Most employees in Germany — and most HR departments — still believe that unused vacation automatically expires on 31 December, or at the latest on 31 March of the following year. Since rulings of the European Court of Justice and the Bundesarbeitsgericht, the rule is different: your vacation days only expire if your employer specifically informed you about your remaining balance and expressly warned you, in good time, that the days would lapse — no warning, no expiry. Unwarned days carry forward indefinitely, and even the three-year statute of limitations does not start running. In our practice, exit audits routinely surface 20 to 60 recoverable vacation days that the employee had written off years ago.
The old world: 31 December and the 31 March carry-over
The statutory starting point is § 7(3) BUrlG: vacation must be taken in the current calendar year. Carry-over into the first quarter of the following year is only permitted where urgent operational reasons or personal reasons (typically illness) justify it — and carried-over days must then be taken by 31 March, after which they lapse.
For decades courts applied this mechanically: 8 days left on 31 December without a carry-over reason were simply gone. That world ended with the CJEU’s Max-Planck decision (CJEU 6.11.2018 – C-684/16) and the BAG’s implementing judgment of 19.2.2019 – 9 AZR 541/15.
The new world: no warning, no expiry
The BAG now reads § 7(3) BUrlG in conformity with EU law (Art. 7 of Directive 2003/88/EC): vacation only expires at year-end or at the end of the carry-over period if the employer has previously complied with its Mitwirkungsobliegenheiten — duties of initiative and cooperation. Concretely, the employer must, for each individual employee and each vacation year:
- State the concrete remaining balance — „you have 14 vacation days left for this year”, not a generic reminder that vacation exists.
- Request the employee to actually take the days.
- Warn clearly and in good time that the days will lapse if not taken — early enough that all remaining days can still realistically be taken.
If any element is missing, the vacation does not expire — not on 31 December, not on 31 March. It rolls into the following year’s entitlement and survives again unless a proper warning is given for that year too. Unwarned days accumulate indefinitely.
What does not count as a proper warning
- A clause in the employment contract or the employee handbook stating that vacation expires at year-end. Abstract, not individual, not timely.
- A generic all-staff email in mid-December — usually too late, too unspecific, and without the individual balance.
- A payslip or HR-portal display showing the remaining days. Information without a lapse warning does not suffice.
- A warning given so late in the year that the remaining days can no longer physically be taken.
The burden of proof for a compliant warning lies with the employer. Most employers before roughly 2019 issued no warnings at all; many still get the content or timing wrong.
Limitation follows the same logic: BAG 20.12.2022 – 9 AZR 266/20
Employers’ fallback was the general three-year limitation period (Verjährung, §§ 194, 195 BGB). The BAG closed that route in its judgment of 20.12.2022 – 9 AZR 266/20, following the CJEU (20.12.2022 – C-120/21): limitation only begins to run at the end of the year in which the employer fulfilled its information and warning duties. No warning, no clock. In the decided case, the employee recovered 76 days reaching back many years — the employer had never warned her.
The practical consequence for employees is enormous: a long-tenured employee whose employer never issued compliant annual warnings can claim unwarned residual days from the entire employment relationship, without any limitation defence.
Long-term illness: the 15-month rule
One important exception concerns long-term sick employees. Where an employee is continuously unable to work, vacation cannot be taken at all — so it does not lapse at year-end. But it does not accumulate forever either: following the CJEU’s KHS decision (CJEU 22.11.2011 – C-214/10), the BAG holds that vacation of a continuously incapacitated employee lapses 15 months after the end of the respective vacation year (BAG 7.8.2012 – 9 AZR 353/10). Vacation from a year in which you were sick throughout therefore expires on 31 March of the second following year — regardless of any warning, because a warning would have been pointless.
One refinement: if you worked part of the vacation year before falling ill, the 15-month cut-off only applies if the employer had warned you in time while you could still take the days (BAG 20.12.2022 – 9 AZR 245/19, following CJEU 22.9.2022 – C-518/20 and C-727/20). Mixed years without a warning survive beyond the 15 months. On long-term sick leave, run this analysis alongside your Krankengeld and sick-during-vacation positions.
