The Labour Standards Code says that employers must give employees both vacation time and vacation pay.
Employers must give employees vacation time of two weeks after each period of 12 months of work, and must give the vacation time within 10 months following the 12-month earning period. Once an employee has completed 8 years of service, the employee must receive three weeks’ vacation time.
Employers decide when employees will take their vacation time. Employers must tell employees when their vacation will begin at least one week before it begins. Many employers let their employees choose when to take vacation time; however, the employer has the final say. Employees who work full time must take vacation time.
Employees who work less than 90 per cent of the regular working hours during the 12 months when they earned vacation can give up vacation time and just collect their vacation pay (see below for information on vacation pay). When an employee tells an employer in writing that the employee will give up vacation time, the employer must pay the employee vacation pay no later than one month after the date the 12 month earning period ends.
If the employer and employee agree, the vacation time may be broken into two or more vacation periods, if the employee receives a full two weeks’ vacation (or three weeks after 8 years), and the employee receives at least one unbroken week of vacation.
An employee earns vacation pay during the first 12 months of work for an employer and every 12 months after that. Employee status does not affect vacation pay (full-time, part-time, seasonal, etc.). Employers must pay employees vacation pay of at least 4 percent of gross wages. Vacation pay increases to 6 percent of gross wages at the start of an employee’s 8th year of service (the earning period for 3 weeks’ vacation time).
An employer can pay vacation by:
The employer must make it clear to each employee how they are being paid their vacation pay. The employer can do this, for example, by showing accumulated vacation pay on every pay stub, showing on the paystub that vacation pay is paid out with each pay, by having employees sign a clear statement acknowledging they are aware that vacation pay is included in their hourly rate of pay, or by stating on each paystub that vacation pay is included in the hourly rate of pay.
Employees do not earn wages when they take their vacation time. Vacation pay is intended to be the employee’s pay during their vacation time, even if the employee receives vacation pay on each pay.
If an employee’s job ends and the employee has accumulated vacation pay, the employer must pay the accumulated vacation pay within 10 days after the employment ends.
If there is a dispute and the employer cannot show vacation pay was paid, the employer will normally have to pay the vacation pay (see also information section on Records).
The rules on vacation time and vacation pay do not apply to the following employees:
Yes. However, where an employer wishes to pay on this basis, it must be clearly communicated to the employee and records need to be retained to substantiate this. The vacation pay should also be identified on the pay stub.
No, vacation pay and vacation leave entitlement apply to full time, part time, casual and seasonal workers.
Seasonal workers, if they return regularly every year and are never gone for more than 12 months, qualify for three weeks vacation after 8 years and vacation pay at 6% of their gross earnings during the year they earned their vacation.
If the benefits in place are more favorable than what the Code provides, the employee will be entitled to those benefits.
*Wages includes salaries, commissions, and most other forms of compensation except vacation pay.
If you have any questions, please contact Labour Standards.