All employees in Ontario are entitled to vacation pay they can use to help them avoid an interruption in pay when they take that much-needed time off to clear their minds and recharge their bodies.
In this post, you’ll learn about some of the general requirements regarding vacation pay for Ontario workers who don’t work in a federally-regulated industry like transportation or banking and who are not part of a union. When it comes to your employment rights and entitlements, however, always speak to a Toronto employment lawyer regarding major workplace issues and decisions to keep yourself protected.
Keep in mind that an employer may offer more than these legal minimums, so review your employment contract to know your exact entitlements.
How Does Vacation Pay Work in Ontario?
There are two parts to vacation entitlements in Ontario – vacation time and vacation pay. You must work with an employer for at least a year before you are entitled to any vacation days. Vacation pay, however, starts to accrue as soon as you begin working. If you leave your job before you’ve been there for a year, your employer must pay out the vacation pay earned up until your last day.
How Much Vacation Am I Entitled To?
Under the Employment Standards Act, employees who have between 1 and 5 years of service are provided with a minimum of 2 weeks of vacation in a 12-month period and 4% of their total gross income from the previous 12-month period as vacation pay.
If you’ve been with your employer for 5 years or more, you are legally entitled to a minimum of 3 weeks of vacation in a 12-month period and 6% of your total gross income for vacation pay.
The increases that come after 5 years of service only apply to time worked after December 31, 2017, as this was when the law was amended to include these increased entitlements.
When Do I Get Vacation Pay?
Unless there is an agreement in writing to provide vacation pay at another time, an employer is required to pay out the vacation pay an employee earned in the previous 12-month period in one lump sum before the employee takes their vacation.
Many employers, however, provide vacation pay in other ways, including:
- Adding vacation pay earned in a pay period on every paycheque.
- Allowing employees to “bank” vacation pay and not take it when going on vacation.
- Providing vacation pay based on the current full year to employees when they use vacation days.
An employee will also get any unused vacation pay they have earned if they quit or are terminated. However, if the employment contract ends and an employee has received more vacation pay than they earned at the time of termination, they may have it deducted from their last paycheque.
Can I Carry Over My Vacation Days?
Unless your employment contract provides for an extension, you must use the vacation time earned in a 12-month period no later than 10 months after it ended. If not, you risk the right to take that time off.