Auditing your unwarned balance
Because the employer bears the burden of proof, the audit is more favourable to you than most employees expect. Reconstruct, year by year: contractual annual entitlement (see vacation days entitlement), days actually taken, and whether a compliant individual warning exists for that year. Everything unwarned and untaken is still alive.
-
Collect the records
Contract, vacation approvals, HR-portal exports, payslips, old year-end emails. Ask HR in writing for your vacation account history.
-
Build the year-by-year table
For each year: entitlement, taken, remainder, warning yes/no.
-
Check warnings against the three criteria
Individual balance stated? Express lapse warning? Timely? A December email for 20 remaining days fails the timeliness test.
-
Assert in writing — especially at exit
During employment you claim the days as time off; at termination the surviving balance converts into money (Urlaubsabgeltung, § 7(4) BUrlG). Watch contractual Ausschlussfristen for the payout claim.
The Urlaubsabgeltung interplay
The duty-to-warn case law is most valuable at the end of the employment relationship. Days that survived through missing warnings are paid out under § 7(4) BUrlG at your full daily rate — calculated from the last 13 weeks’ earnings. An unwarned balance of 30–60 days is a hard legal claim employers routinely overlook in termination agreements. Conversely, standard settlement clauses („all mutual claims are settled”) extinguish it — never sign before the vacation account has been audited. The payout mechanics are detailed in our article on vacation payout at termination.
Worked example
Software engineer in Düsseldorf, gross salary €78,000 (€6,500/month), 5-day week, 28 contractual vacation days per year, employed 6 years. The employer never issued individual expiry warnings — only a boilerplate sentence in the contract and an annual all-staff reminder in late November.
Reconstructed balances: year 1: 6 days untaken; year 2: 9; year 3: 12; year 4: 4; year 5: 8; exit year: 10 accrued and untaken. Under the old reading, everything except the exit year would be gone; under the Max-Planck/BAG case law, nothing expired and nothing is time-barred: 49 days.
Daily rate: €6,500 × 3 ÷ 65 working days = €300 per day. Urlaubsabgeltung claim: 49 × €300 = €14,700 gross — asserted in writing 2 weeks after the termination date, within the 3-month contractual exclusion period. The employer’s HR system showed „0 days” for years 1–5; confronted with the missing warnings and the burden of proof, it paid in full without litigation, and the vacation account was carved out of the parallel severance settlement as a separately payable item.
Frequently asked questions
My contract says vacation expires on 31 December. Is that binding?
No — not for the statutory minimum vacation (20 days at a 5-day week). A contract clause cannot replace the individual, timely warning the case law requires. For additional contractual days above the minimum, stricter forfeiture rules are possible, but only if the contract clearly distinguishes the statutory and contractual tranches. Most contracts do not, so the full entitlement follows the statutory rules.
My HR portal shows my remaining days all year. Isn’t that enough?
No. Passive availability of the balance is information, not a warning. The employer must actively approach you, state the concrete number, ask you to take the days and expressly warn of the lapse — early enough that you can still take them.
How many years back can I claim?
In principle, to the beginning of the employment relationship. Neither § 7(3) BUrlG expiry nor the three-year limitation period operates for years without a compliant warning (BAG 20.12.2022 – 9 AZR 266/20). The practical limits are evidence (reconstruct your balances) and, after exit, the exclusion period applicable to the monetary payout claim.
I was on long-term sick leave — do my vacation days from those years survive?
Partially. For years in which you were incapacitated the entire year, vacation lapses 15 months after the end of that year even without a warning. For years in which you worked part of the year, the 15-month cut-off only applies if the employer warned you in time during the period you were still working.
Does this also apply during my notice period after a dismissal?
Yes. Employers often unilaterally „set off” vacation against garden leave — that only works under specific conditions (irrevocable release with express vacation designation and payment assurance). Poorly drafted release clauses leave the vacation intact and payable. Have the release wording checked before accepting it.