The Act applies with certain restrictions, to contract employees as well as civil service employees.
Holiday is earned by working during the holiday credit year (from 1 April to 31 March). The right to holiday accrues either based on the regulation of 14 days, or on the regulation of 35 hours. Those who do not fulfil these earnings regulations are entitled to paid leave, corresponding to annual holiday (the new so called leave system).
The 14-day regulation covers those who according to their contracts work at least 14 days every month. The 35-hour regulation covers those who according to their contracts work less than 14 days a month, but at least 35 hours for at least one month.
The employee earns 2 or 2.5 weekdays of annual holiday for each full holiday credit month, depending on the duration of his employment relationship. When the employment relationship has lasted a year, the maximum length of the annual holiday is 30 weekdays.
Full holiday credit month
The length of the annual holiday depends on the amount of full holiday credit months. For employees covered by the 14-day regulation, a full holiday credit month is a calendar month, during which they have had at least 14 days at work, or the equivalent of days at work. For employees covered by the 35-hour regulation, a full holiday credit month is a calendar month, during which they have had at least 35 hours at work, or the equivalent of hours at work.
When it is determined whether a calendar month is a full holiday credit month or not, the periods of absence from work especially mentioned in the Act are regarded as periods equivalent to days or hours at work (periods of annual holidays, illness, maternity, paternity or parental leave, study leave and lay-offs, within the restrictions laid down in the Act). The provisions regarding time equivalent to time at work are applied as such to employees covered by the 14-day regulation and the 35-hour regulation.
New leave system
Employees not covered by the earnings regulations (14 days or 35 hours), who according to their contracts work less than 35 hours every month, are entitled to paid leave corresponding to annual holiday. The employee can be granted 2 weekdays of leave for each month the employment contract is valid. An employment relationship that has lasted a year entitles to four weeks of leave, during which holiday compensation is paid. This leave system is also applied to employees working at home and to an employer’s family members when there are no other employees working for the employer.
Also, employees who have worked for the same employer under repeated fixed-term employment contracts, with only short-term interruptions, are entitled to take paid leave. In these cases the maximum length of the leave depends on the duration of the employment relationship, similar to determining the length of the annual holiday. Employees are, if they so desire, entitled to take a leave. If the employee does not take a leave, the holiday compensation paid according to the working time is paid at the end of the holiday season, at the latest.
Holiday pay and holiday compensation
Unless otherwise agreed in a collective agreement, the holiday pay calculation method
is determined on the basis of the payment system applied to the employee at the end of
the holiday credit year (March 31). Employees covered by the 14-day regulation, as well as employees receiving weekly or monthly pays who according to their contracts work at least 35 hours every month, are paid their normal pays during their annual holidays. The holiday pay of employees covered by the 14-day regulation who are receiving hourly or incentive pays is calculated by multiplying their average daily pays by a multiplier determined according to the number of days holiday.
The holiday pay of employees covered by the 35-hour regulation who are receiving hourly or incentive pays, and of those employees who are receiving weekly or monthly pays but do not work 35 hours every month, is percentage-based. The holiday pay is, depending on the duration of the employment relationship, either 9 or 11.5 per cent of the pays of the holiday credit year. If the employee has not been able to attend work during the holiday credit year, for instance due to family leave, illness, rehabilitation or lay-offs, as referred to in the Annual Holidays Act, the calculated amount of unreceived pay for the period of absence is added to the pay used as a basis for calculating the holiday pay.
At the end of an employment relationship, the holiday compensation regarding holiday not taken is calculated according to the regulations regarding holiday pay, mentioned above.
Granting annual holiday and payment of holiday pay
Annual holidays are earned and taken in weekdays. The Annual Holidays Act is applied so that Sundays, church festivals, Independence Day, Christmas Eve, Midsummer Eve, Easter Saturday and the First of May are not considered as weekdays. A total of 24 weekdays of the annual holiday (summer holiday) must be taken in the holiday season (from 2 May to 30 September. The rest of the holiday (winter holiday) must be granted by the start of the following holiday season, at the latest.
The employer and the employee may, among other things, agree on taking the portion of the holiday exceeding 12 weekdays within one year of the end of the holiday season (for example in connection with the next summer holiday). On the initiative of the employee, the employer and the employee may agree on converting the amount of annual holiday in excess of 24 weekdays into shortened working hours.
The holiday pay must be paid before the start of the holiday. For a holiday period lasting less than six days, the holiday pay may, however, be given on the employee’s normal pay day.
In practice, annual holidays are also agreed through collective agreements based very broadly on this law.