Paying out holiday days
According to Dutch legislation, employees are entitled to holiday days. But what happens in the event of an employee’s dismissal or departure, and what consequences does this have for your organisation? Read on for more information.
How does the pay-out of holiday days work?
If an employee or payroll worker departs or is dismissed, you as an organisation are obliged to pay out all remaining holiday days. This is done via the final settlement. Furthermore, you must also pay out the accrued holiday allowance. Most organisations pay out the holiday days together with the final salary payment.
What rules apply to the pay-out of holiday days?
Legally, as an employer, you are obliged to pay out holiday days within one month of the employee’s final working day. An employer cannot pay out statutory holiday days while the employee is still in service.
Rules often apply to employees regarding the taking of holiday days. An organisation can require an employee to take part of their holiday days within a certain period, so that they cannot accrue them indefinitely.
Paying out non-statutory vs statutory holiday days
Regarding holiday days, there is a difference between non-statutory and statutory holiday days. Statutory holiday days comprise the minimum number of holiday days to which an employee is entitled by law. The employer is obliged to grant and pay out this number of holiday days to employees. Non-statutory holiday days are all holiday days that exceed the minimum number of holiday days established by law.
There is an important difference in the pay-out of non-statutory and statutory holiday days. While statutory holiday days can only be paid out after an employee’s departure or dismissal, non-statutory holiday days can also be paid out while the employee is still in service. Upon the pay-out of a holiday day, the right to leave expires.
It may happen that statutory holiday days expire. In this case, employees do not have the right to request a supplement for this.
What do you do with holiday days upon dismissal?
If an employee submits their resignation, you as an employer calculate how many holiday days they still had outstanding. In consultation with the organisation, the employee can choose to take the holiday days or have them paid out. However, paying them out is not always advantageous for the employee. This is because a significant amount of tax is deducted from the paid-out holiday days, and the net amount is considerably less than with a normal salary.
If an employee is dismissed, the same rules apply in principle. Often, the intention is for an employee to depart as quickly as possible after dismissal, so in most cases, the holiday days will be paid out.
Would you like to know more about the rights and obligations you have as an organisation regarding the pay-out of holiday days? We at GJ GROEP provide you with information and advice without obligation. Furthermore, you can come to us for payroll administration and HR advice. On our website, you will find extensive information on a wide range of topics and services.
