Yes, you can receive vacation pay as cash in BC—but that does not usually allow you to give up your minimum vacation time. Vacation pay and vacation time are separate legal entitlements.
Your vacation pay can be paid before you take vacation or included on your regular paycheques if you and your employer agree in writing. However, most employees covered by BC’s Employment Standards Act must still take their minimum annual vacation time.
The rules are different when your employment ends. If you quit or are fired, your employer must pay any vacation pay you have earned and are still owed.
On This Page:
- 1. Can You Cash Out Vacation Pay?
- 2. Vacation Pay vs. Vacation Time
- 3. Cashing Out While Still Employed
- 4. Vacation Pay on Every Paycheque
- 5. What Happens to Unused Vacation Pay?
- 6. Extra Vacation Above the Legal Minimum
- 7. Vacation Pay When Employment Ends
- 8. Use-It-Or-Lose-It Vacation Policies
- 9. What to Do if Vacation Pay Is Not Paid
- 10. Vacation Pay Cash-Out FAQs
Can You Cash Out Vacation Pay In BC?
You can receive vacation pay as money, but you generally can’t cash out your minimum vacation time instead of taking it.
This distinction is important because employees often use “vacation pay” and “vacation days” to mean the same thing.
- Vacation pay is the money you earn for your vacation.
- Vacation time is the time you are entitled to take away from work.
Your employer can pay vacation pay directly to you. However, paying out the money does not automatically remove your separate right to take your minimum annual vacation.
What Is The Difference Between Vacation Pay And Vacation Time?
BC employment law treats vacation pay and vacation time as two related but separate rights.
Vacation Pay
Vacation pay is money calculated as a percentage of your eligible wages.
- Before completing five years: At least 4% of total wages
- After completing five consecutive years: At least 6% of total wages
Vacation Time
Vacation time is your annual period away from work.
- After 12 consecutive months: At least 2 weeks
- After five consecutive years: At least 3 weeks
An employee can therefore receive vacation pay on every paycheque and still be entitled to take annual vacation time.
Can I Cash Out Vacation Pay While Still Employed?
You can receive vacation pay while you are still employed. However, BC law does not give every employee a general right to demand an immediate payout of their vacation pay whenever they choose.
Vacation pay is generally paid in one of two ways:
- At least seven days before your annual vacation begins; or
- on your scheduled paydays, if you and your employer agree to this in writing.
Your employment contract or workplace policy may also explain how vacation pay is tracked and paid.
Can I Ask My Employer To Pay Out My Vacation Balance?
You can ask. Whether your employer agrees to a separate cash-out while you remain employed can depend on your workplace arrangements and how your vacation pay is normally administered.
The key point is that paying you the money does not generally allow either you or your employer to waive the minimum annual vacation time required by law.
Can I Take The Money And Keep Working Instead?
Not as a replacement for your minimum statutory vacation.
Your employer must ensure you take the minimum vacation time you earn within the period required by BC employment standards.
Can Vacation Pay Be Paid On Every Paycheque In BC?
Yes. Vacation pay can be included on your scheduled paydays if you and your employer agree to this in writing.
Your pay statement should clearly identify the vacation pay being paid.
Do I Still Get Vacation Days If I Receive 4% On Every Paycheque?
Yes. Receiving 4% vacation pay on every paycheque does not remove your right to annual vacation time.
For example:
- Maya receives 4% vacation pay on each paycheque.
- After completing 12 consecutive months of employment, she is also entitled to at least two weeks of annual vacation.
- When she takes those two weeks off, she may not receive an additional vacation-pay payment because the money has already been paid throughout the year.
She still gets the time off.
What Happens To Unused Vacation Pay In BC?
Vacation pay you have legally earned does not simply disappear because you did not take your vacation or because the calendar year ended.
Your employer is responsible for:
- providing your minimum vacation time;
- paying your minimum vacation pay;
- keeping proper records; and
- paying outstanding vacation pay when employment ends.
Can My Employer Keep Unused Vacation Pay?
No. An employer can’t simply keep minimum vacation pay you have earned.
This is different from whether unused vacation time can be carried forward indefinitely. Minimum vacation is supposed to be taken within the required period rather than banked forever.
Can I Cash Out Extra Vacation Above The Legal Minimum?
The answer can depend on your employment contract and workplace policy.
Many employers provide more vacation than BC employment standards require. For example, an employee may receive four weeks of vacation even though their statutory minimum is only two weeks.
Rules for vacation above the minimum can deal with:
- cashing out extra vacation;
- carrying days into another year;
- maximum vacation balances; and
- what happens when extra days are not used.
The employer has more flexibility with vacation benefits that exceed minimum employment standards. However, it must still respect any enforceable rights created by your contract or workplace policy.
Example: Statutory Vacation vs. Extra Vacation
Daniel has worked for his employer for three years and receives four weeks of vacation.
His minimum statutory entitlement is two weeks. The other two weeks are an additional contractual benefit.
The employer can’t simply take away Daniel’s minimum two weeks. However, the rules for cashing out, carrying over or forfeiting the additional two weeks may depend on his employment agreement and workplace policy.
Do I Get Unused Vacation Pay When I Quit Or Am Fired?
Yes. When your employment ends, your employer must pay vacation pay you have earned and are still owed.
