Vacation & Vacation Pay
Employees are entitled to both vacation pay, and vacation time (actual time away from work). These are two separate entitlements.
After completing one year of employment, employees must be given at least two weeks’ vacation each year, until they have completed their fifth consecutive year of employment.
After completing five consecutive years of employment, employees must be given at least three weeks’ vacation each year.
Vacation must be taken. Neither an employer nor an employee is permitted to waive the statutory entitlement to annual vacation.
Failure to grant an employee his or her annual vacation is a violation of the ESA, even if the employee has received vacation pay.
Employers are not required to give vacation time off during an employee’s first year of employment.
The ESA requires employment contracts to provide at least the minimum vacation time and vacation pay entitlements that are set out in the ESA (ss 57-60).
If agreed to in an employment contract, employees can be entitled to vacation time and vacation pay entitlements that exceed the minimum levels set out in the ESA.
After five calendar days of employment, the employer must pay the employee 4% of his or her wages as vacation pay. After five years of employment, this increases to 6%.
The wages used for calculating vacation pay includes all money paid by an employer to an employee which meets the definition of “wages” under the ESA. This includes overtime, statutory holiday pay, bonuses which meet the definition of “wages” and previously paid vacation pay. Total wages also includes compensation for length of service under s.63 and termination pay under s.64.
Employers must effectively bank an employee’s vacation pay. The employee is paid his or her banked vacation pay seven days before his or her annual vacation. If the employee has provided written consent, the employer may instead pay the employee his or her vacation pay on each paycheck.
If the employee is dismissed from his or her employment, the employer must pay out any vacation pay owing to the employee.
Sometimes, years of vacation pay may be owing to an employee. These amounts may to an extent still be owing and collectable, and may not be limited by the usual six month limitation under the ESA for wage claims.
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