Summer is right around the corner, and this is your reminder to make sure everything is in order when it comes to vacation reimbursement.
It is up to the employer to keep track of this, to distribute vacation time, and make sure all employees spend their vacation days. As an employer, you ultimately make the choice of when your employees should have their vacation time, but there are still some limitations to keep in mind.
- Employees have a right to 4 weeks and 1 day of vacation.
- Lots of employers have extended this to 5 weeks (4 extra days).
- Employees turning 60 years of age in the vacation year have a claim to 1 week extra.
- Employees have a right to 3 consecutive weeks of vacation between the 1st of June until the 30th of September, as the main vacation period. The employer decides when these 3 weeks take place during this period.
- For the remaining vacation amount, the employee can use these days for the rest of the year, with the employer deciding when.
Employees with little-earned holiday pay may object to taking a full holiday. This is typically where employees last year came from school, were on unpaid leave, or arrived in Norway from abroad. These may oppose taking a holiday to the extent that the holiday pay does not cover the loss of pay during the holiday. If holiday pay has been earned, the employee must take the holidays covered by the holiday pay.
Earning holiday pay
Holiday pay must cover the loss of pay that happens during the holiday, when no salary is paid. The holiday pay rate in the Holiday Act is 10.2% of the holiday pay basis. This will cover the loss of pay for 4 weeks and 1 day holiday.
For 5 weeks of holiday, the holiday pay rate is 12% and must cover the loss of pay for 5 weeks holiday. Those over the age of 60 receive 2.3% extra holiday pay.
The holiday pay basis amounts to cash paid remuneration in the year of earning; the year before the holiday year.
Examples of what is included in the basis for holiday pay:
- Salary, fixed salary, hourly wage, etc.
- Sickness benefits, maternity and care benefits (limited)
- Overtime pay, piecework profit, shift allowance
- Variable benefits such as commissions, royalties, gratuities, bonuses, etc.
- Dirt surcharge, shift surcharge, walking surcharge and other inconvenience surcharges
- With more
Holiday pay is not given for benefits in kind, such as a free car or a free telephone.
Payment of holiday pay
The vacation pay is paid on the last regular pay day before the holiday, or no later than 1 week before the holiday begins.
For permanent employees and monthly employees, it is common to settle the holiday pay for those with a monthly salary only once a year. This is usually done in June. This means that you pay all the vacation pay and at the same time deduct salary for the vacation. This way, it is ensured that the employees are paid during the holiday.
Here are some Norwegian articles for further reading:
https://www.azets.no/blogg/feriepengeutbetaling/
https://www.azets.no/blogg/ferieplanlegging-ansattes-sommerferie/
https://www.azets.no/blogg/de-viktigste-feriereglene/
New pension from 2022
Pension from the first krone
Employees are entitled to a pension from the employer from the first krone. Until now, there has only been a requirement to save for a pension for income above 1G (basic amount in the National Insurance Scheme).
Pension from 13 years of age
Employees from the age of 13 must be included in the company's pension scheme. Until now, there has been no requirement to save for pensions for employees under 20 years of age.
Pension regardless of position percentage
Employees must be included in the company's pension scheme regardless of position percentage. Until now, there has been no requirement to include employees who work less than 20 percent.
Transition period
Employers are given a deadline of 1st of July 2022 to adapt to the changes. That is, what is above must be in place by 1 July at the latest.
Consequences
For companies that currently save for a pension from 1G, the change entails a cost increase. The size of the increase in annual savings for your company will depend on how many employees you have, and the savings rate in the company's pension scheme.
For example, a 2% savings rate will result in an annual increase in pension savings per employee of approximately NOK 2,200.
Read more about the new pension rules here:
https://www.azets.no/blogg/nye-pensjonsregler-2022/
