Holiday pay refers to the financial compensation for holiday that can no longer be granted, in whole or in part, due to the termination of an employment relationship. The legal basis is contained in Section 7(4) of the Federal Leave Act (BUrlG).
What is holiday pay in lieu of taking leave?
Annual leave must fundamentally be granted as paid time off. Payment in lieu of leave is therefore not normally permitted during an existing employment relationship.
If existing holiday can no longer be taken due to the termination of the employment relationship, it is replaced by a financial compensation claim for the Urlaubsanspruch.
In short: Holiday pay in lieu of leave means money instead of holiday if the holiday can no longer be granted due to the termination of the employment relationship.
Holiday pay and holiday allowance – what is the difference?
Holiday pay in lieu of taking leave and holiday allowance are different terms for remuneration.
Holiday pay in lieu of leave replaces an existing Holiday entitlement which can no longer be taken as time off due to the termination of the employment relationship. Holiday pay on the other hand, refers to additional remuneration that may arise, for example, from collective wage agreements or employment contracts.
What special regulations apply in the construction industry?
Special regulations regarding holiday compensation apply to construction workers covered by the industry-wide collective leave scheme.
The BRTV determines special conditions under which there is an entitlement to holiday pay compensation against the Holiday pay fund. These include, among other things, certain cases of leaving the area covered by the Collective agreement, cases of retirement, or a change to an employment or training relationship in a construction company.
Payment is made upon application, subject to the fulfilment of the collective agreement requirements, by the ULAK. However, a mere change of employer within the construction industry covered by the leave procedure does not generally result in existing leave entitlements having to be paid out; the entitlements can be carried over within the construction sector.
Holiday pay and compensation in construction – what is the difference?
In the holiday procedure of the building trade, holiday pay in lieu of leave is to be distinguished from compensation.
The compensation relates to a still existing holiday or holiday compensation entitlement, provided the collective agreement requirements for a payout are met.
Compensation, on the other hand, may be considered under the collective bargaining provisions for claims that have already lapsed. Separate entitlement and time limit regulations apply to the compensation.
Connection to Holiday entitlement in the construction industry
Holiday pay in lieu presupposes an existing Holiday entitlement. How holiday entitlement for manual workers in the construction industry generally arises and is carried forward within the social fund procedure is explained at Holiday entitlement in the construction industry classified.
