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The holiday year is coming to an end for companies applying Sweden's Annual Leave Act and all holiday must be taken before the last day of March. For companies using the calendar year as the holiday year, calculations are currently well underway for the holiday year that ended at the end of December. Regardless of which holiday agreement your company applies, as an employer, it is a good idea to check your employees' holiday days to ensure that they have been taken as planned.
Sometimes, things happen during an employee's holiday that affect the number of holiday days used. For example, an employee might fall ill during their holiday and decide not to take it as planned holiday. If your employees do not take their holiday days, or if you as an employer fail to comply with the Annual Leave Act or your collective agreements, you risk incurring penalties, which can prove costly.
Moreover, holiday owed comprises a major cost for you as an employer. It is primarily during the summer that you have the chance to actively work to reduce this, although it is possible that employees have not been able to take their holiday during the summer or choose to take it later in the year. Accordingly, it can be smart to look into holiday owed and outstanding holiday days well in advance of the end of the holiday year.
What does the Annual Leave Act say about leave?
Under to the Annual Leave Act, employees are entitled to twenty-five (25) days of leave, as well as the opportunity to take four consecutive weeks of holiday during the period 1 June to 31 August. Holiday planning should take place in consultation with your employees, although in the event of disagreement, the employer always has the right to decide. Read more about the Annual Leave Act and what you should know.
As an employer, you are obligated to ensure that your employees take at least twenty (20) days of holiday each year. If an employee still has holiday days left after taking these twenty days, they are entitled to save the remaining days for a later year. These days can be saved for a maximum of five years, after which they must be taken as pay instead.
This rules does, however, include a limit, namely that an employee is not allowed to save holiday days during a year in which they use previously saved holiday days, which means that the employee must take all of their paid holiday days for the year before they can use any saved days. Keep in mind that the requirement to take at least twenty holiday days applies to paid holiday days only and not unpaid or advance holiday days.
Can unused holiday days be paid as salary?
An issue that employers frequently encounter is the matter of whether they can pay unused holiday days as salary. There is often one or more employees who do not want or feel unable to take at least twenty holiday days during the year. Here, however, the law is very clear: holiday is for rest and recuperation and cannot be replaced by money.
This rule cannot be ignored even if the employee would prefer money over leave. There are, however, a few exceptions: if an employee has been sick the entire year and unable to take any holiday; if an employee terminates their employment and has outstanding or saved holiday days; and if an employee is on a fixed-term contract lasting less than three (3) months.
Terms and conditions, collective agreements and procedures
Although the Annual Leave Act provides the foundation for regulating leave, an employer may, to some extent, reach agreement on other terms and conditions with individual employees or sign a collective agreement with other rules. Keep in mind that this is always a case of offering better terms and conditions than the legislation – you cannot offer inferior terms and conditions.
Be sure to have procedures in place to support the regulations you follow as well as a procedure for checking outstanding holiday days after the main holiday period so further holiday can be planned for any employees with outstanding holiday days.
If you need support and advice in this area
Azets can help with your holiday procedures, calculations and remaining holiday days and is available should you encounter any other issues regarding holiday rules.
We are experts in payroll administration, HR and accounting and offer advice to companies that need help.
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