Vacation policies in Canada are not as straightforward as you may think. Each province has different rules and regulations regarding how much vacation time and pay each employee is permitted to take and when they can take it. With dozens of regulations, it’s only fair that companies find themselves a little confused, especially companies that are based in the United States.
To prepare for upcoming vacation requests, brush up on vacation policies in Canada. Keep reading to see some of the more common vacation policy questions and their simplified answers.
How Much Vacation Time Are Employees Entitled To?
Starting with the basics—every employee in Canada is entitled to vacation time after working for a company for 12 consecutive months. After one year, employers must grant employees two weeks’ vacation, apart from Saskatchewan, which offers three weeks, and Quebec, which offers one day per month.
This, however, is the minimum amount as described in the employment standards legislation of each province. Companies can offer employees more if they wish.
There are exceptions for students in work-experience programs, federal employees, and some other employees.
Can You Relinquish Vacation Time?
Employers have the right to schedule vacation time according to an employee’s entitlement year or stub period. This ensures all employees are given the appropriate amount of vacation time.
However, employees can give up vacation time with the employer’s agreement and the Director of Employment Standards written approval. It’s important to note that while employees can give up vacation time, employers are still obligated to pay the employee vacation pay.
How Much Vacation Pay Are Employees Entitled To?
When it comes to vacation policies in Canada, employees are to be given at least four percent of the gross wages earned in the 12-month vacation entitlement year.
For example, if you earned gross wages of $16,000, you are entitled to $640 as your vacation pay. However, some companies offer competitive vacation benefits at a higher percentage than the minimum four percent.
What Happens to Vacation Pay after Employment Ends?
If an employee quits or is terminated, they are still entitled to be paid vacation pay. The employee must be paid any vacation pay that has not yet been paid out, including pay from the previous vacation entitlement year. This unpaid vacation pay must be paid to the employee within seven days of the employment ending or on the employee’s final pay stub—whichever is later.
Outsourcing payroll and HR services is a great way to ensure your vacation pay is tracked, reducing the amount of risk your company faces regarding vacation policies in Canada.
Why Should Employees Use Their Vacation Time?
Recent studies suggest that more than 41 million vacation days are left unused by Canadians each year. Fiscally, that adds up to approximately $6.3 billion in unused paid time off. In the US, the number jumps to a whopping $52.4 billion. Many employees don’t understand the benefits of taking time off, leaving it up to employers to ensure their employees understand what it means for them and why it’s important.
A study suggests that employees who leave 11 to 15 PTO days unused are 6.5 percent less likely to receive a raise or bonus than those who used their time off. On the other hand, taking even two days off can leave the mind and body refreshed, creating a more positive mindset and increasing productivity.
For both employers and staff, vacation days are important. Keeping track of vacation policies in Canada can make a huge difference in the well-being of your employees and the quality of work they bring to the office every day.