Vacation compensation in the event of illnessThe Compensation for vacation in the event of illness Is a frequent point of contention when long-sick workers are laid off. We explain what you are entitled to.
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What does vacation compensation mean?
Vacation compensation means that you do not actually get time off, but are paid a set amount per open vacation day. In German labor law this is the exception. The law only provides for vacation compensation in cash if you are still entitled to unused vacation days at the end of the employment relationship. So you can not, for example, in the current employment relationship with the employer agree that you convert your open vacation days into a special payment.
At least this is excluded for the statutory minimum leave. If your employer grants you more than 20 vacation days per year (for a five-day week), corresponding agreements are possible for the vacation in excess of this amount. Here it depends on the regulations in the work or collective agreement.
No compensation for vacation in case of long illness?
No, in principle you can still demand money for your open vacation days even if you have been ill for a long time and unable to work. As always, this only applies if they have not yet been used at the end of the employment relationship.
Especially after a long illness, compensation in cash is often unavoidable. Because you cannot take vacation days during your illness. The employer may not send employees who are incapable of work on vacation. However, they continue to accumulate vacation days. Your situation is favorable with regard to vacation compensation for another reason as well: your entitlements expire much later than usual. More about this in the following section.
Mr. Dr. Drees advises you. Each case is unique. Mr. Dr. Drees answers your questions. He will discuss with you how best to proceed. With the advice of a specialist lawyer for labor law you are safe.
We will get back to you at short notice. Your most pressing legal questions can usually be clarified afterwards.
This is how the calculation of vacation pay in the event of illness works
You can determine how much money you are entitled to for open vacation at the end of the employment relationship as follows:
How many open vacation days are you entitled to?
First find out how many vacation days you are still entitled to. You can always find this out from your employer. Check its calculation, however! You should pay attention to these two aspects in particular:
Example: You are incapacitated for work for the whole of 2021. You will be dismissed at the end of December 2021. For the year 2021, you were entitled to at least the statutory vacation entitlement of 20 days (for a five-day week). So after you leave, you can claim compensation for the entire vacation from 2021, even though you were de facto never really able to use it due to your illness.
How much will you receive per day of leave?
Now calculate how much money you are entitled to per vacation day. This is done using the following formula:
– Gross earnings of the last 13 weeks x number of your open vacation days = interim result – interim result / number of working days of the last 13 weeks
The result is the amount you can demand as vacation compensation.
The number of working days in the last 13 weeks does not depend on whether you were ill o.a. What is relevant is how many working days would have accrued according to your employment contract.
Gross earnings include bonuses, but not overtime. Likewise, Christmas bonuses, loyalty bonuses and profit sharing are excluded from the calculation.
How does the calculation of the vacation pay in case of illness work??
Does the vacation compensation influence the unemployment benefit?
Yes. You must expect a period of rest during which you will not receive unemployment benefits. The period of rest lasts as long as the vacation you are compensated for.
ExampleYou will be paid on the 31st day of the year. You quit your job in May and are paid 20 vacation days. You are therefore not entitled to unemployment benefit for the next 20 working days. The start of payment is postponed accordingly.
Caution: The suspension period can be significantly extended if you are paid severance pay and the employment relationship ends before the end of the notice period.
Is the vacation compensation in case of illness tax free?
No, taxes have to be paid on the vacation compensation. The tax office treats the payment as wages and salaries. In addition, there are social contributions that also apply to the vacation compensation.