Ontario’s Employment Standards Act, 2000 (ESA) provides minimum standards for vacation pay entitlements for all employees in Ontario, including part-time employees. This means that part-time employees are entitled to receive vacation pay just like their full-time counterparts.
What is vacation pay
Vacation pay is a percentage of an employee’s wages paid by an employer as compensation for the employee’s time off work. This amount is calculated based on the employee’s earnings and length of service. The minimum vacation pay entitlement under the ESA is 4% of an employee’s gross wages earned during a year of employment or 2 weeks’ pay after completing 12 months of service.
Who qualifies for vacation pay
All employees who work in Ontario are entitled to receive vacation pay regardless of their employment status (full-time, part-time, casual, or seasonal). The only exception to this rule is independent contractors or self-employed individuals who provide services to a company on a contractual basis.
When do employees become eligible for vacation pay
In Ontario, employees become eligible for vacation pay after completing 12 consecutive months of employment with the same employer. This period is called the “vacation entitlement year.” After completing this period, an employee must receive at least 4% of their gross wages as vacation pay or two weeks’ paid leave.
How is vacation pay calculated
The calculation of vacation pay is based on the employee’s earnings during their “vacation entitlement year.” A “vacation entitlement year” starts on the date that an employee begins working with an employer and ends either 12 months later or on a date chosen by the employer. For example:
- If an employee starts working for a company on January 1, 2022, their vacation entitlement year will end on December 31, 2022.
- If an employer chooses a different date for the end of the vacation entitlement year, such as March 31, then the employee’s vacation entitlement year will end on March 31, 2023.
Once the vacation entitlement year is determined, an employer must calculate the amount of vacation pay that an employee is entitled to receive. This amount is calculated by multiplying the employee’s gross wages earned during the vacation entitlement year by the minimum vacation pay rate of 4% or two weeks’ pay (whichever is greater).
Can employees take time off instead of receiving vacation pay
Yes, employees have the option to take time off work instead of receiving vacation pay. The minimum standard for paid time off under ESA is two weeks per year. However, an employer may provide more paid time off than this minimum requirement if they choose to do so.
Can employers require employees to take their vacations at specific times
Yes, employers can require employees to take their vacations at specific times if they provide reasonable notice and ensure that employees receive their minimum entitlements. For example:
- An employer can require all employees to take one week off in July when business slows down.
- An employer can require an employee who has accumulated three weeks of vacation time to take two weeks off in September and one week off in December.
To sum it up
All employees in Ontario are entitled to receive a minimum standard for vacation pay regardless of their employment status. Part-time employees are not excluded from this benefit.
Employers must calculate and provide at least 4% of an employee’s gross wages or two weeks’ pay as vacation pay after the completion of 12 consecutive months of service. Employees can choose to take time off work instead of receiving vacation pay, and employers may require employees to take their vacations at specific times if they provide reasonable notice and ensure that employees receive their minimum entitlements.