Autumn is approaching – do you have control over how many vacation days your employees have remaining

Most employees have taken their vacation earlier this year. Many have likely used all their vacation days, but it is very common for employees to have remaining days towards the end of the year. Under the Annual Leave Act, this is referred to as “remaining holiday entitlement”. What do you do with these remaining days?

Most employees have already taken their vacation earlier this year. While many have likely used all their allotted days, it is very common for employees to still have unused vacation days remaining towards the end of the year. Under the Annual Leave Act, this is referred to as “remaining holiday”. So, what should you do with these days?

As an employer, you have an obligation to ensure that your employees take their vacation during the year. Now is therefore the time to review how many vacation days your employees still have left. You must decide whether to require that all remaining days be taken before year-end, or whether you will permit the transfer of holiday days into 2026 for those who wish to do so.

And remember, employees are entitled to be notified of their scheduled vacation as early as possible and no later than two months before the holiday begins. The time to plan the remaining leave is therefore now!

The Annual Leave Act is clear

The legislation stipulates that employees must take their full holiday entitlement during the calendar year, and it is the responsibility of the employer to ensure this, cf. Section 5 of the Annual Leave Act:

§ 5. Duration of holiday leave
(1) (Standard holiday entitlement)
The employer is obliged to ensure that the employee is granted 25 working days of holiday each holiday yea

However, it is not uncommon that employees do not manage to take their full holiday entitlement within the year. In such cases, what obligations do you have as an employer? Do employees also have any responsibilities in this regard?

Can deliver better services!

But first – what is the difference between statutory holiday and contractual holiday?

It may be useful to clarify a few concepts before we look specifically at the rules for remaining holiday entitlement.

Under the Annual Leave Act, employees are entitled to 4 weeks and 1 day of vacation per holiday year. Employees who are – or who turn – 60 years old during the holiday year are entitled to one additional week, giving them a total of 5 weeks and 1 day, as provided by the legislation.

However, most employers in Norway offer more vacation than what is required by law. It is very common to agree on 5 weeks of holiday, and 6 weeks for employees who are or turn 60 within the holiday year.

The additional holiday represents 5 working days (based on a 6-day work week) or 4 extra vacation days (based on a 5-day work week).

So how should you manage these extra days when planning holidays for your employees?

While the Annual Leave Act imposes strict limitations on how holiday days may be handled – particularly regarding carry-over and payout of vacation days – this does not apply to the contractual holiday.

As such, employers have greater flexibility when arranging the use of the additional contractual holiday days, compared to statutory vacation days. This applies particularly to the carry-over of holiday, which is addressed below.

Remember – employees both have a right and an obligation to take their remaining holiday!

As previously mentioned, you as the employer are responsible for ensuring that employees take their full holiday entitlement within the year. This means you have the management prerogative when it comes to scheduling vacation and may require employees to take their holiday. This applies to statutory vacation days. For contractual vacation days, the governing terms are set out in the employment agreement.

Your right to determine the timing of the holiday also extends to the remaining vacation entitlement.

The Annual Leave Act also clearly states that employees are entitled to take their full statutory holiday during the holiday year, and the employer must respect this. Remaining statutory vacation can therefore be requested by the employee, and employees are even entitled to have their statutory remaining holiday taken as one consecutive period. However, it is still the employer who determines the timing.

How many days constitute the remaining holiday?

It is important to distinguish between statutory remaining holiday and contractual (remaining) holiday.

The Annual Leave Act distinguishes between main holiday and remaining holiday. The main holiday consists of three weeks, and any vacation beyond those three weeks is referred to as remaining holiday under Section 7 of the Act.

Statutory remaining holiday amounts to 7 working days (based on a 6-day work week under the Act), or 6 vacation days (based on a 5-day work week).
Many employees are entitled to an additional 5 working days / 4 vacation days by agreement. These extra days are not regulated by the Annual Leave Act’s provisions on remaining holiday, but by the employment contract or applicable collective agreement.

