Vacation Benefits

Vacation Benefits

Vacation Benefits: What Every Ontario Worker Should KnowCo-Authors: Maria Esmatyar and Bram Lecker

Vacation Benefits – What Every Ontario Employee Should Know.

Who doesn’t love a vacation? Time off from your job to spend at leisure with friends and family! As an Ontario worker, your vacation benefits are governed by the Employment Standards Act, 2000 (ESA). Collectively, these benefits include vacation time, vacation pay and statutory holiday pay.

What is Vacation Time?

After one full year of employment, you may take a minimum of two weeks’ vacation time within the following 10 months. Employees with 5+ years of service receive three weeks, minimum.

This is unpaid time off unless you have negotiated otherwise. Your employer has the right to choose when you take this vacation and they can also insist that you take it in one-week increments. The ESA is very clear about one matter, however. It puts the onus on your employer to ensure you take this time off. If you do not, your employer will be in violation of the law.

Vacation Benefits - Time clock on a beach

What is Vacation Pay?

In addition to unpaid vacation time, all employees receive a minimum vacation pay of 4% of your base wage. This is true for seasonal, part time and temporary workers. Employees with 5+ years of service fare even better. They receive 6% vacation pay.

Your pay slip should have this amount indicated on a separate line. This amount is paid as a lump sum before you start your vacation, unless:

  • Your vacations are taken in periods of less than one week;
  • You agree in writing that your employer pay it on each pay stub;
  • You agree with your employer in writing to have it paid on a specific date;
  • Your vacation falls on or before the regular pay day;

What is Statutory Holiday Pay?

Permanent employees receive statutory or public holidays as paid time off. Your employer cannot deduct wages for public holidays. You should notice this as a separate line on your pay slip. If a public holiday falls during your vacation period, you may take an extra day off in lieu within 3-12 months of the stat holiday date. If you worked on a statutory holiday, then your employer must either give you a lieu day off or pay you 1-1/2 times your daily salary or hourly wage.

Are Vacation Benefits Negotiable?

Of course they are! The benefits described above are the minimum you are entitled to by law. In fact, some employers offers superior vacation benefits to attract the best candidates. If you are in a position to negotiate your compensation package with a potential employer, then here are bargaining points you may wish to consider:

  • Ask  your employer for paid vacation time. For most of us, this would add an extra two weeks of pay, annually!
  • Request more than the statutory minimum 2 week vacation time and have this increased with your length of service.
  • Negotiate higher than the 4% statutory vacation pay

Can I Give Up Vacation Pay for Time Off?

You cannot give up your vacation pay in lieu of extra days off. However, you may give up some or all of your vacation time in order to earn additional income. The Director of Employment Standards and your employer must receive this agreement in writing from you and it requires annual renewal.

Do I Lose Them If I Do Not Use Them?

Employers cannot adopt a “use it or lose it” policy for the minimum two weeks of vacation time. However, they can apply it to any vacation time you negotiated above the minimum.

What Happens to Vacation Benefits If I Take a Leave of Absence?

Recovering from an illness, going on maternity leave or taking care of a terminally ill family member are all examples of life circumstances that might force some of us to take a leave of absence from work. You remain continuously employed as long as your employer approves the leave. Accordingly, you should also receive the full vacation benefits. If your leave of absence is unpaid, however, so is your vacation pay. The calculation is a percentage of earnings.

Vacation BenefitsMy Employer Fired Me! What Happens To My Vacation Benefits?

Even with a job layoff, you are still entitled to any unused vacation days as well as accrued vacation pay up to your last day of work. Your employer has to include all these entitlements in your last pay cheque. Vacation pay will be added to your notice pay but not to any lump sum severance packages.

The law concerning vacation entitlements is very comprehensive and applies to almost anyone with a full-time, part-time, seasonal or fixed-term contract job. If you are a student or temporary worker and unsure about the vacation entitlements you are receiving, contact our team of Toronto employment lawyers.

Vacation Benefits – What Every Ontario Worker Should Know
Co-Authors: Maria Esmatyar and Bram Lecker
Cover Photo: Hero Images/Getty Images


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