Vacation entitlement is twofold: vacation time and vacation pay. At minimum, employees are entitled to two weeks of vacation time after each entitlement year and, regarding vacation pay, are entitled to at least four per cent of their gross wages earned in the vacation entitlement year. While an employee who does not complete the full entitlement year does not qualify for vacation time under the Employment Standards Act, 2000 (the “Act”), an employee begins to accrue vacation pay as soon as wages are earned; no minimum amount of work is required to trigger that entitlement.
Employees are also entitled to public holiday pay if they work their last and first regularly scheduled days prior to and following the public holiday. Public holiday pay is calculated as follows: the regular wages earned by the employee in the four work weeks prior to the work week during which the public holiday falls (the “Four Weeks”) are added to the vacation pay payable in the Four Weeks, and the sum is divided by 20. It should be noted, however, that scheduling vacation immediately before or after the public holiday does not disentitle an employee to that pay; such scheduling merely alters the employee’s last and first regularly scheduled work days. For example, if an employee who works a regular work week has the days between Christmas and the New Year off for vacation, that employee remains entitled to public holiday pay for Christmas Day, Boxing Day and New Year’s Day, assuming that the employee works on both December 23rd and January 2nd (or whatever his or her regularly scheduled work days may be).The amount of vacation pay to include in the calculation of public holiday pay depends on both the timing of the employee’s vacation and the manner in which vacation pay is to be paid. Vacation pay will be included in the calculation of public holiday pay in the following circumstances: (1) if vacation pay is payable immediately prior to or during the vacation and the employee was on vacation during the Four Weeks; (2) if vacation pay is payable with every paycheque; and/or (3) if vacation pay is payable in a lump sum on certain dates and the date for paying the lump sum pay falls within the Four Weeks.The calculation of vacation time, vacation pay and public holiday pay, as well as the consideration of the relationship between those calculations, can be a significant undertaking, particularly when the impact of other influential factors is considered. These factors include the fact that some jobs are exempt from certain of the Act’s provisions, the fact that the timing of the vacation entitlement year may result in additional vacation time owing to employees and the fact that contracts of employment may provide for greater vacation entitlements than provided for under the Act. Legal advice should be sought for cases in which employers or employees are unsure about their obligations or entitlements, in order to avoid non-compliance with the Act or with contractual obligations.