The Interesting Rules of Canada’s Vacation Pay 2023

by | Mar 1, 2023

Vacation pay for employees in Canada is different than in other countries. The rules around vacation entitlement and amount vary from province to province.

Many employees must learn their fundamental rights to take their earned vacation leave. So, Yogi & Associates are here to ensure you know these rights and what you must do to get them.

1. What is Vacation Pay?

Vacation pay is one of the most controversial elements of Canadian workplace law. While some employers offer their employees generous paid time off, others set their vacation pay policies so low that employees might be unable to take any time off. This can create a real problem for employees looking for vacation time.

2. How does Canada’s Vacation Pay Work?

According to the Employment Standards Act:

    1. You get two weeks’ vacation pay at 4% of your annual earnings if you work for over a year.
    2. You get three weeks’ vacation pay at 6% of your yearly earnings if you work for over five years.
    3. If you work for more than ten years, you get four weeks’ vacation pay at 8% of your yearly income.

    3. Rules of Taking Vacations:

    Several laws in place dictate when employees can take a vacation. Canadian vacation rules set the least amount of vacation time for employees.

    There is a specific type of vacation pay for employees with some rules and eligibility:

    Personal Reasons:

    You can get five days of personal time once a year, from which the employer should pay you for three days. But the eligibility for this leave requires you to work for three consecutive weeks.

    Family Violence Victim:

    In this situation, you can get ten leaves once a year. In this situation, the employer should pay you for five days. Yet, you can only get the leaves after working three consecutive weeks.

    Court Leave:

    Employers must give leave to the employee if they appear in court for any reason. Yet, paid leave is not compulsory in this situation.

    Maternity Leave:

    You can get up to 17 weeks of maternity leave. You can also get up to 63 weeks of unpaid prenatal leave, but that varies on the province. If you cannot work because of pregnancy, you can exit from the start of pregnancy until 24 weeks after birth. This facility is available with unpaid leave.

    Medical Leave:

    You can take up to 17 weeks of leave if you are ill. It’s unnecessary to work three consecutive works before leaving in this situation.

    Paid Leave:

    Employees get paid holidays when there is a public holiday.

    Note:

    According to the Employment Standards Act, employees must use their vacation days within ten months of earning them. This means that an employee who began working on January 1, 2021, is entitled to two weeks of vacation, which must be taken by October 31, 2022.

     

    4. How to Calculate Vacation Pay?

    You can calculate vacation pay using the following formula:

    Vacation Pay = Vacation Time × Number of Eligible Wages x 4%

    For example:

    Suppose you have worked for 12 months and have an annual salary of $40,000. You can multiply your pay by 4% (or two weeks x 4%) by the number of your yearly earnings.

    The Bottom Line!

    Vacation is a human right. Every employee has the right to take time off work to rest, relax and recharge. Yet, your leave entitlement under the Employment Standards Act depends on how many hours you work per week.

    The bottom line is that every worker in Ontario is entitled to three weeks of paid vacation each year. Yogi & Associates will explain how this works when you contact us. Learning more about your rights could improve your employment situation later on—there’s always room for self-improvement!

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