in the relevant year. Employees who commence the employment after 1 October are entitled to one week of holiday, provided that the employee has not already taken full holiday at another employer previously in the holiday year.
The Holiday Act distinguishes the right to holiday and holiday pay. Employees are entitled to annual leave regardless of whether he or she has earned the right to holiday pay. However, employees may refuse to go on holiday leave if the holiday pay does not compensate for loss of payment due to the holiday.
The normal length of 4 weeks and one day of holiday is for many employees extended to five weeks through collective agreements or individual employment agreements.
The holiday dates shall be discussed between the employer and the employee or his representative in good time before the holidays. If agreement is not reached, the employer fixes the holiday dates within the limits of the Holiday Act. Unless otherwise agreed, employees over the age of 60 decide when they wish to take their extra week of holiday.
The employee may demand to be notified of the fixed holiday dates as early as possible, and at latest 2 months before the holiday begins. This does not apply if the employer is prevented from giving such notification due to special grounds. Employees over the age of 60 shall give the employer at least 2 weeks’ notice before taking the extra holiday week.
Employees are entitled to take three consecutive weeks of holiday during the main holiday period, which is 1 June to 30 September. This is not applicable for employees who commence the employment after 15 August in the holiday year. Employees may demand to take the remaining holiday consecutive within the holiday year, i.e. either in the period between 1 January to 31 May, or between 1 October to 31 December. However, this does not apply to the remaining 4 days of the fifth holiday week provided by a collective agreement or individual employment contract.
Fixed holiday periods cannot, as a starting point, be changed by the employer unless the employee consents. Fixed holiday periods can only be changed by the employer if this is necessitated by unforeseen events, and taking of the fixed holiday would cause significant operating problems, and when no placement can be found for the employee. What constitutes a “significant operating problem” must be assessed individually in each case, and the threshold is generally high. The employer must discuss the change with the employee before the decision is taken. The employee can claim compensation for documented additional expenses resulting from the change.
An employee who is on holiday leave does not perform work, and is thus not entitled to salary. The purpose of the holiday pay arrangement is to compensate for this loss, and to ensure that employees can afford to go on holiday leave.
Holiday pay is calculated on the basis of salary paid to the employee in the previous calendar year. This means, for example, that people who have graduated and commences a position in January will not be entitled to holiday pay. However, he or she is nevertheless entitled to go on holiday leave in accordance with the provisions of the Holiday Act, even though he or she is not entitled to holiday pay.
All monetary benefits, including salary, overtime payment, shift allowance and bonus, shall be considered as salary. However, reimbursement of expenses for car maintenance, travel expenses, board and lodging expenses and the like are not included. Nor shall holiday pay and benefits in kind be included.
The ordinary holiday pay rate according to the Holiday Act is 10.2 % of the salary paid in the previous calendar year. The rate is increased to 12 % for employees who are entitled to five weeks of holiday pursuant to a collective agreement. The same normally applies to employees who have five weeks of holiday pursuant to an individual employment contract.
The extra week of holiday for employees over the age of 60 is financed by increasing the general holiday pay rate by 2.3%. The increased rate only applies to income up to 6 times the basic amount of the National Insurance Scheme (G).
The main rule in the Holiday Act is that holiday pay shall be paid the last regular payday before the holiday, and no later than 1 week before the holiday commences. However, in practice, most employers make the holiday payments in June. When the payment of holiday pay is made, the salary for the holiday days that will be taken out that year is deducted. When the employee goes on holiday leave, regular salary (without deduction) is paid instead of holiday pay.
Employees who are completely incapacitated for work before the holiday commences may demand to postpone the holiday until later in the holiday year. The demand must be supported by a medical certificate and be submitted at the latest on the last working day the employee would have worked before the holiday.
Employees who are completely incapacitated for work during the holiday may demand to have a corresponding number of working days of holiday postponed and given as a new holiday later in the holiday year. The demand must be supported by a medical certificate and be submitted without undue delay after the employee’s return to work.
Only the employee’s own illness triggers the right to postpone the holiday. Illness in the close family, for example the employee’s children, does not trigger the right to postpone the holiday. Furthermore, only employees who are completely incapacitated for work may claim postponement. The reason for this is that the holiday will not give the employee rest and recreation in such circumstances.
The employee and the employer can in writing agree to transfer up to 12 holiday days to the following holiday year. Thus, the employee cannot claim transfer of holiday unilaterally - the employer must agree to this.
Holidays which have not been taken out by the end of the holiday year due to illness or parental leave, shall be transferred to the following calendar year.
An employer may not without the consent of the employee fix holidays to periods of leave during which parental benefit is being paid pursuant to the Norwegian National Insurance Act. However, many employees wish to go on holiday leave in connection with the parental leave. If the employee goes on holiday during the parental leave, the parental leave is interrupted for as long as the employee is on holiday, and continues after the holiday.
This applies correspondingly to payment of parental benefit - the payment is suspended during the holiday, but the employee will receive holiday pay instead. The payment of parental benefit will continue after the holiday, and is extended with the length of the holiday.
The rules regarding taking of holiday during the period of notice vary, depending on whether the notice is given by the employer or the employee.
An employer may not without the employee’s consent fix the employee’s holiday to the period of notice if notice is given by the employer, unless the period of notice is 3 months or longer. The employee may therefore choose to work during the period of notice. However, if the period of notice is 3 months or longer, the employer may claim that the employee goes on holiday leave during the period of notice. The reason for this is that the employee will have sufficient time to adjust to the employer’s demand if the period of notice exceeds 3 months. However, the provisions of the Holiday Act regarding the fixing of the holiday dates must be followed.
If notice is given by the employee, the holiday can be fixed and taken out in accordance with the general rules described above.
Regardless of whether the employee or employer gives notice, fixed holiday cannot be changed due to the notice, unless the terms for changing the holiday are fulfilled. The employee may also consent to change fixed holiday days after notice is given.
Earned holiday pay shall, as a general rule, be paid the last normal payday before the post is vacated. However, the employer and the employee may also agree that the payment shall be made the following calendar year.
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Homble Olsby have extensive experience in assisting employees and employers with questions about holiday leave and holiday pay.