Do I have to give my employees vacation with pay

Q:        Do I have to give my employees vacation with pay?

A:         The Employment Standards Act provides that an employer must give an employee two weeks' paid vacation after 12 months of service. The vacation pay must be at least 4% of the total wages for the year for which the vacation is given.   An employee who is terminated before completing one year of service must receive vacation pay of 4% of all wages received.  Total wages includes all wages and bonuses based on performance, but does not include things like: tips, travel or car allowances, non-performance bonuses, and previously paid vacation pay.

It is not acceptable to pay an employee 4% vacation pay on each cheque and not give vacation with pay unless your company has obtained prior approval from the Director of Employment Standards.  The purpose of the Act is to ensure that most employees get vacation each year with pay.

It is the employer's right to determine when vacation is taken. This can be in one two?week period or two one?week periods. Many employers give the employees flexibility in when they take their holidays. This is by no means mandatory. The two?week vacation period must be given within 10 months after the employee has earned it. For example, if you begin working for an employer, the employer must give you your two weeks vacation no later than 22 months after you started working.

Vacation pay benefits are payable to full?time, part?time and student employees.  There are certain employees who do not qualify for vacation pay benefits. Some examples include police officers, doctors, lawyers and real estate salespeople, to name a few.

Failure to give vacation pay according to the Act could result in a costly and inconvenient Employment Standards claim against you by former or current employees.