Vacation Pay

Vacation pay and the right to take a vacation

Section 33 of the Employment Standards Act states that employers in Ontario must give employees vacation of at least two weeks “after each vacation entitlement year that he or she completes.” This means that after an employee has worked for twelve months he or she is entitled to take two weeks off and receive vacation pay.

Employees are entitled to a minimum of two weeks off and the employer cannot prevent them from taking the time off. According to Section 35.2 of the Employment Standards Act, vacation pay must be at least four percent of the wages paid to the employee during the period for which vacation is given. This means that the employee may be entitled to receive at least four percent of their average salary for the previous twelve months.

The above entitlements are employment standards and are considered minimums. There is nothing preventing an employee from negotiating more than two weeks of vacation or higher than four percent vacation pay. According to section 5(2) of the Employment Standards Act if a contractual right is greater than the corresponding Employment Standards Act minimum, then the contractual right prevails and the minimum does not apply.

The opposite however is not true. Section 5 of the Employment Standards Act which states that employees cannot contract out of or waive an employment standard. This means that employees receiving less than two weeks off or less than four percent vacation may be victims of an Employment Standards Act violation. This is very important because there are many instances when employers may attempt to chip away at the amount of vacation pay the employee is supposed to receive.

It is also important to note that according to Section 36 of the Employment Standards Act vacation pay must be paid in lump sum before vacation is taken.

Termination of employment and vacation pay

When an employee is dismissed without cause the employee may be entitled to reasonable notice or pay in lieu of notice. When calculating the notice period an employee is entitled to, it is important not to forget that vacation pay may also be considered in the calculation. For example, if a person is entitled to receive 14 months of notice, he or she may be entitled to increase that amount by the percentage of vacation pay the employee was receiving. It is very important to speak with a wrongful dismissal lawyer for advice about your termination of employment.

The information on this website is for informative purposes only. It is not legal advice. A lawyer can only be retained after a consultation. If you need a wrongful dismissal lawyer or if you have any other employment law issues, call me at: 416 323 3614