Vacations and Vacation Pay

This information sheet tells about the Labour Standards Code rules on vacations and vacation pay.

The Labour Standards Code says that employers must give every employee:

a vacation of two weeks after 12 months of work and within the following 10 months or, if the employee has been employed with the same employer longer than 8 years, a vacation of at least three weeks
vacation pay of at least 4 per cent of gross wages (6 per cent for employees after 8 years), which the employer must pay at least one day before the vacation begins

An employer must tell the employee of her vacation at least one week before it begins.

Workers Not Covered

The following workers are not covered by the Labour Standards Code rules on vacations and vacation pay:

real estate and car salespeople
certain commissioned salespeople who work outside the employer's place of business, but not anyone with an established route
anyone who works on fishing boats
people employed in a private home by the householder to provide domestic service for a member of the employee's immediate family or for 24 hours or less per week.

When an Employee Earns Vacation Pay

An employee earns vacation pay and vacation during the first 12 months of work for an employer and every 12 months after that.

Vacation May Be Broken

If the employer and employee agree, the vacation and vacation pay may be broken into two or more vacation periods if the following are true:

the employee will have two weeks' vacation, or three weeks after 8 years.
the employee receives at least one week of unbroken vacation

Does an Employee Have to Take Vacation Time?

Employees who work full time must take vacation time.

Employees who work less than 90 per cent of the regular working hours during the 12 months when they earned vacation can give up vacation time and just collect their vacation pay.

When an employee tells an employer in writing that she will not take vacation time, the employer must pay vacation pay no later than one month after the date the 12–month period ends.

Vacation Pay Included in the Hourly Rate

An employer can include vacation pay in an employee's hourly rate, which would be paid in every pay cheque.

In that case, the employer will need to:

have proof that the employee knows that vacation pay will be paid on every pay cheque
show on payroll records that vacation pay has been paid to the employee
show on the employee's pay stub that vacation pay is included in the pay cheque
ensure that the employee's rate of pay is at least minimum wage plus 4 per cent, (6 per cent for employees after 8 years), if the Minimum Wage Order applies to the employee.

Keeping Records

Employers must keep accurate payroll records, including information on vacations taken and vacation pay paid. If a Labour Standards officer audits and finds no record of vacation pay, the Director of Labour Standards might find that the employer still owes the employee vacation pay. See Employment Records for more information on records.

Vacation Pay When Employment Ends

When employment ends, the employee is entitled to receive all accumulated vacation pay that has been earned. The employer must pay it within 10 business days after the employment relationship ends.

Vacation FAQ