Entitlements for leave and pay in lieu of leave are forfeited by the end of the calendar year following the year in which such entitlements originated. For example, any vacation days, leave allowances and pay in lieu of leave generated in 2015 are forfeited on 1 January 2017.
If an employer has not paid his contributions in full, SOKA-BAU has to reduce any pay in lieu of leave accordingly. SOKA-BAU therefore strives to collect any outstanding contributions retroactively. If an employer pays contributions retroactively to SOKA-BAU, commercial workers will receive such back pay for up to four calendar years after their leave entitlements were forfeited. In this case, SOKA-BAU will notify the commercial workers concerned on its own accord.
SOKA-BAU is obliged to withhold a lump sum for income tax as well as solidarity tax and remit it to the tax office in Wiesbaden. Every worker will get an income tax statement from SOKA-BAU by 28 February of the following year stating the income tax withheld in the previous year. If posted workers were not subject to paying income tax in Germany – e.g. due to double tax treaties – they can apply for a tax reimbursement with the tax office in Wiesbaden.
In the case of litigation between SOKA-BAU (Urlaubs- und Lohnausgleichskasse der Bauwirtschaft - Leave and Wage Equalisation Fund of the German Building Industry) and an employer as to whether the employer is obliged to participate in the leave fund scheme, the commercial worker can still apply for compensation within one year after the final court ruling.
In the case of a worker’s death, his heirs are eligible to the following:
- payment of any leave allowance not forfeited yet
- payment of any compensation for leave
- any pay in lieu of leave not forfeited yet
Such entitlements can be claimed from SOKA-BAU.