Many companies experience times of year when business tends to be slower, and as a result some employers may wonder whether they can force employees to take their vacations at those times rather than risk being short-staffed during their busier periods. Additionally, some businesses have still not returned to their pre-pandemic operations and those employers may also see some benefit to requiring employees to take their vacations at specific times.
So, if you are wondering whether it’s ok to force your employees to take their vacation time in Ontario, the answer is yes.
The stipulation, however, is that you must do so within the guidelines of the Employment Standards Act, 2000 (ESA).
How much vacation time are employees entitled to?
In Ontario, employees who have been working for an employer for more than 12 consecutive months are entitled to 2 weeks of vacation. After the employee’s fifth vacation entitlement year, they are entitled to 3 weeks of vacation per year. Note, that this is the minimum entitlement set out in the ESA and employees may be entitled to more time depending on their employment contracts.
Vacation pay
Employers must pay at least the minimum rate of vacation pay as set out by the ESA. For employees with less than five years’ experience, this rate is 4% of their wages, while employees with five years’ experience or more, the rate is 6% of their wages. Keep in mind that “wages” includes their regular pay as well as any commissions, overtime pay, bonuses, allowances, etc.
In many cases, vacation pay must be paid out in a lump sum before the employee takes their vacation. Exceptions occur when:
- The vacation time is less than one week.
- The employee has signed an agreement that the vacation pay will be added to each pay cheque.
- The employee has signed an agreement for alternative timing of their vacation pay.
- The employee is paid by direct deposit.
Employers must schedule vacation time in one-week blocks
If as an employer, if you do choose to force your employees to take their vacation time, that time must be scheduled in one-week blocks. In other words, you cannot force them to take a day here or a day there. If the employee still has multiple weeks left that they are entitled to, you may however schedule them to take multiple one-week blocks of vacation back-to-back.
The exception request to this is if the employee makes a request in writing to take shorter periods of vacation – however you are not required to agree to such a request.
Vacation timing
Employers may select the timing of statutory vacation with a few restrictions:
- It must be scheduled within 10 months of the entitlement year.
- It must not be scheduled during a time of written notice of termination (the exception is if the employee has agreed to take their vacation during this time).
- Employees who are on vacation are still entitled to be paid for statutory holidays.
- Employees who are on a leave of absence are still entitled to accumulate vacation.
- Employees may be entitled to more than the minimum set out in the ESA depending on the terms of their employment contract or if they are unionized.
Contact Minken Employment Lawyers today
Do you have questions about vacation entitlement in Ontario? If so, contact Minken Employment Lawyers today to speak to a member of our team: 905-477-7011 | Toll-Free: 1-866-477-7011 | contact@minken.com
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Please note that this article is for informational purposes only and does not constitute legal advice.
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