Holiday pay
- Holiday pay shall be paid no later than on the penultimate working day before the start of the holiday.
- By agreement of the parties the holiday pay may be paid at a later date.
- To calculate the annual holiday pay, the average calendar day remuneration is calculated.
Time of payment of the holiday pay
Holiday pay is paid no later than on the penultimate working day before the start of the holiday (subsection 70 (2) of the Employment Contracts Act). The parties may agree on the later payment of the holiday pay, but no later than on the payday following the start of using the holiday. The start of using the holiday means the start of the holiday, not the end of the holiday. For example, if an employee starts using the holiday from 01.05 to 15.05 and his payday is 05.05, the holiday pay must be paid at 05.05 not at 05.06.
Monetary compensation for unused holidays is only allowed at expiry of the employment contract.
Calculation of holiday pay
The calculation of holiday pay is based on the Government of the Republic Regulation No. 91 ‘Conditions and Procedure for Payment of Average wages’.
If the employee was paid fixed wages during the six months or less than six months preceding the month in which the holiday pay is calculated, the average calendar day remuneration is not calculated and the employee is paid the fixed wages as holiday pay.
Annual holiday pay (subsection 70 1) of the ECA) and holiday pay (section 71 of the ECA)
The annual holiday pay is calculated on the basis of the average calendar day pay. To calculate the average calendar day pay, wages for six (or less according to time worked) months are added and divided by the number of calendar days in the same period. The number of calendar days on which the calculation is based is reduced by the number of calendar days when the employee’s remuneration was not calculated for days absent from work on the basis of section 19 of the Employment Contracts Act (annual holiday, incapacity for work, etc.). National and public holidays shall not be included in the number of calendar days when calculating the annual holiday pay and holiday pay.
AVERAGE CALENDAR DAY PAY = Six months’ wages that have become collectible / six months’ calendar days – public holidays – calendar days absent from work on the basis of section 19 of the Employment Contracts Act
ANNUAL HOLIDAY PAY = average calendar day pay × number of days of annual holiday or number of days of annual holiday earned.
Study leave pay (subsection 13 (3) of the Adult Education Act)
The annual holiday pay is calculated on the basis of the average calendar day pay. To calculate the average calendar day pay, wages for six (or less according to time worked) months are added and divided by the number of calendar days in the same period. The number of calendar days on which the calculation is based is reduced by the number of calendar days when the employee’s remuneration was not calculated for days absent from work on the basis of section 19 of the Employment Contracts Act (annual holiday, incapacity for work, etc.). When calculating the study leave pay, national and public holidays are included in the calculation of calendar days.
AVERAGE CALENDAR DAY PAY = six months’ wages that have become collectible / six months’ calendar days – calendar days absent from work on the basis of section 19 of the Employment Contracts Act.
STUDY LEAVE PAY = average calendar day pay × number of days of study leave
