By law, employees are entitled to 4 weeks of vacation in a calendar year.
If the employment relationship does not last the entire year, or if there are long-term obstacles at work, the entitlement to vacation is proportionally reduced. The purpose of vacation is to ensure sufficient rest for employees, both physically and mentally. For this reason, at least part of it should be taken as a continuous 2-week period.
According to the law, the employer, not the employee, schedules the vacation, although in practice it is often the other way around. Nevertheless, the employer should prepare the vacation plan considering the legitimate interests of the employee and must inform them in writing about the start of the vacation at least 14 days in advance.
Under §218 of the Labor Code, the entire vacation entitlement should be used in the calendar year in which it arose. If the employer does not schedule the vacation in the given calendar year, they may do so by June 30 of the following year at the latest. There is still a common belief that the entitlement to vacation then expires, but according to the law, this is definitely not possible. After this period, the employee can schedule their vacation themselves, and thus the vacation is carried over from year to year until it is completely used up.
If employees are not allowed to take their vacation and therefore do not get sufficient rest without reason, the company can be fined by the labor inspectorate. A fine is also imposed if the employer does not order the vacation for an employee who does not take it, although it is possible. Again, we remind you that according to the law, it is the employer, not the employee, who determines the vacation.
Paying for vacation without taking it is only possible in the case of termination of employment. It is not possible for other reasons.
More and more companies are providing the benefit of a larger vacation entitlement, offering not the statutory 4 weeks of vacation, but for example, 5 weeks. But how to set this benefit so that it truly works as the companies intend?
If you state the entitlement to 5 weeks of vacation in the employment contract, all rights and obligations are the same as if it were a legally established entitlement. With this option, we point out that the entitlement should be the same for all employees and should not favor certain groups over others unless there is a legitimate reason.
Setting the increased entitlement in an internal company directive allows for simpler changes (by unilateral act) and it is completely demonstrable that the conditions apply to the entire company, but again it is the same commitment as in the case of a legal entitlement.
The most interesting solution we encounter is increasing the entitlement after meeting certain conditions. In practice, employees do not take their vacation for various reasons and subsequently carry it over between years, continuously increasing their entitlement. Some companies thus allow an entitlement to an additional week of vacation only if employees use up their entire statutory entitlement by a certain date, for example, by October 31. From our perspective, this does not favor a group of employees, as anyone who meets the condition of proper scheduling of rest time can have additional vacation. The condition for the entitlement to additional vacation must, of course, be stated in the directive and employees must be familiar with it, but it is entirely up to the employers to set the conditions.
This solution thus reduces the number of vacation hours carried over to subsequent years and also motivates employees to not forget about their vacation plan.
Download PDF: Employee Benefits: How to Claim Annual Leave Above Standard Limit
