While the Court could not establish with certainty that the employer had a use or lose policy, it nevertheless confirmed that «the ESA establishes mandatory minimum leave entitlements that cannot legally be subject to a use or loss policy.» Therefore, employers who intend to implement a «take it or lose» policy should do so with caution and take steps to ensure that it meets the minimum requirements of the ESAs. In most Canadian provinces and territories, public holiday pay is payable on all regular wages, including salary, commission and non-discretionary performance bonuses. The number of days off you are legally entitled to in Canada is 10. 1. Russell v. The brick warehouse (2021 ONSC 4822[1]) is a helpful reminder for employees to continue to accumulate and pay vacation pay during the applicable legal notice period. This means that employers must unilaterally schedule vacation for most employees to ensure that the minimum vacation time is taken – even if the employee doesn`t want to use the vacation time. In Ontario, the minimum leaves to which employees are entitled are set out in the Employment Standards Act, 2000 («ESA»). The ESA requires all provincially regulated employees to receive statutory holiday pay and vacation. Although these concepts are related, they should not be mixed; Each offers a separate authorization. A clearly worded holiday policy is only half the battle. In addition, it is important to ensure that leave entitlements (and public holidays taken) are consistently and accurately tracked.
This is both a legal obligation (according to § 15.1 ESA) and necessary to establish a transparent and justifiable holiday tracking system. An employer`s failure to prove that paid leave has been properly accumulated, tracked and paid may give rise to legal and/or contractual liability. Understanding the legal requirements regarding vacation laws in Canada is very important, but it can sometimes get a bit confusing. I hope our article has helped you clarify things a bit and better understand the vacation laws in Canada. That puts Canada second to last out of 62 countries, according to another Mercer study last year. The last place is held by the United States, which has no required vacation time. Employers can use their employment contracts (or written policies) as an opportunity to address the following aspects of employee leave rights and requirements: If you are an employer or employee and have questions about your leave rights and obligations, please contact one of our employment lawyers in Ottawa for more information. Nevertheless, employers continue to use employment contract templates that categorically limit employees to two weeks` vacation. These contracts are not only misleading, they may be unenforceable.
Currently, vacation is a flexible entitlement across Canada (with the exception of Yukon) that increases with seniority. In most provinces, leave is increased from two to three weeks with about five years of service. Employees subject to federal legislation are entitled to four weeks of leave after 10 years of service. The employee was allowed to claim damages many years ago, in part because the employer had not kept records of public holiday pay as required by Ontario`s Employment Standards Act. As a result, the potential entitlement to vacation pay could only be «discovered» by the employee when he or she received his or her very first vacation pay – several years after he or she should have been born. Some jurisdictions have laws that deal specifically with vacation and vacation pay. This covers the minimum period of leave that an employee earns and to which he or she is entitled. For example, most provinces require a minimum entitlement of 2 weeks of vacation for new employees. Saskatchewan in the only exception that sets a minimum of 3 weeks. Some provinces will increase the minimum leave to which they are entitled after so many years of service. It is not uncommon for jurisdictions to indicate that the employee earns the leave in the first year of employment and is entitled to take the leave the following year. Entitlement to leave may be granted on the basis of calendar year or year of employment, as defined in company policy.
In the event that the employee does not take time off, he or she is still entitled to vacation pay. In most cases, a vacation payment instead of time is not allowed or strongly discouraged. The percentage of paid leave depends on the company`s vacation policy. 2 weeks of vacation equals 4%, 3 weeks of vacation equals 6%, 4 weeks of vacation equals 8%, and so on. Commissions are an area of great confusion. Commissions are generally considered salaries and, as such, are subject to calculations in «vacation» dollars. However, three jurisdictions, Alberta, Ontario and Nova Scotia, divide commissions between those earned on the employer`s premises and those earned outside the employer`s premises, and each is treated differently for calculation purposes. At the end of the employment relationship, the leave remains due to the employee. An exception located in British Columbia, an employee who is terminated within 5 days of hiring is not eligible for vacation pay. Each province determines which income is «vacation eligible,» that is, what income should be taken into account in calculating statutory holiday pay. There are several earnings other than regular wages that are subject to the calculation of vacation dollars. Commissions are a common point.
In all jurisdictions and in almost all circumstances, commissions paid are holidayable. Less common are employer-controlled tips, which are considered vacation income only in the province of Quebec. The calculation of vacation pay on termination can be managed effectively by ensuring that your vacation records are up to date, that all vacation income is included, and/or that you have a good accrual accounting system. Note that if a company`s policies meet or exceed employment standards, the employee is entitled to the highest benefit. For employees, we always recommend recording holidays when they are taken and having them paid for as such via payroll. Our software solution can manage an hourly accumulation to manage vacation time, as well as a dollar provision, so you can always track vacation liability when it arises. If vacation is taken or paid, the provision is reduced. With each pay slip, you will know exactly what your responsibility is. Legally, employees have little or no say in when they can take time off. The only condition is that employment standards require that the employer`s vacation period be a minimum of duration (usually one week) so that the employer cannot «spread» individual vacation days throughout the year to meet demand. Employees with less than five years of employment with a particular employer are entitled to two (2) weeks of leave after each year of 12-month leave. Employees with five or more years of service are entitled to three (3) weeks of leave after each year of 12-month leave.
Normally, a year of leave is a recurring period of 12 months beginning on the date of recruitment. 2. Goruk v. The Greater Barrie Chamber of Commerce (2021 ONSC 5005) cautions that employers should exercise caution when adopting and implementing «use it or lose» leave policies or risk being deemed illegal and unenforceable. When a dispute arises about vacations, the answer is almost never clear and the responsibilities can sometimes be serious. Minor missteps accumulate over time and become great potential sources of liability in the future. However, the same rules do not apply to the whole country. Each jurisdiction has its own holiday legislation.
These are typically the rights behind acquiring vacation, the minimum number of vacation days you can take, the employer`s rights to plan and expire vacation, the obligation to pay vacation upon termination of employment, and more, depending on the jurisdiction. Many employers have a «take it or lose» policy that requires employees to lose unused vacation after a certain amount of time. Employees and employers should review policies and agreements on carry-over caps and other restrictions before assuming that vacation will be transferred. Ontario`s Employment Standards Act, 2000 («ESA») provides a minimum entitlement to 2 weeks of vacation for all employees who receive 4% of gross wages. Employers and employees can agree on more, but not less. Some workers are exempt from the ESA, such as some qualified or registered practitioners (e.g. architects, lawyers, accountants, dentists, massage therapists, pharmacists and others). Do you think you understand the details of holiday laws? The Employment Standards Act requires employees to use their vacation within 10 months of the year in which it was earned. This means that an employee who started working on January 1, 2021 earns 2 weeks of vacation, which must be used until October 31, 2022. This article will help you understand the basics of vacation and vacation pay in Ontario and answer the question of what happens if I don`t use my vacation. Clear written address of employees` vacation rights and obligations. Through this step, either in a written employment contract or in a written policy (which is brought to the employee`s attention), employers can set parameters for taking time off and minimize the risk of conflicts on the road.
Editor`s note: «Legal steps & Missteps: Addressing common workplace concerns» is a weekly series of Talent Canada in collaboration with John Hyde of Hyde HR Law in Toronto.