School is out for summer, and many employees are no doubt looking forward to spending some time away from work with their families. So, now is a good time to clarify some of the rules surrounding Ontario employees’ entitlements to vacation time and vacation pay.
While Bill 47 reversed many of the changes to the Employment Standards Act, 2000 (“ESA”) which were implemented by the previous provincial government, Bill 148’s rules around vacation pay remain in effect.
Under the ESA most employees are entitled to vacation time and/or pay, subject to ESA exemptions or special rules for specific industries and jobs. Employees who have been with their employer for five years or less are entitled to two weeks of vacation after each twelve-month vacation entitlement year. As of January 1, 2018, employees who have been with their employer for five years or more are entitled to three weeks’ vacation. Generally, a vacation entitlement year is a recurring twelve-month period beginning on the date of hire. Where the employer has established an alternative vacation entitlement year that begins on a date other than the date of hire, however, the employee is also entitled to a pro-rated amount of vacation time for the “stub period” that precedes the alternative vacation entitlement year.
The vacation time earned for a vacation entitlement year or a stub period must be taken within ten months after completing that year or stub period. The employer has the right to schedule vacation as well as an obligation to ensure the vacation time is scheduled and taken before the end of that period.
Vacation pay must be at least four per cent of the gross wages earned in the twelve-month vacation entitlement year or stub period for employees with less than five years of employment. Employees with five or more years of employment at the end of a twelve-month vacation entitlement year or stub period are entitled to at least six per cent of the gross wages earned in the twelve-month vacation entitlement year or stub period.
These are minimum entitlements. An employee’s contract of employment may provide a greater right or benefit with respect to vacation time and/or pay.
An employee who does not complete either the full vacation entitlement year or the stub period does not qualify for vacation time under the ESA. However, employees earn vacation pay as they earn wages. This means that if an employee works even just one hour, he is still entitled to at least four per cent (or six per cent, depending on length of employment) of that hour’s wages as vacation pay.
As mentioned above, some industries and jobs are exempt from the vacation provisions of the ESA and are subject to special rules. For a list of these job categories or additional information about your rights or responsibilities, we encourage you to consult the Ministry of Labour website or contact us.
Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues. Whether you are an employer or an employee, we can help. Contact us to see how.
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