Agreement on the transfer of vacation

The Annual Leave Act allows for the transfer of up to two weeks of vacation to the next holiday year. This is not something either party may demand, but it may be agreed upon. The agreement regarding the transfer must be made in writing and no later than by the end of the calendar year.

- In such cases, all days must be carried over to the next year, including those that exceed the two-week limit. It is not permitted to cancel vacation days at the end of the year. All remaining vacation days must be transferred to the following year, including those exceeding two weeks. The employee is entitled to take these days during the next holiday year.
- In such cases, it is implied that the employee should have taken all vacation before the end of the year.
  
  If, despite this, the employee still has remaining vacation days, these must also be carried over to the next year. The employee will be entitled to take these days during the following holiday year.
- If vacation days remain as of 31 December, and no transfer agreement has been made, or if an agreement has been made but more than two weeks remain, all vacation days must, as mentioned, be carried over.
  
  However, this is contrary to the provisions of the Annual Leave Act on holiday scheduling, and the employer may be held liable for compensation, cf. Section 14 of the Annual Leave Act.
- The strict rules on the transfer of vacation days under the Annual Leave Act apply only to the statutory days. The situation is different for additional vacation days granted by agreement. These are not governed by the Annual Leave Act, but by the employment contract or the applicable collective agreement.
  
  If the agreement states that the additional vacation days may be cancelled at year-end, this is fully acceptable and not in conflict with the provisions of the Annual Leave Act.

Maximum transfer of vacation within the limits of law and agreement

It is therefore permissible to agree on the transfer of:

12 statutory working days of vacation plus 5 working days granted by agreement = 17 working days, or if calculated based on a 5-day work week
10 statutory vacation days plus 4 contractual vacation days = a total of 14 vacation days

What about employees on parental leave or who are/were sick?

Vacation days remaining as of 31 December may be due to illness or parental leave.

According to Section 9 of the Annual Leave Act, employees who are 100% on sick leave may object to taking vacation during their period of illness. The same applies to employees on parental leave who receive parental benefits from NAV.

If the outstanding vacation days arise from such circumstances, these days must nevertheless be transferred to the next year. This is not considered a breach of the Annual Leave Act, as it is beyond the employer’s control.

Contractual vacation days, as mentioned above, may be agreed to be cancelled, even in such cases.

Can unused vacation days be paid out – or not?

The fact that vacation days cannot be cancelled also means they cannot be “bought out”. Holiday pay or salary for the days transferred must be carried over into the next holiday year.

However, if contractual vacation days are cancelled, it is fully permissible to pay holiday pay or salary for these days.

Lack of control over vacation may be costly

It may become a financial burden if vacation days accumulate for employees who leave their position. Upon termination of employment, all accrued holiday pay must be paid out.

If holiday pay has already been paid and salary has been deducted for vacation days, the employee is entitled to a reimbursement of the salary deduction for any remaining vacation days at the time of termination.

If you have employees with high vacation balances who resign, this may therefore result in significant payouts.

Do not forget the risk of liability for compensation due to insufficient holiday scheduling, as mentioned earlier

Some well-intentioned advice

Be proactive (remember the two-month notice requirement for scheduling vacation)
Create a well-structured vacation plan
Remember, it is your responsibility as employer to ensure your employees take their vacation
Maintain good communication with your employees, or union representatives where applicable, and encourage them to use their vacation entitlement
Pay particular attention to those with a high balance of unused vacation days
Keep in mind that employees have the right to take their full annual vacation before the end of the year
Poor planning can, in the worst case, be costly

And don’t forget that vacation is essential for both body and mind! No one benefits from employees who are exhausted and do not receive the rest they are entitled to during the year. All employees need time to disconnect – including from their job and from you as their employer.

If you need advice or someone to discuss vacation planning with, do not hesitate to contact your customer representative at Aider.