Reduction of holiday and holiday pay for periods of short-time work

According to the current legal situation, holiday entitlement can be reduced for periods when employees are on short-time work. However, this does not apply to holiday pay. Here, a reduction is only possible in relation to the share of the contractual additional leave and only with a corresponding agreement. The following article provides a brief overview of the issue:

Reduction of the holiday entitlement

According to the case law of the European Court of Justice (ECJ), the entitlement to both statutory and contractual additional leave can be reduced proportionately for periods during which employees were on short-time work. However, the ECJ has so far only clarified that such reduction options are compatible with European law(in particular Art. 7 of Directive 2003/88/EC). It is very doubtful whether a reduction of the holiday entitlement "automatically" occurs without any additional agreement regarding a reduction possibility of the holiday. It remains to be seen how the Federal Labour Court will position itself on this issue. The following therefore applies in practice: A reduction should be expressly agreed!

Reduction of holiday pay 

The holiday pay for the statutory minimum holiday, however, cannot be reduced. Reductions in earnings that occur as a result of short-time work are also not taken into account when calculating holiday pay (cf. section 11 subsection 1. sentence 3 BUrlG). However, a reduction may be made for contractual additional leave, provided the parties to the contract have effectively agreed on this.


It may therefore make sense for employers to reach an agreement on the reduction options when introducing short-time work (e.g. through a company agreement) or to inform themselves on the relevant legal websites

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