For the majority of employees, vacation time, vacation pay and public holidays will be set out in the terms of their employment contract. But such terms must be consistent with statutory minimum requirements set out under the Employment Standards Act, 2000 (ESA), in Ontario.
Here are 10 things to keep in mind:
- Not all employees are entitled to vacation time. Student employees in work experience programs, police officers, elected officials, and those in religious or judicial offices are not entitled to vacation under the ESA.
- Employees who are covered by the ESA are eligible for a minimum of two weeks vacation for every 12 months of employment. These twelve months are known as a vacation entitlement year. Ordinarily, employees become entitled to two weeks vacation exactly one year from their first day of employment. Alternatively, employers can establish another date at which the vacation entitlement year starts. In such cases, employees are entitled to a pro-rated number of vacation days from their twelfth month of employment to whenever the contract stipulates the vacation entitlement year starts. For example, the employee may be hired in March 2014, but the employment contract sets September 1, 2014 as the date from which the vacation entitlement year begins. The employee then becomes entitled to their vacation days on September 1, 2015. The employee is entitled to two weeks vacation as well as an additional week prorated for the six months they had worked before their vacation entitlement year began.
- The right to vacation time is earned even where an employee spends time away from work because of a temporary layoff, sickness, injury, or leave.
- Vacation pay must be at least four percent of the gross wages earned during the corresponding vacation entitlement year. If an employee has not earned any wages in the prior entitlement, they could be entitled to time with no vacation pay. Vacation pay can be paid on every paycheque, on a regular pay period covering a vacation period or prior to the taking of vacation in a lump sum.
- Employers have the right to schedule vacation time provided that the vacation is not scheduled for more than 10 months from the end of the corresponding vacation entitlement year.
- A public holiday does not count as part of the vacation period. If a public holiday falls within a vacation period, the employee is entitled to a substitute day-off within three months of the holiday unless it is otherwise agreed in writing.
- Certain types of employees are not entitled to take public holidays off. Employees at hotels, motels, tourist resorts, restaurants, taverns, hospitals, nursing homes and "continuous operations" which close down less than once a week are not entitled to take public holidays off. These employees are still entitled to a substitute day off or a premium for their holiday hours; the choice of which is the employer's.
- Employees are entitled to take public holidays off work regardless of the length of their employment. An employee can agree in writing to work on a public holiday if they are paid public holiday pay in addition to a premium for the hours worked on the holiday, or a substitute day off is taken.
- Employees must be paid for public holidays. Public holiday pay is calculated by adding all wages and vacation pay earned in the four weeks immediately prior to the week containing the public holiday and dividing that sum by 20. The premium for working on the public holiday is a payment of at least 150% of the employee's regular rate of pay ('time and a half').
- An employee can lose his/her entitlement to public holidays. This can happen if the employee fails to work all of his/her regular shift immediately before or after the holiday without reasonable cause. The employee also loses his/her right to public holidays if he/she fails, without reasonable cause, to work on the public holiday when they agree or were required to.
Also, a bonus point – the foregoing may not apply if it can be shown that a contract of employment or collective agreement provides a greater benefit than the ESA.
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