What you Should Know about Employee Vacations

by Samfiru Tumarkin

Monday, June 9th, 2014 at 6:28 pm

Summer is finally upon us and the beautiful weather beckons. If you are like most, summer weekends are never enough time to engage in some much needed rest and relaxation. In fact, summer is the time when winter weary employees most request vacation. Before you submit your request for time-off, consider these vacation facts from an employment law perspective.

Ontario’s Employment Standards Act (the “ESA”) sets the minimum amount of vacation that must be provided to an employee whose employment is regulated provincially and who is not exempt from the ESA (which is most employees in Ontario). Under the ESA, vacation has two parts: vacation time and vacation pay.

Vacation Time

Employees are entitled to at least 2 weeks of vacation time each 12-month vacation entitlement year. A vacation entitlement year is a recurring 12-month period beginning on the employee’s date of hire. Even though your employer may manage vacation based on a calendar year, your full vacation entitlement will always be based on your date of hire.

Vacation Pay

Vacation pay must be at least 4% of an employee’s wages before deductions and must be itemized on the employee’s pay stub. Employers normally ‘bank’ the vacation pay, to pay it out when the employee takes his/her vacation time. In some cases (and with the employee’s agreement) the employer can pay vacation pay directly to an employee and on the employee’s pay cheque. In these situations, when the employee takes vacation-time off from work, the time-off will be unpaid.

Many employers have policies stating that vacation time “accrues.” What this means is for every month you work, you accrue (or earn) time for vacation. If your company policy is that employees can take 2 weeks (10 days) of vacation per year, you would be accruing the time at a rate of .833 days per month (10 days ÷ 12 months) and earning vacation pay at a rate of 4% (2 weeks ÷ 52 weeks).

It is important that you use your employee vacation time, as vacations serve to reduce stress, give us more energy and make us productive when we return to work. That said, sometimes taking time away from work is not always possible. Under the ESA, an employee can give up some or all of his/her earned vacation time with the employer’s written approval. However, this approval does not extend to an employer’s obligation to pay vacation pay. An employee may give up vacation time, but cannot give up his/her right to vacation pay: an employer is required pay an employee’s vacation pay entitlement.

Though you are entitled to vacation, you are not entitled to dictate when you would like to take time off from work. Your employer is legally able to tell you when you can and cannot take time off. In some workplaces, the employer designates certain times when the workplace is closed (so employees must take vacation time or unpaid days off during these dates) or restricts employees from taking vacation during peak operations.

To ensure that you can take vacation when you want and avoid disappoint, you should provide your employer with a written request for vacation as far in advance as practically possible. With advance notice, your employer can make alternate arrangements to ensure that there is sufficient coverage while you are away.

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