Insights | April 1, 2019
New concept of “extra days off” in Finnish Annual Holidays Act
As of 1 April 2019, the Annual Holidays Act (162/2005) also guarantees four weeks of paid holiday to employees who have been on a lengthy period of absence due to sickness, an accident or medical rehabilitation. From the employer's perspective, the change means increased holiday costs as well as additional administrative work due to new instructions relating to record-keeping obligations. Some of the key changes are briefly described below.
Holiday accrual and right to extra days off
As a general rule, an employee accrues either 2 or 2.5 vacation days per month of work. In certain cases, the period during which the employee is absent is regarded as being equivalent to working time, meaning that the employee also accrues holiday during the period of absence from work. Currently, the maximum period of absence due to sickness, an accident or medical rehabilitation that can be considered equivalent to working time is 75 days. This rule remains in force. However, if the employee’s absence for these kinds of medical reasons were to last longer and at the end of the holiday credit year (Fi. lomanmääräytymisvuosi), the employee’s annual holiday accrual were to be less than 24 days i.e. four weeks of holiday, the missing days would be made up by so-called “extra days off” (Fi. lisävapaapäivä). Accordingly, the employee’s four weeks of holiday may be a combination of regular vacation days and extra days off.
Should the employee’s absence due to sickness, an accident or medical rehabilitation last for more than 12 consecutive months, no extra days off would accumulate after the limit of 12 months.
Compensation payable and record-keeping obligation
The employee is entitled to compensation equaling his/her regular or average pay during the extra days off. The compensation for the extra days off would be calculated based on the salary and fringe benefits applicable at the time of the commencement of the extra days off in question. If the employee were unable to use the extra days off during the period of employment, the employer would need to pay compensation for those days at the end of the employment.
As the nature of regular vacation days and extra days off is different, the employer is required to keep records of both of these categories. For example, no holiday bonus is payable for the extra days off, unless separately agreed.
The amendments entered into force on 1 April 2019, meaning that the extra days off could be given if the employee does not accrue at least four weeks of holiday during the current holiday credit year (1 April 2019 – 31 March 2020). The new rules relating to extra days off do not apply to previous holiday credit years.
The purpose of these changes is to ensure that Finland is in compliance with the Working Time Directive (2003/88/EC) and relevant case law from the Court of Justice of the European Union.
Should you have any questions regarding these new changes, we are happy to help.