Vacations and Vacation Pay
Employees must receive at least 2 weeks of vacation per year for the first four years of employment, and a minimum of 3 weeks of vacation after the fifth consecutive year.
For each week of vacation, employees are entitled to 2% of the wages earned in that year, meaning that, employers may put vacation pay on every cheque, or they may choose to pay out at the time of the vacation leave.
How long is a vacation?
Employees must receive at least two weeks of vacation after each of the first four years of employment. After completing 5 years of work with the same employer, employees must receive a minimum of 3 weeks of vacation.
Can employers give more vacation?
Under The Employment Standards Code, the minimum amount of vacation does not increase beyond 3 weeks of vacation after 5 years of service. Employers can, and often do, give employees more vacation than is required by law.
What are employees paid while on vacation?
Vacation pay is calculated based on the gross earnings in the previous year. For each week of vacation, employees earn 2% of their gross wages as vacation pay. Employees who are entitled to two weeks of vacation receive 4% of their gross wages as vacation pay and employees with three weeks’ vacation receive 6% of their gross wages as vacation pay.
What is included in gross wages for vacation pay?
Gross wages include all regular wages and any general holiday pay. Regular wages include hours paid as commission, salary, hourly, bonuses tied to productivity, and any other wages paid as compensation for the regular hours of work.
When are employees paid their vacation pay?
Employers decide when vacation pay is to be paid. However, it must be paid no later than the last day of work before the vacation and within 10 months of earning it.
Can employers put vacation pay on every cheque?
Employers may put vacation pay on every cheque. Employees are still entitled to take time off as vacation, but because it has already been paid, they do not receive any additional vacation pay while they are off.
When do employees start earning vacation time and pay?
All employees start earning vacation time and pay from their first day of work for an employer.
When can employees take their vacation?
Employees are eligible for vacation once they have completed one year of work and must take their vacation within 10 months of it being earned. Employees and their employers can agree on when vacation will be taken.
What if a general holiday falls during employees’ vacations?
General holidays are not counted as a vacation day. If a general holiday falls during an employee’s vacation, the employee receives another day of vacation and general holiday wages for the day of the general holiday. See the General Holiday page for more information.
How do unpaid leaves affect vacations and vacation pay?
During a legislated or approved leave, employment is considered continuous. The time employees are away on leave counts toward their years of service when determining how much vacation they are entitled to. Employees who return from leave are entitled to their full vacation time because they are still employed while on the leave.
Vacation pay for employees who have taken a leave remains the same as for other employees, 4% of gross wages for 2 weeks vacation and 6% for those who have earned 3 weeks vacation. If they were not earning wages while on the leave, the amount earned as vacation pay will be lower than it would have been otherwise.
What if employment ends before employees take their vacation?
When employment ends, employees must be paid within 10 working days from the last day worked, all of the vacation pay that has been earned. Since vacation pay is earned from the first day of work, employees who have not yet completed one year of service are paid the portion they earned from the day they started with the employer.
Can vacation be used as notice of termination?
Employers cannot use vacation for the notice period when terminating employment.
When employees are terminating employment, they may use vacation for the notice period if the employer agrees. Employees are entitled to all outstanding vacation pay when their employment ends. See the Termination of Employment fact sheet for more information.
How are years of service determined for seasonal employees?
The employment of employees who work in a seasonal industry is deemed to be continuous if they return to work with the same employer each season. Each consecutive season they return adds one more year of service. Employees are entitled to 3 weeks vacation and vacation wages at 6% of their total gross earnings after 5 years of service (seasons) with the same employer.
Can employers establish a common anniversary date for earning vacation, for all employees?
Employers can choose to have a common anniversary date so all employees receive their new vacation entitlements at the same time. Because all employees earn vacation pay from their first day of work, new employees will receive the portion they earned from the day they started and the common anniversary date. For example: if an employer establishes July 1 as the common anniversary and new employees starts work on January 1, new employees will have worked ½ a year on the common anniversary date. These employees must receive ½ of their vacation time and 4% of their earnings up to July 1 as vacation pay.
For more information contact Employment Standards:
Phone: 204-945-3352 or toll free in Canada 1-800-821-4307
This is a general overview and the information used is subject to change. For detailed information, please refer to current legislation including The Employment Standards Code, The Construction Industry Wages Act , The Worker Recruitment and Protection Act, or contact Employment Standards.
Date Published: April 29, 2016