Happy (Statutory) Holidays: 10 Rules Employers Need To Know

With the holiday season approaching, Ontario employers should be mindful of their public holiday obligations under the Employment Standards Act, 2000 (the "ESA"). To assist, we have compiled a list of ten key public holiday requirements.

1. There are nine public holidays in Ontario: New Year's Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day, and Boxing Day. The entitlements described below exist in respect of only these holidays.
2. An employee must meet certain criteria to qualify for public holiday entitlements. Generally, employees qualify for public holiday entitlements unless they fail to work all of their last regularly scheduled day of work before the public holiday or all of their first regularly scheduled day of work after the public holiday (this is called the "Last and First Rule"). If an employee agrees or is required to work on a public holiday and fails to work their entire shift, they will also not be entitled to public holiday entitlements.
3. Entitlement to public holiday pay does not necessarily depend on how many days or hours an employee regularly works. Qualified employees can be full time, part time, permanent or on a fixed term contract. It does not matter how recently they were hired, or how many days they worked before the public holiday, provided they are otherwise entitled.
4. Most employees in Ontario are entitled to receive the day off work on a public holiday and be paid public holiday pay. If a public holiday falls on a day that would ordinarily be a working day for the employee and the employee is not on vacation that day, an employer must give the employee the day off work and pay the employee public holiday pay for that day.
5. Employees may agree to work on a public holiday. It is not uncommon for employees who work in retail, hospitality, or who provide essential services, to work on a statutory holiday. If an employee works on a statutory holiday, they are entitled to public holiday pay, plus premium pay in the amount of at least one and a half times their regular rate for all hours worked on the public holiday. Alternatively, the employee can be paid their normal wages for all hours worked on that public holiday and receive a substitute holiday with public holiday pay.
6. Employees employed in a hospital, a continuous operation, or a hotel, motel, tourist resort, restaurant or tavern have different entitlements.  An employer may require an employee working in these industries to work on a public holiday provided it is ordinarily a working day for the employee and is not a day on which the employee is on vacation. If an employer requires the employee to work on a public holiday, it must pay the employee their regular wages for all hours worked on the public holiday and substitute another day to take off work, for which the employee will receive public holiday pay.
7. An employee who is on vacation during a public holiday still has public holiday entitlements.  If a public holiday falls during an employee's vacation period, the day remains a vacation day for the employee. However, if the employee qualifies for the public holiday, he or she is entitled to a substitute day off work with public holiday pay or if the employee agrees electronically or in writing, the employer can pay public holiday pay for that day without giving the employee a substitute day off work. An employee can also agree electronically or in writing to work on a public holiday that falls during their vacation period.
8. Public holiday pay must be calculated in accordance with the formula provided in the ESA.  The amount of public holiday pay to which an employee is entitled is set out in the ESA as follows: all of the regular wages earned by the employee in the four work weeks before the work week with the public holiday plus all of the vacation pay payable to the employee with respect to the four work weeks before the work week with the public holiday, divided by 20.
9. Vacation pay may be included in the calculation of public holiday pay.  Whether and in what amount vacation pay is included in the calculation of public holiday pay will depend on how the employer pays vacation pay. If the employee was on vacation during the relevant four work week period and the employer pays vacation pay prior to the start of an employee's vacation, or on or before the pay day for the period in which the vacation falls, vacation pay will be included in the calculation. If the employee was not on vacation during the relevant four week period, no vacation pay will be included in the calculation. If vacation pay is paid on every pay cheque, at least 4% of all wages earned during the four week period will be included in the calculation. If vacation pay is paid as a lump sum on a particular date, it will only be included in the calculation if that particular date falls during the four week period.
10. The ESA  only sets out minimum entitlements; an employee may have greater benefits under their employment contract or in a collective agreement.  If an employer has agreed to provide greater benefits to employees in respect of public holidays than these minimum statutory requirements, the employer should ensure that it complies with the applicable policy or agreement. A unionized employer must ensure their public holiday practices comply with any applicable collective agreements.

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