The deadline depends on who ended the employment relationship:
- If your employer fires or terminates you: Outstanding wages, including vacation pay, must generally be paid within 48 hours.
- If you quit: Outstanding wages, including vacation pay, must generally be paid within six days.
Do I Get Vacation Pay If I Am Fired For Cause?
Yes. An allegation of just cause does not allow your employer to keep vacation pay you already earned.
Do I Get Vacation Pay If I Resign?
Yes. Quitting does not erase vacation pay you earned before your employment ended.
Is Vacation Pay The Same As Severance?
No. Outstanding vacation pay and severance are separate entitlements.
If you are fired without cause, your employer may owe:
- outstanding wages;
- unpaid vacation pay;
- other compensation already earned; and
- a full severance package.
For a non-unionized employee, a full severance package in BC can be worth as much as 24 months’ pay in some cases.
Are Use-It-Or-Lose-It Vacation Policies Legal In BC?
An employer can’t use a “use-it-or-lose-it” policy to avoid the minimum vacation requirements in BC employment law.
Your minimum statutory vacation time is intended to be taken within the required period. Your employer should schedule it rather than simply allow the minimum entitlement to disappear.
Your employer also can’t erase minimum vacation pay you have already earned.
What About Vacation Above The Legal Minimum?
Different rules may apply to extra vacation provided by your employment contract or workplace policy.
For example, an employer may have a policy limiting how many extra days can be carried into another year. Whether unused additional vacation must be paid out can depend on the wording of the contract and policy.
What Should I Do If My Employer Will Not Pay My Vacation Pay?
If you believe vacation pay is missing, start by gathering:
- your employment contract;
- the company vacation policy;
- recent pay statements;
- vacation balance records;
- records of vacation you took; and
- emails or messages about your vacation pay.
Ask your employer to explain in writing:
- how much vacation pay you earned;
- how much has already been paid;
- how the remaining balance was calculated; and
- why any amount was removed or withheld.
Depending on the dispute, you may have options through the BC Employment Standards Branch or another legal process.
If the vacation pay dispute is connected to a termination, severance offer or other major workplace issue, get legal advice before signing anything.
Vacation Pay Cash-Out FAQs
Can I cash out my vacation pay in BC?
You can receive vacation pay as money, including on your regular paycheques if you and your employer agree in writing. However, receiving the money does not generally allow you to give up your minimum annual vacation time.
Can I get paid instead of taking vacation in BC?
Not for your minimum statutory vacation. You generally can’t replace the minimum two or three weeks of annual vacation with extra cash and continue working instead.
Can I ask for my vacation pay to be paid out early?
You can ask your employer, but BC law does not give every employee a general right to demand an immediate cash-out whenever they choose. Vacation pay must be paid according to employment standards requirements and any applicable written agreement.
Can my employer pay me 4% vacation pay on every paycheque?
Yes, if you and your employer agree to this in writing. You still have a separate right to take your minimum annual vacation time.
Do I lose my vacation days if I receive vacation pay on every cheque?
No. Paying vacation pay on every cheque changes when you receive the money. It does not eliminate your right to minimum annual vacation time.
Can my employer cash out my vacation without my permission?
Your employer must follow the rules for paying vacation pay and can’t use a payout to eliminate your minimum annual vacation time. Vacation pay can be included on scheduled paydays when this has been agreed to in writing.
Can unused vacation pay expire in BC?
Minimum vacation pay you have earned can’t simply be erased because the year ended or you did not take vacation. This is different from rules governing the scheduling or carryover of vacation time.
Can I carry unused vacation pay into the next year?
How a vacation-pay balance is tracked can depend on when your employer pays vacation pay. However, earned minimum vacation pay can’t simply disappear. Minimum vacation time is supposed to be taken within the period required by law.
Can I cash out extra vacation days above the legal minimum?
Possibly. Rules for vacation above the minimum required by law can depend on your employment contract and workplace policy.
Do I get unused vacation pay if I quit?
Yes. Your employer must pay vacation pay you earned and are still owed. Outstanding wages are generally due within six days when an employee quits.
Do I get unused vacation pay if I am fired?
Yes. Your employer must pay vacation pay you earned and are still owed. Outstanding wages are generally due within 48 hours when the employer ends the employment relationship.
Can my employer keep my vacation pay if I am fired for cause?
No. Even if your employer alleges just cause, it can’t keep vacation pay you already earned.
Is unused vacation pay part of my severance package?
Outstanding vacation pay and severance are separate entitlements. Receiving your earned vacation pay does not necessarily mean your employer has provided the full severance you are owed.
When Should You Get Legal Advice About Unpaid Vacation Pay?
A small payroll question may not require an employment lawyer. However, legal advice can become important when unpaid vacation pay is connected to a larger workplace problem.
This can include situations where:
- you were fired and your final pay appears to be missing vacation pay;
- your employer claims you forfeited a significant vacation balance;
- your employer is using a vacation payout to reduce your severance;
- your vacation rights were substantially changed without your agreement; or
- you are being asked to sign a release or severance offer.
If you are a non-unionized employee in British Columbia and your vacation pay issue is part of a termination or serious workplace dispute, the employment lawyers in BC at Samfiru Tumarkin LLP can explain your rights and options.
Contact us before you sign away compensation you may be owed.