Vacation pay in Alberta: Employee rights

What is vacation pay in Alberta?

Vacation pay is money that non-unionized employees in Alberta receive for the time they are away from work on vacation. This pay starts accumulating as soon as an employee begins working and ensures that employees maintain financial stability while taking time off work.

Vacation pay is covered by Alberta.’s Employment Standards Code (ESC).

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Difference between vacation pay and vacation time

Vacation pay and vacation time are related but distinct concepts in Alberta:

• Vacation Pay: Vacation pay is the amount of money employees receive while they are on vacation, and it’s a percentage of the wages earned by the employee during the “vacation entitlement year.”
• Vacation Time: Employees earn vacation time with each hour worked. It is the time that employees are entitled to take off from work, and it accumulates over time based on the length of their employment and the hours they’ve worked.

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How is vacation pay calculated in Alberta?

in Alberta, vacation pay is calculated as a percentage of the employee’s total wages earned during the vacation entitlement year.

Total wages used for calculating Alberta vacation pay includes:

• Regular wages (salary and commission)
• Bonuses (that meet the defintion of wages)
• Some other earnings

The definition of wages doesn’t include overtime pay, general holiday pay, termination pay, unearned bonus, tips and gratuities, or expenses and allowances, unless the employee and employer agree otherwise.

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How much is vacation pay in Alberta?

In Alberta, vacation pay is:

Example: Tom’s Vacation Pay in Alberta

Tom starts working for the company on January 1, 2014.

• Years 1 to 4: From January 1, 2014, to December 31, 2017, Tom earns 4% of his gross wages as vacation pay.
• At 5 years: Starting January 1, 2018, Tom earns 6% of gross wages as vacation pay each year.

This ensures Tom receives appropriate vacation pay based on his length of employment in Alberta.

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Is it mandatory to pay vacation pay in Alberta?

Yes, it is mandatory for employers to provide vacation pay in Alberta. All employees, full-time, part-time, or casual, are entitled to vacation pay as per the guidelines set by the ESC.

Temporary and staffing placement employees are also covered by the ESC’s vacation rules. They are entitled to a minimum of 4% or 6% (depending on the length of employment) of the wages earned as vacation pay, even if the employment relationship is short-term.

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When will my vacation pay be paid out?

Vacation pay can be paid out in various ways in Alberta, such as:

• Paid in a lump sum before the employee takes vacation time.
• Paid on each paycheque as a separate item.
• Paid on the regularly scheduled payday during or immediately following the vacation.

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Vacation pay and termination in Alberta

When you are fired or lose your job in Alberta, your employer must give you the vacation pay you have earned but not yet been paid out. This pay should be provided within seven days of termination or on what would have been your next payday.

However, that’s not all you may be owed. If you are fired “without cause” in Alberta (for reasons other than serious misconduct), you are eligible for a full severance package. Severance in Alberta can be as much as 24 months’ pay, and is calculated based on factors such as your age, position and length of employment. A wrongful dismissal occurs when your employer fails to offer you the proper amount of severance pay, which is a common issue in Alberta.

Termination “for cause” means that you were dismissed due to serious misconduct or insubordination, and in such cases, your employer is not legally required to provide you with a severance package. However, it’s important to note that this type of termination is often misapplied by employers, meaning you may still be owed significant compensation.

Lost your job?

When you are fired, laid off or let go from your job, it is crucial to consult an experienced employment lawyer at Samfiru Tumarkin LLP before accepting any severance offer. signing your termination papers prematurely may cause you to forfeit essential rights, including proper severance pay and vacation pay.

Employers often impose deadlines to pressure employees into accepting insufficient severance packages. However, your legal right to a complete severance package isn’t bound by these arbitrary deadlines. You have up to two years from the termination date to claim your full severance.

At Samfiru Tumarkin LLP, our skilled team of employment lawyers consistently deliver proven results for countless clients across Alberta. We work diligently to protect your rights and provide necessary guidance through employment-related issues.

If you are a non-unionized employee in Alberta (or B.C. and Ontario) facing job loss or workplace challenges, contact us or call 1-855-821-5900 to get the advice you need, and the compensation you deserve.