Employees in Ontario may be entitled to statutory pay in specific situations, ensuring they receive fair compensation for public holidays, vacation, and overtime. Understanding these rights is essential for preventing disputes with employers and ensuring compliance with Ontario’s Employment Standards Act, 2000 (ESA).

This article outlines key aspects of statutory pay, including eligibility, entitlements, and legal options for employees facing pay disputes.

What Is Statutory Pay?

Statutory pay refers to legally mandated payments that employees may receive under specific conditions, including:

• Public Holiday Pay  – Compensation for designated statutory holidays.
• Vacation Pay  – A percentage of earned wages provided as vacation entitlement.
• Overtime Pay  – Additional wages for hours worked beyond the standard weekly limit.

Ontario’s employment laws outline when employees qualify for statutory pay and how employers must calculate these payments.

Who Qualifies for Statutory Pay?

Eligibility for statutory pay depends on an employee’s work arrangement and the type of statutory entitlement:

• Public Holiday Pay – Most employees qualify if they work their last scheduled shift before and after the holiday. However, some workers, such as independent contractors and exempt roles under the ESA, may not be eligible.
• Vacation Pay – All employees, including full-time, part-time, and certain contract workers, are entitled to vacation pay, earned based on their length of employment.
• Overtime Pay – Employees exceeding 44 hours per week may be entitled to overtime pay unless they fall under exemptions outlined in the ESA, such as managerial roles or certain professionals.

Public Holiday Pay in Ontario

Ontario recognizes nine statutory holidays, where eligible employees may receive a paid day off.

Key Considerations for Public Holiday Pay

• Employees who do not work on the holiday may be entitled to a paid day off, calculated based on their average earnings over the past four weeks.
• Employees who work on the holiday may receive either premium pay (1.5 times their regular wage) or a substitute day off with pay, subject to their employment agreement.
• Certain industries, such as hospitality and healthcare, may have exemptions allowing for alternative holiday pay structures under the ESA.

Vacation Pay Entitlements

Ontario law requires employers to provide vacation pay based on an employee’s length of service:

• Less than five years: Minimum 4% of gross earnings (equivalent to two weeks of vacation).
• Five or more years: Minimum 6% of gross earnings (equivalent to three weeks of vacation).

How Vacation Pay Is Provided

• Included in each regular paycheck (common for part-time or contract employees).
• Paid out when an employee takes vacation time.
• Given as a lump sum at the end of employment.

Employers must clearly outline vacation pay policies in employment contracts to comply with Ontario law.

Overtime Pay Requirements

Employees may qualify for overtime pay when they work beyond 44 hours in a workweek. Overtime is generally paid at a rate of 1.5 times the employee’s regular wage.

Key Considerations for Overtime Pay

• Exempt Employees – Some professionals, managers, and IT specialists may be exempt under the ESA.
• Averaging Agreements – Employers and employees may enter agreements to average hours over multiple weeks, potentially affecting overtime eligibility.
• Unauthorized Overtime – Employees must be paid for all overtime worked, even if the employer did not formally approve it unless an averaging agreement applies.

Common Issues with Statutory Pay

Employees may face challenges in receiving statutory pay due to employer errors or disputes. Common issues include:

• Unpaid or incorrectly calculated statutory pay – Errors in holiday, vacation, or overtime pay calculations.
• Employee misclassification – Employers may misclassify workers as independent contractors to avoid statutory pay obligations.
• Denied vacation pay – Employers fail to provide or restrict access to required vacation pay.

Employees facing statutory pay issues may have legal options to recover unpaid wages.

Filing a Statutory Pay Claim

Employees who have not received proper statutory pay may file a complaint with the Ministry of Labour, Immigration, Training and Skills Development.

The Claims Process

1. Gathering Evidence – Employees should collect pay stubs, contracts, and work records.
2. Submitting a Complaint – A claim can be filed online or at a Ministry office.
3. Employer Response – Employers must respond to the claim.
4. Investigation and Resolution – If non-compliance is found, the Ministry may order the employer to pay owed wages.

If the employer disputes the claim, further legal action may be necessary.

How Achkar Law Can Help

Employees experiencing issues with statutory pay may benefit from legal guidance to protect their rights. Achkar Law’s employment lawyers assist employees with:

• Reviewing employment contracts to clarify statutory pay entitlements.
• Filing claims and complaints with the appropriate authorities.
• Negotiating disputes with employers regarding unpaid wages.
• Ensuring compliance with Ontario’s employment laws.

Contact Achkar Law

Need legal advice regarding statutory pay? Achkar Law’s employment lawyers can help. Contact us today to discuss your rights and next steps.

 Call: 1-800-771-7882
Email:  [email protected]