International Annual Leave Rules — Or I Want to Live in Brazil!

[tweetmeme source=”HRGlobal” service=”bit.ly” only_single=”false”]Author:
Jacque Vilet – Vilet International

In many parts of the world, time off from work is called annual leave or holiday, not vacation.  Whatever you call it, we can agree on a universal definition:  Annual leave refers to the period of time-off with pay which is available to employees, to pursue relaxation and recreation with their family and friends.  The amount of annual leave provided in different countries around the world varies quite a bit.  This post provides a nice summary of the legal requirements for annual leave provisions in some key countries. In order to be competitive in a specific country, a company also needs to take competitive data in mind when forming its policy.

Country	Legal Requirements
China	Seniority based.  Must pay during the year of entitlement otherwise the company must pay 3 times the amount of pay for the unused days. <1 YOS          =   15 days ratably reduced  1-10 YOS       =  15 days 10-19 YOS     =   25 days 20+ YOS        =   35 days
Switzerland	Same number of days for all employees. Federal law requires a minimum of 20 days. If an employee is under age 20, then the minimum is 25 days.  There is no pay in lieu of vacation days taken.   Days can be carried forward into the next year.   The maximum date for claiming unused vacation for any one year is 5 years.   This requires a lot of recordkeeping.
UK	Same number of days for all employees.  The law combines both “annual leave” and “public holidays” in a single total amount per year.   The minimum is 20 days “annual leave” and 8-10 days for “public holidays”.   The total is 28-30.   In England the total is 28 days; in Scotland it is 29 days; and in Ireland it is 30 days. At termination, employees can claim payment for the remainder of both unused “annual leave” and “public holidays”.   There is no separation of the two for payout at termination.  During employment there is no pay in lieu of days taken.   “Annual leave”  days may be carried forward into the next year but public holidays may not be.
Singapore	Seniority based. < 3 mos.   = None  3 months to 1 YOS     = 7 days 1 additional day per year up to a maximum of 14 days Days may not be carried over into the next year and may not  be cashed out.
Japan	Seniority based. 6 mos to 1.5 YOS = 10 days  >1.5 YOS  = 11 days >2.5 YOS  = 12 days >3.5 YOS  = 14 days >4.5 YOS  = 16 days >5.5 YOS  = 18 days >6.5 YOS  = 20 days Payout of vacation is prohibited. All unused vacation must be carried over to the next year, but must be used by the end of that next year or be forfeited.
France	All employees receive the same amount of 25 days per year.Employees that  have worked at least 1 month during a given reference period are entitled to 2.5 working days per month worked.   In principle the reference period runs from June 1 to May 31.   Vacation is capped at 25 days per year.   Four weeks must be taken in the year earned.  One week may be carried forward in a company savings account (CET).  Unused vacation must be paid out at termination.
Germany	All employees receive the same amount of 24 days per year. After being employed for 6 months, the law requires employees to get 24 working days per year.   Most CBA’s award 30 days per year for a workweek of 5 days.  All unused vacation must be paid out at termination
Brazil	All employees receive the same amount of 30 days.After being employed for 1 year, employees are entitled to 30 days, 10 of which may be taken in cash.  As a vacation allowance, employees get 1/3 of their monthly salary at the time of vacation.  An employer has up to 1 year to grant an employee vacation.   If the employer exceeds 1 year, the company must pay the employee double.    Vacation must  normally be taken all at one time.  However, it may be split once into 2 shorter periods of time.    It cannot be split more than once and no vacation period can be shorter than 10 days.
Argentina	Seniority based.  Employees must be employed for 6 months before getting vacation. 6 mos – 5 YOS  = 14 days  5-10 YOS           = 21 days 10-20 YOS         = 28 days 20+ YOS            = 35 days Vacation period is January 1 through December 31.   Employees normally take vacation between October and April, however, employers may grant vacations at different times of the year based on the pace of the company’s business.  Up to 1/3 vacation may be carried forward.   During vacation employees have a right to receive a “vacation bonus”.  The calculation:  Divide the monthly salary by 25 and multiply that number by the vacation days taken.
U.S.	Usually seniority based.  No federal/legal requirement for minimum vacation.   The number of days are left up to each company and usually set based upon competitive data   Most states (exception of California, Maryland and Montana) allow no vacation carryover to the next year.   If allowed, employers usually set a maximum limit on the number of days that can be “on the books” at any one time.  There are 16 states that require accrued but unused vacation to be paid out at termination (California, Colorado, District of Columbia, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Mississippi, Montana, Nebraska, New York, North Carolina, North Dakota, Rhode Island, and Wyoming).   In reality, it is common practice to pay out unused vacation in all states.

The information stated above is the legal or minimum requirement for each country.  Once again, while companies need to ensure they are in compliance with these minimums, it is also important to understand the common and competitive practice.   Competitive practice will be higher than the minimum, legal requirement in almost all industries.

Important Note:  This posting is intended to provide a brief overview of  vacation rules around the world.     Please check with your local, in-country law or payroll firm to ensure this information is up-to-date with the latest legal requirements.

Source:  In-country payroll providers

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