Civil servants: changes to the rules on unused holiday entitlement – they may now be paid out
In fact, the employee will only lose their entitlement to payment in their pay packet if the public administration is able to prove that it formally invited the employee, in good time, to take the rest days to which they are entitled
Key points
The rules on accrued holiday entitlement for civil servants. After more than ten years of bans and legal disputes, the ban preventing the payment of unused holiday entitlement has been lifted. This new provision is contained in Public Administration Decree No. 144 of 7 August 2026, which was finally approved by Parliament on 30 September.
Holiday entitlement can be converted into pay
Under the new regulations, accrued but unused days off at the time of termination of employment may be converted into a financial payment included in the payslip. This change brings Italia into line with the fundamental principles of European Union labour law.
But what had happened in the past? During the era of public spending cuts, Decree-Law No. 95/2012 (Article 5, paragraph 8) had imposed an absolute ban: public sector staff were obliged to take their holidays, rest days and leave, and these could not be converted into cash.
Under no circumstances – not even upon retirement, resignation, dismissal or redundancy – could payment for unused holiday leave be included in the pay packet. However, this rule – introduced to contain public expenditure and discourage the build-up of outstanding leave – turned out to be a ‘trap’: many workers found weeks of leave they had never taken due to work commitments being cancelled, without any compensation.
The European Union’s intervention
Article 7 of Directive 2003/88/EC guarantees every worker at least four weeks’ paid annual leave and states that this entitlement may be replaced by a financial allowance only in the event of termination of employment.
