vacation pay, vacation pay during covid, employment lawyers, employment law

Vacation Entitlements During COVID-19

Most federal and provincial employees have vacation entitlements. Details are found in the Canada Labour Code and the Employment Standards Act (“ESA”), respectively. Vacation entitlements during COVID-19 may differ from previous years in several ways.

Before getting into the impact of COVID-19 on vacation entitlements, it is important to clarify some commonly used terms.

Vacation Time vs. Vacation Pay

Under the ESA, vacation time and vacation pay are two different concepts, but both are impacted by an employee’s years of service.

Vacation time is earned after each year of employment. An employee who has worked for an employer for at least 1 year but less than 5 years is entitled to 2 weeks of vacation time per year. An employee who has worked for an employer for 5 or more years is entitled to 3 weeks of vacation time per year. Many employers allow for a greater vacation time for long-serving employees through an employment agreement or a collective agreement.

Normally, this entitlement is based on a 12-month period known as a “vacation entitlement year”. However, an employer can establish an “alternative vacation entitlement year” that starts on a date different than the employee’s hire date. Where this is done, the employee is entitled to a pro-rated amount of their vacation for the “stub period”, or the time period before start of the alternative vacation entitlement year.

Vacation pay is gained as soon as an employee begins earning pay. It is calculated as a percentage of an employee’s pay. So, an employee who has worked for up to 5 years are entitled to at least 4% of their pay paid as vacation pay. An employee who has worked for 5 or more years is entitled to at least 6% of their pay paid as vacation pay.

Vacation pay is payable on all different types of wages.  It does not matter whether the employee is salaried, paid hourly, of if s/he is only paid commissions. Courts have clarified that vacation pay must be added to overtime, commissions, bonuses, and termination pay.

Remember that some jobs are exempt from the vacation with pay provisions of the ESA.

Vacation and Considerations During a Pandemic

An employer has the power to deny an employee’s vacation request where its timing is not suitable. Employers can and should address their unique business concerns in a clear Vacation Policy. For example, many small employers must consider which team members can cover for one another as part of managing vacation schedules. Certain businesses have a peak season where they may require all hands-on-deck. As such, an employer may want to ask employees to submit vacation request well in advance to assist in managing schedules and increase predictability for the employee.

Even during the COVID-19 pandemic, an employer maintains its right to deny a vacation request. However, there are additional considerations for employees who do take a vacation during the pandemic and travel outside of the country.

How do self-isolation measures impact vacation entitlements during COVID-19? Provincial self-isolation rules will impact an employee’s ability to return to the workplace beyond their scheduled vacation time. Consider an employee who takes a 1-week vacation and travels overseas. When she returns to Canada, based on current Public Health guidance, she must quarantine for at least 14 days. If she is not working from home, then she will not be able to return to the workplace for a total of 3 weeks, even though she only meant to use 1 week of her vacation time.

In this situation, an employer may be in contravention of their obligation to maintain a safe work environment by allowing the employee to return to work in person after only one week. This creates a difficult situation for all involved as the employer may have only arranged for the employee to be gone one week. The parties may want to discuss the employee using paid vacation or sick days to be paid for the additional time away from work or consider a temporary work from home arrangement.

Travel concerns can be partially addressed by including business-related travel restrictions in a Vacation Policy, within reason. However, employers generally cannot impose travel restrictions on employees for personal travel.

A flexible Vacation Policy can address many of these concerns and provide guidance in these uncertain times.

Contact Us 

If you an employer and have questions pertaining to your vacation policy, or an employee and have questions about your vacation entitlements, our team of workplace lawyers is ready to help. Contact us by phone toll-free at +1 (800) 771-7882 or email us at [email protected] and we would be happy to assist.