Consequences to employers following the abolishment of Store Bededag as a public holiday
Background
On 28 February 2023, a majority in the Danish Parliament passed the Act on the consequences of abolishing Store Bededag as a public holiday. The Act enters into force on 1 January 2024 and outlines employers' obligation to pay a special salary supplement to employees whose working hours increase as a result.
For employees with a fixed monthly salary or a fixed salary for another period, who previously had the day off with pay on Store Bededag, they are now entitled to the statutory salary supplement.
Hourly-paid employees will be entitled to their regular hourly rate, including overtime pay, for any hours worked on Store Bededag.
The salary supplement earned from 1 January 2024 reflects the value of a normal working day. It amounts to 0.45% of the regular and fixed annual salary. The definition of "salary" follows the guidelines established in section 17(1) of the Holiday Act.
Employers can choose between two models for paying the salary supplement: 1) The Annual Model or 2) the Monthly Model, as described below. Regardless of the model chosen, employers must ensure that employees receive a salary supplement of 0.45% of their regular and fixed annual salary. When resigning, an employee is entitled to proportionate share of the salary supplement.
The annual model
Under this model, the supplement is paid twice a year with the May and August salaries. If an employer chooses the annual model, the first salary supplement is paid with the May 2024 salary.
The model aligns with the disbursement schedule for holiday supplements under the Holiday Act. The salary supplement may be paid together with or as an integral part of the holiday supplement. However, it is important to note that the two supplements are calculated differently.
The monthly model
In this model, the salary supplement is paid alongside the employee's regular monthly salary. For employees paid monthly, the first payment will be made with the January 2024 salary.
Employees on parental leave
The Act ensures that employees on parental leave, according to the rules of the Act on Entitlement to Leave and Benefits on Childbirth, who are not receiving full pay, are still entitled to the salary supplement as though they were working. This provision ensures that this group is not treated less favourably.
Practical considerations
Employers should consider whether they have employees whose working hours will increase, making them eligible for the salary supplement. If so, decisions about whether to implement the "annual model" or the "monthly model" for payment should be made promptly. If choosing the monthly model, it should be implemented already with the January 2024 salary.
Furthermore, employees affected by the Act must be informed of their revised salary and employment terms. This can be communicated in the form of an annex to their employment contract, an information letter, or by e-mail.
Employers should also update any references to Store Bededag in staff manuals, on the 's intranet, and/or other relevant document.
According to the explanatory notes, the Act does not prevent employers from negotiating special salary and employment terms for the day which was previously Store Bededag. The Act introduces some practical considerations, particularly concerning the calculation and disbursement of the salary supplement.
Do you want to know more?
Plesner's Employment and Labour Law team is available to provide specific advice tailored to your business needs and help you assess which steps you need to take in light of these changes.